KfW IPEX-Bank

The KfW IPEX-Bank GmbH is a wholly owned subsidiary of KfW (Kreditanstalt für Wiederaufbau; engl. credit institute for reconstruction)[3] and since 1 January 2008 acts as a legally independent bank governed by the German Banking Act. Its work focuses on international project and export financing.[4] The banks headquarter is located in Frankfurt, where the KfW IPEX-Bank uses the Westarkade, which was completed in 2011.[5]

KfW IPEX-Bank GmbH
TypeLimited liability company
Founded2008
HeadquartersFrankfurt, Germany[1]
Total assets€27.3 billion (2018)[2]
Number of employees
697 (2018)[2]
ParentKfW
Websitewww.kfw-ipex-bank.de

History

The KfW, founded in 1948,[1] used the instruments of export and project financing (E&P) within its business model quite early on. In 1950 the KfW was given this task.[6] This branch of their business became increasingly important in the 1980s and 1990s and, not least because of this, attracted the attention of the competition authorities of the European Union, who regarded the Bank's activities as a German development bank in the area of E&P as non-competitive. This is mainly because this business activity did not take place under market conditions within the protected area of a development bank secured by the German state and thus created an inadmissible competitive advantage.

The outsourcing of the KfW's international project and export financing goes back to an agreement between Germany and the European Commission on the orientation of legally independent development institutions in Germany.

Under the terms of the agreement, the KfW may use the refinancing benefits in the form of federal guarantees only for its original promotional activities as defined in a list of tasks. All other activities were, according to the agreement, spun off until the beginning of 2008 into a privately organized credit institution, which operates under the competitive conditions of the market. On August 15, 2003, the Deutscher Bundestag implemented this agreement in the Förderbankenneustrukturierungsgesetz (Development Bank Restructuring Act).[7]

As of January 1, 2004, the brand KfW IPEX-Bank (IPEX stands for International Project and Exportfinanzing) was constituted within the framework of a four-year transitional phase (the so-called bank-in-the-bank phase).[8] On 1 January 2008, it was spun off in the legal form of a Limited liability company as a company and is subject to full tax liability and in particular the banking supervision, which does not apply to the parent company, the KfW.[3][9]

In 2014, KfW successfully lobbied for the KfW IPEX-Bank to remain under national supervision on the grounds that its parent group is in the ownership of the German government; the bank had origionally been on a list of 24 German lenders that were among 128 banks across the eurozone deemed significant enough to be supervised directly by the European Central Bank.[10][11]

Operations

Strategic focus and financing products

The KfW IPEX-Bank is a specialist bank for export and project financing. The tasks of the KfW IPEX-Bank consist of financing in the interest of the German and European economy and are derived from the statutory mandate of the KfW. The focus is on the provision of medium and long-term earmarked financing to support the export economy, the development of economic and social infrastructure, and environmental and climate protection projects.[4]

The KfW IPEX-Bank is active in the business sectors Basic Industry, Manufacturing, Telecommunications, Trade & Health, Energy & Environment, Shipping & Ports, Aviation & Airports, Rail & Road, Construction & PPP. Their financing offers range from traditional export-related export credits and trade financing to complex project and structured financing in various currencies, including the integration of export credit insurance.

Company data

(€ 3.4 billion) of new committed loans were allocated to Germany, 38% (€ 5.5 billion) to the rest of Europe and 38% (€ 5.5 billion) to countries outside Europe. In 2016, the bank employed a total of 666 employees on average.[12]

International network

The KfW IPEX-Bank currently has foreign representative offices in Abu Dhabi, Singapore, Mumbai, Johannesburg, São Paulo, Istanbul, Mexico City, Moscow and New York City, as well as a branch in London.[13]

Controversy

Amid the Wirecard scandal, the KfW IPEX-Bank confirmed that it had lent around 100 million euros ($112.17 million) to payments company Wirecard; the funds were fully drawn down but were not hedged by the bank.[14]

References
  1. "Company Overview of KfW". Bloomberg. Retrieved 17 April 2019.
  2. "Lagebericht und Jahresabschluss 2018" (PDF). kfw-ipex-bank.de. 31 December 2018. Retrieved 27 June 2019.
  3. "Konzernverbund der KfW IPEX-Bank". KfW IPEX-Bank. Retrieved 17 April 2019.
  4. "Internationale Projekt und Baufinanzierung". KfW IPEX-Bank. Retrieved 17 April 2019.
  5. "KfW Westarkade, Frankfurt". Council on Tall Buildings and Urban Habitat. Retrieved 17 April 2019.
  6. "KfW Bankengruppe". Bundeszentrale für politische Bildung. Retrieved 17 April 2019.
  7. "Gesetzzur Neustrukturierung der Förderbanken des Bundes(Förderbankenneustrukturierungsgesetz)". Bundesanzeiger. 15 August 2003. Retrieved 17 April 2019.
  8. Panitz, Lina (9 December 2003). "KfW strebt mit Exportkrediten an Weltspitze". Die Welt. Retrieved 17 April 2019.
  9. "Gesetz über die Kreditanstalt für Wiederaufbau". Bundesministerium der Justiz und für Verbraucherschutz. Retrieved 17 April 2019.
  10. Alexander Huebner (February 12, 2014), Germany's KfW wants its export bank removed from ECB oversight Reuters.
  11. Alice Ross (April 20, 2014), KfW presses regulators to take investment arm off ECB list Financial Times.
  12. "Geschäftsbericht 2016" (PDF). KfW IPEX-Bank. Retrieved 17 April 2019.
  13. "Weltweite Standorte der KfW IPEX-Bank". KfW IPEX-Bank. Retrieved 17 April 2019.
  14. Hans Seidenstuecker (June 27, 2020), German development bank could lose 100 million euros from Wirecard insolvency Reuters.

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