# EDGAR Filing Document

**Accession Number:** 0000821533
**File Stem:** 0001193125-26-211208
**Filing Date:** 2026-5
**Character Count:** 1117827
**Document Hash:** c07dbb9749f0452180d7799b62ba2afd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-211208.hdr.sgml**: 20260507

**ACCESSION NUMBER**: 0001193125-26-211208

**CONFORMED SUBMISSION TYPE**: 18-K

**PUBLIC DOCUMENT COUNT**: 27

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260507

**DATE AS OF CHANGE**: 20260507

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** KfW
- **CENTRAL INDEX KEY:** 0000821533
- **STANDARD INDUSTRIAL CLASSIFICATION:** FOREIGN GOVERNMENTS [8888]
- **ORGANIZATION NAME:** International Corp Fin
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 18-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 033-25769-01
- **FILM NUMBER:** 26952084

**BUSINESS ADDRESS:**
- **STREET 1:** PALMENGARTENSTRASSE
- **STREET 2:** 5 - 9
- **CITY:** FRANKFURT AM MAIN
- **STATE:** 2M
- **ZIP:** 60325
- **BUSINESS PHONE:** 496974310

**MAIL ADDRESS:**
- **STREET 1:** PALMENGARTENSTRASSE
- **STREET 2:** 5-9
- **CITY:** FRANKFURT AM MAIN
- **STATE:** 2M
- **ZIP:** 60325

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** KREDITANSTALT FUER WIEDERAUFBAU
- **DATE OF NAME CHANGE:** 19940826

##### [**Table of Contents**](#toc)
**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**FORM 18-K** 

**For Foreign Governments and Political Subdivisions Thereof** 

**ANNUAL REPORT** 

**of** 

**KfW** 

(Name of Registrant)

Date of end of last fiscal year: December 31, 2025

SECURITIES REGISTERED

(As of the close of the fiscal year)\*

---

| | | |
|:---|:---|:---|
| TITLE OF ISSUE | AMOUNT AS TO WHICH<br> REGISTRATION IS<br> EFFECTIVE | NAMES OF EXCHANGES ON<br> WHICH REGISTERED |
| N/A | N/A | N/A |

---

\* The registrant files annual reports on Form 18-K on a voluntary basis.

**Name and address of person authorized to receive notices** 

**and communications from the Securities and Exchange Commission:** 

**SINA R. HEKMAT** 

**Hogan Lovells US LLP** 

**390 Madison Avenue** 

**New York, NY 10017** 

------

##### [**Table of Contents**](#toc)
**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
|  | **Page** | **Page** |
|  [EXPLANATORY NOTE](#tx109115_1) |  | 2 |
|  [FORM 18-K](#tx109115_2) |  | 2 |
|  [EXHIBIT INDEX](#tx109115_3) |  | 8 |
|  [SIGNATURES](#tx109115_4) |  | 9 |

---

------

##### [**Table of Contents**](#toc)
**EXPLANATORY NOTE** 

This annual report on Form 18-K for the fiscal year ended December 31, 2025 is filed by KfW, also known as Kreditanstalt für Wiederaufbau, an institution organized under public law of the Federal Republic of Germany (the "Federal Republic"). This annual report on Form 18-K, as subsequently amended, is intended to be incorporated by reference into the prospectus dated June 14, 2024 of KfW and any future prospectus filed by KfW with the Securities and Exchange Commission to the extent such prospectus indicates that it intends this report to be incorporated by reference.

In this annual report, references to "€," "euro" and "EUR" are to the single European currency of the member states of the European Union participating in the euro, including the Federal Republic. References to "U.S. dollars," "$" or "USD" are to United States dollars.

**FORM 18-K** 

1. In respect of each issue of securities of KfW registered, a brief statement as to:

&nbsp;&nbsp;&nbsp;&nbsp;(a) The general effect of any material modifications, not previously reported, of the rights of the holders of such
securities.

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(b) The title and the material provisions of any law, decree or administrative action, not previously reported, by
reason of which the security is not being serviced in accordance with the terms thereof.

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(c) The circumstances of any other failure, not previously reported, to pay principal, interest or any sinking fund
or amortization installment.

Not applicable.

**KfW** 

2. A statement as of the close of the last fiscal year of KfW giving the total outstanding of:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Internal funded debt of KfW. (Total to be stated in the currency of the registrant. If any internal funded debt
is payable in foreign currency, it should not be included under this paragraph (a), but under paragraph (b) of this item.)

The total principal amount of internal funded debt of KfW, which is defined as euro denominated debt with an initial maturity of more than one year (bonds and other fixed-income securities, other borrowings, and subordinated liabilities), outstanding as of December 31, 2025, was EUR 301.15 billion.

&nbsp;&nbsp;&nbsp;&nbsp;(b) External funded debt of KfW. (Totals to be stated in the respective currencies in which payable. No statement
need be furnished as to intergovernmental debt.)

For the principal amount of external funded debt of KfW, which is defined as non-euro denominated debt with an initial maturity of more than one year (bonds and other fixed-income securities, other borrowings, and subordinated liabilities), see "KfW—Business—Financial Markets—Funding—Financial-Market Funds—Capital-Market Funding—Information on Issuances of Funded Debt of KfW Group (as of December 31, 2025)," p. 37 of Exhibit (d), which is hereby incorporated by reference herein.

3. A statement giving the title, date of issue, date of maturity, interest rate and amount outstanding, together
with the currency or currencies in which payable, of each issue of funded debt of KfW outstanding as of the close of the last fiscal year of KfW.

------

##### [**Table of Contents**](#toc)
See "KfW—Business—Financial Markets—Funding—Financial-Market Funds—Capital-Market Funding—Information on Issuances of Funded Debt of KfW Group (as of December 31, 2025)," p. 37 of Exhibit (d), which is hereby incorporated by reference herein.

4. (a) As to each issue of securities of KfW which is registered, there should be furnished a breakdown of the total amount outstanding, as shown in
Item 3, into the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Total amount held by or for the account of KfW.

As of December 31, 2025, KfW held own debt securities (registered and non-registered) in a principal amount of EUR 4.2 billion. The amount of registered debt securities included in these holdings did not exceed 3% of the total volume of outstanding registered debt securities, and thus, is not substantial.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Total estimated amount held by nationals of the Federal Republic; this estimate need be furnished only if it is
practicable to do so.

Not practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Total amount otherwise outstanding.

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(b) If a substantial amount is set forth in answer to paragraph (a) (1) above, describe briefly the method
employed by KfW to reacquire such securities.

Not applicable.

5. A statement as of the close of the last fiscal year of KfW giving the estimated total of:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Internal floating indebtedness of KfW. (Total to be stated in the currency of the registrant.) The total
principal amount of internal floating indebtedness of KfW, which is defined as euro denominated debt with an initial maturity of one year or less (short-term funds), outstanding as of December 31, 2025, was EUR 17.6 billion.

&nbsp;&nbsp;&nbsp;&nbsp;(b) External floating indebtedness of KfW. (Total to be stated in the respective currencies in which payable.) The
principal amount of external floating indebtedness of KfW, which is defined as non-euro denominated debt with an initial maturity of one year or less (short-term funds), outstanding as of December 31,
2025, was:

---

| | | |
|:---|:---|:---|
| Currency | Principal amount outstanding<br>in currency | Equivalent in euro with<br>conversion rate as of<br>December 31, 2025 |
|  CAD | 27200000.00 | 16907011.44 |
|  AUD | 358500000.00 | 203913315.51 |
|  USD | 43413750000.00 | 36947872340.43 |
|  GBP | 4288900000.00 | 4915081366.03 |
|  NZD | 102000000.00 | 50049067.71 |
|  HKD | 3262000000.00 | 356643050.82 |
|  **Total** |  | **42490466151.94** |

---

6. Statements of the receipts, classified by source, and of the expenditures, classified by purpose, of KfW for
each fiscal year of KfW ended since the close of the latest fiscal year for which such information was previously reported. These statements should be so itemized as to be reasonably informative and should cover both ordinary and extraordinary
receipts and expenditures; there should be indicated separately, if practicable, the amount of receipts pledged or otherwise specifically allocated to any issue registered, indicating the issue.

------

##### [**Table of Contents**](#toc)
See "Combined management report—Economic report—Development of the KfW Group earnings position," "Consolidated financial statements—Consolidated statement of comprehensive income," "Consolidated financial statements—Consolidated notes—Accounting policies," and "Consolidated financial statements—Consolidated notes—Notes to the consolidated statement of comprehensive income," pp. 18 to 21, 65, 71 to 93 and 94 to 108 of Exhibit (e), which are hereby incorporated by reference herein.

7. (a) If any foreign exchange control, not previously reported, has been established by the Federal Republic, briefly describe the effect of any such action, not previously reported.

No foreign exchange control not previously reported was established by the government of the Federal Republic during 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(b) If any foreign exchange control previously reported has been discontinued or materially modified, briefly
describe the effect of any such action, not previously reported.

No foreign exchange control previously reported was discontinued or materially modified by the government of the Federal Republic during 2025.

8. Brief statements as of a date reasonably close to the date of the filing of this report (indicating such date),
in respect of the note issue and gold reserves of the central bank of issue of the registrant, and of any further gold stocks held by the registrant.

Not applicable.

9. Statements of imports and exports of merchandise for each year ended since the close of the latest year for
which such information was previously reported. The statements should be reasonably itemized so far as practicable as to commodities and as to countries. They should be set forth in terms of value and of weight or quantity; if statistics have been
established in terms of value, such will suffice.

Not applicable.

10. The balances of international payments of KfW for each year ended since the close of the latest year for which
such information was previously reported. The statements of such balances should conform, if possible, to the nomenclature and form used in the "Statistical Handbook of the League of Nations." (These statements need to be furnished only
if KfW has published balances of international payments.)

Not applicable.

**Federal Republic of Germany** 

2. A statement as of December 31, 2025 giving the total outstanding of:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Internal funded debt of the Federal Republic. (Total to be stated in the currency of the Federal Republic. If
any internal funded debt is payable in foreign currency, it should not be included under this paragraph (a), but under paragraph (b) of this item.)

The total amount of internal funded indebtedness of the Federal Republic, which is defined as euro denominated debt with an initial maturity of one year or more, outstanding as of December 31, 2025 was EUR 1,638.91 billion (*Source: Open-Data-Portal of the Federal Ministry of Finance, https://www.bundesfinanzministerium.de/Datenportal/Daten/offene-daten/haushalt-oeffentliche-finanzen/Zeitreihe-Schuldenstand-Bruttokreditbedarf-Zinsen-Tilgung-ab1996/Zeitreihe-Schuldenstand-Tilgung-ab1996.html).*

For further information on the principal amount of the outstanding direct debt of the Federal Republic, see "Tables and Supplementary Information—I. Direct Debt of the Federal Government—Summary of the Principal Amount of the Outstanding Direct Debt of the Federal Government", p. G-44 of Exhibit (d), which is hereby incorporated by reference herein.

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;(b) External funded debt of the Federal Republic. (Totals to be stated in the respective currencies in which
payable. No statement need be furnished as to intergovernmental debt.)

None.

3. A statement giving the title, date of issue, date of maturity, interest rate and amount outstanding, together
with the currency or currencies in which payable, of each issue of funded debt of the Federal Republic outstanding as of the close of the last fiscal year of the Federal Republic.

See "Tables and Supplementary Information —I. Direct Debt of the Federal Government", pp. G-44 to G-47 of Exhibit (d), which are hereby incorporated by reference herein.

4. (a) As to each issue of securities of the Federal Republic which is registered, there should be furnished a breakdown of the total amount
outstanding, as shown in Item 3, into the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Total amount held by or for the account of the Federal Republic.

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Total estimated amount held by nationals of the Federal Republic; this estimate need be furnished only if it is
practicable to do so.

Not practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Total amount otherwise outstanding.

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(b) If a substantial amount is set forth in answer to paragraph (a)(1) above, describe briefly the method employed
by the Federal Republic to reacquire such securities.

Not applicable.

5. A statement as of the close of the last fiscal year of the Federal Republic giving the estimated total of:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Internal floating indebtedness of the Federal Republic. (Total to be stated in the currency of the Federal
Republic.)

The total amount of internal floating indebtedness of the Federal Republic, which is defined as euro denominated debt with an initial maturity of less than one year, outstanding as of December 31, 2025 was EUR 90.56 billion *(Source: Open-Data-Portal of the Federal Ministry of Finance, https://www.bundesfinanzministerium.de/Datenportal/Daten/offene-daten/haushalt-oeffentliche-finanzen/Zeitreihe-Schuldenstand-Bruttokreditbedarf-Zinsen-Tilgung-ab1996/Zeitreihe-Schuldenstand-Tilgung-ab1996.html).*

&nbsp;&nbsp;&nbsp;&nbsp;(b) External floating indebtedness of the Federal Republic. (Total to be stated in the respective currencies in
which payable.)

None.

6. Statements of the receipts, classified by source, and of the expenditures, classified by purpose, of the
Federal Republic for each fiscal year of the Federal Republic ended since the close of the latest fiscal year for which such information was previously reported. These statements should be so itemized as to be reasonably informative and should cover
both ordinary and extraordinary receipts and expenditures; there should be indicated separately, if practicable, the amount of receipts pledged or otherwise specifically allocated to any issue registered, indicating the issue.

See "The Federal Republic of Germany—Public Finance", pp. G-36 et seq. of Exhibit (d), which are hereby incorporated by reference herein.

------

##### [**Table of Contents**](#toc)
7. (a) If any foreign exchange control, not previously reported, has been established by the Federal Republic, briefly describe the effect of any such action, not previously reported.

No foreign exchange control not previously reported was established by the Federal Republic during 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(b) If any foreign exchange control previously reported has been discontinued or materially modified, briefly
describe the effect of any such action, not previously reported.

No foreign exchange control previously reported was discontinued or materially modified during 2025.

8. Brief statements as of a date reasonably close to the date of the filing of this report (indicating such date),
in respect of the note issue and gold reserves of the central bank of issue of the Federal Republic, and of any further gold stocks held by the Federal Republic.

See "The Federal Republic of Germany—Monetary and Financial System—Official Foreign Exchange Reserves," p. G-29 of Exhibit (d), which is hereby incorporated by reference herein.

9. Statements of imports and exports of merchandise for each year ended since the close of the latest year for
which such information was previously reported. The statements should be reasonably itemized so far as practicable as to commodities and as to countries. They should be set forth in terms of value and of weight or quantity; if statistics have been
established in terms of value, such will suffice.

See "The Federal Republic of Germany—The Economy—International Economic Relations—Balance of Trade," pp. G-23 et seq. of Exhibit (d), which are hereby incorporated by reference herein.

10. The balances of international payments of the Federal Republic for each year ended since the close of the
latest year for which such information was previously reported. The statements of such balances should conform, if possible, to the nomenclature and form used in the "Statistical Handbook of the League of Nations." (These statements need
to be furnished only if the Federal Republic has published balances of international payments.)

See "The Federal Republic of Germany—The Economy—International Economic Relations—Balance of Payments," pp. G-22 et seq. of Exhibit (d), which is hereby incorporated by reference herein.

------

##### [**Table of Contents**](#toc)
This annual report comprises:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Pages numbered 1 to 9, consecutively.

&nbsp;&nbsp;&nbsp;&nbsp;(b) The following exhibits:

---

| |
|:---|
|  Exhibit (a)<br> – None. |
|  Exhibit (b)<br> – None. |
|  Exhibit (c)<br> – The latest annual budget for the Federal Republic of Germany (pp. G-36 to G-40 of Exhibit (d) hereto). |
|  Exhibit (d)<br> – Description of KfW and the Federal Republic of Germany, dated May 7, 2026. |
|  Exhibit (e)<br> – KfW Financial Information 2025. |
|  Exhibit (f)<br> – Consent of Deloitte GmbH Wirtschaftsprüfungsgesellschaft. |
|  Exhibit (g)<br> – Consent of the Federal Republic of Germany. |

---

This annual report is filed subject to the Instructions for Form 18-K for Foreign Governments and Political Subdivisions thereof.

------

##### [**Table of Contents**](#toc)
**EXHIBIT INDEX** 

---

| | |
|:---|:---|
| **Exhibit** | **Description** |
| (c) | [Latest annual budget for the Federal Republic of Germany (pp. G-36 to G-40 of Exhibit (d) hereto).](d109115dex99d.htm) |
| (d) | [Description of KfW and the Federal Republic of Germany, dated May 7, 2026.](d109115dex99d.htm) |
| (e) | [KfW Financial Information 2025.](d109115dex99e.htm) |
| (f) | [Consent of Deloitte GmbH Wirtschaftsprüfungsgesellschaft.](d109115dex99f.htm) |
| (g) | [Consent of the Federal Republic of Germany.](d109115dex99g.htm) |

---

------

##### [**Table of Contents**](#toc)
**SIGNATURES** 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant KfW has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| ***KfW*** | ***KfW*** | ***KfW*** |
| By: | /s/ STEFAN WINTELS | /s/ STEFAN WINTELS |
|  | Name: | Stefan Wintels |
|  | Title: | Chief Executive Officer |
| By: | /s/ BERND LOEWEN | /s/ BERND LOEWEN |
|  | Name: | Bernd Loewen |
|  | Title: | Member of the Executive Board |

---

Date: May 7, 2026

## Ex-99.D

**Exhibit (d)** 

This description of KfW and the Federal Republic of Germany is dated May 7, 2026 and appears as Exhibit (d) to the Annual Report on Form 18-K of KfW for the fiscal year ended December 31, 2025.

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
|  | **Page** |
|  [PRESENTATION OF FINANCIAL AND OTHER INFORMATION](#ex99_d109115_1) | 3 |
|  [RECENT DEVELOPMENTS](#ex99_d109115_2) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [KFW](#ex99_d109115_3) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [KfW's Results for the Three Months Ended March 31, 2026](#ex99_d109115_4) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [THE FEDERAL REPUBLIC OF GERMANY](#ex99_d109115_6) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Overview of Key Economic Figures](#ex99_d109115_7) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Other Recent Developments](#ex99_d109115_8) | 11 |
|  [KFW](#ex99_d109115_9) | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [GENERAL](#ex99_d109115_10) | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Overview](#ex99_d109115_11) | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Ownership](#ex99_d109115_12) | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Legal Status](#ex99_d109115_13) | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Relationship with the Federal Republic](#ex99_d109115_14) | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Supervision and Regulation](#ex99_d109115_15) | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Corporate Background](#ex99_d109115_16) | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Sustainable Promotion](#ex99_d109115_17) | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Financial Statements and Auditors](#ex99_d109115_18) | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [BUSINESS](#ex99_d109115_19) | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Introduction](#ex99_d109115_20) | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Domestic Promotional Business](#ex99_d109115_21) | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [SME Bank & Private Clients](#ex99_d109115_22) | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Customized Finance & Public Clients](#ex99_d109115_23) | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [KfW Capital](#ex99_d109115_24) | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Export and Project Finance (KfW IPEX-Bank)](#ex99_d109115_25) | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [KfW Entwicklungsbank (KfW Development Bank)](#ex99_d109115_26) | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH](#ex99_d109115_27) | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Financial Markets](#ex99_d109115_28) | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Strategic Shareholdings](#ex99_d109115_29) | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [CAPITALIZATION](#ex99_d109115_30) | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [MANAGEMENT AND EMPLOYEES](#ex99_d109115_31) | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Executive Board](#ex99_d109115_32) | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Board of Supervisory Directors](#ex99_d109115_33) | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Employees](#ex99_d109115_34) | 48 |

---

------

---

| | |
|:---|:---|
|  [THE FEDERAL REPUBLIC OF GERMANY](#ex99_d109115_35) | G-1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [GENERAL](#ex99_d109115_36) | G-1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Area, Location and Population](#ex99_d109115_37) | G-1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Government](#ex99_d109115_38) | G-2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Political Parties](#ex99_d109115_39) | G-3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [International Organizations](#ex99_d109115_40) | G-3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The European Union and European Integration](#ex99_d109115_41) | G-3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Statistical Standards](#ex99_d109115_42) | G-13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [THE ECONOMY](#ex99_d109115_43) | G-14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Overview](#ex99_d109115_44) | G-14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Key Economic Figures](#ex99_d109115_45) | G-14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Economic Outlook](#ex99_d109115_46) | G-15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [General Economic Policy](#ex99_d109115_47) | G-15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Gross Domestic Product](#ex99_d109115_48) | G-17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Sectors of the Economy](#ex99_d109115_49) | G-18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Employment and Labor](#ex99_d109115_50) | G-19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Social Security, Social Protection, and Social Policy](#ex99_d109115_51) | G-21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [International Economic Relations](#ex99_d109115_52) | G-22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [MONETARY AND FINANCIAL SYSTEM](#ex99_d109115_53) | G-28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [The ESCB and the Eurosystem](#ex99_d109115_54) | G-28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Monetary Policy](#ex99_d109115_55) | G-28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Official Foreign Exchange Reserves](#ex99_d109115_56) | G-29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [External Positions of Banks](#ex99_d109115_57) | G-30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Foreign Exchange Rates and Controls](#ex99_d109115_58) | G-30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Financial System](#ex99_d109115_59) | G-31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Securities Market](#ex99_d109115_60) | G-35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [PUBLIC FINANCE](#ex99_d109115_61) | G-36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Receipts and Expenditures](#ex99_d109115_62) | G-36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Germany's General Government Deficit/Surplus and General Government Gross Debt](#ex99_d109115_63) | G-37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Fiscal Outlook](#ex99_d109115_64) | G-39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Tax Structure](#ex99_d109115_65) | G-40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Government Participations](#ex99_d109115_66) | G-42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Direct Debt of the Federal Government](#ex99_d109115_67) | G-43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [TABLES AND SUPPLEMENTARY INFORMATION](#ex99_d109115_68) | G-44 |

---

------

***THIS DOCUMENT (OTHERWISE THAN AS PART OF A PROSPECTUS CONTAINED IN A REGISTRATION STATEMENT FILED UNDER THE U.S. SECURITIES ACT OF 1933) DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF KFW. THE DELIVERY OF THIS DOCUMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.***

**PRESENTATION OF FINANCIAL AND OTHER INFORMATION** 

In this description, references to "€", "euro" or "EUR" are to the single European currency of the member states of the European Union participating in the euro and references to "U.S. dollars", "$" or "USD" are to United States dollars. See "The Federal Republic of Germany—General—The European Union and European Integration" for a discussion of the introduction of the euro.

Unless explicitly stated otherwise, financial information relating to KfW Group presented herein has been prepared in accordance with IFRS<sup>®</sup> Accounting Standards, as adopted by the EU ("IFRS Accounting Standards").

Amounts in tables may not add up due to rounding differences.

On May 6, 2026, the euro foreign exchange reference rate as published by the European Central Bank was EUR 1.00 = U.S. dollar 0.8502 (EUR 1.1762 per U.S. dollar).

In this document, references to the "Federal Republic" and "Germany" are to the Federal Republic of Germany and references to the "Federal Government" are to the government of the Federal Republic of Germany. The terms "KfW Group" and "group" refer to KfW and its consolidated subsidiaries.

------

**RECENT DEVELOPMENTS** 

**KFW** 

**KfW's Results for the Three Months Ended March 31, 2026** 

KfW is not required by law to prepare and publish interim financial statements in conformity with IFRS Accounting Standards applicable to interim financial reporting. Accordingly, KfW only prepares selected interim financial information rather than a full set of interim financial statements. The following information is based on this selected, unaudited interim financial information, which KfW has prepared on the basis of the recognition and measurement principles of IFRS applicable to interim financial reporting. This information is not necessarily indicative of the figures of KfW Group for the full year ending December 31, 2026.

KfW Group's total assets decreased by 1.6%, or EUR 8.8 billion, from EUR 540.7 billion as of December 31, 2025 to EUR 531.9 billion as of March 31, 2026. KfW Group's operating result before valuation and promotional activities amounted to EUR 525 million for the three months ended March 31, 2026, compared to EUR 432 million for the corresponding period in 2025. The main driver for KfW Group's operating result before valuation and promotional activities during the three-month period ended March 31, 2026, was net interest income. KfW Group's operating result before valuation and promotional activities is before (i) risk provisions for lending business, (ii) net gains/losses from securities and investments, (iii) net gains/losses from hedge accounting and other financial instruments at fair value through profit or loss, and (iv) expenses relating to promotional activities. These valuation effects consisted mainly of the following:

&nbsp;&nbsp;&nbsp;&nbsp;• expenses from risk provisions in an amount of EUR 36 million for the three months ended
March 31, 2026, compared to expenses in an amount of EUR 34 million for the corresponding period in 2025;

&nbsp;&nbsp;&nbsp;&nbsp;• positive effects in an amount of EUR 74 million as market values of securities and equity
investments increased in the three months ended March 31, 2026, compared to positive effects of EUR 25 million for the corresponding period in 2025<sup>1</sup>;

&nbsp;&nbsp;&nbsp;&nbsp;• net losses in an amount of EUR 48 million for the three months ended March 31, 2026, due to fair
value changes of derivatives used exclusively for hedging purposes in closed risk positions, compared to net losses in an amount of EUR 120 million for the corresponding period in 2025<sup>2</sup>;
and

&nbsp;&nbsp;&nbsp;&nbsp;• expenses relating to promotional activities in an amount of EUR 120 million for the three months ended
March 31, 2026, compared to expenses in an amount of EUR 115 million for the corresponding period in 2025.

KfW Group's consolidated result for the three-month period ended March 31, 2026 amounted to a profit of EUR 380 million, compared to a profit of EUR 117 million for the corresponding period in 2025.

<sup>1</sup> Previous year figure adjusted due to changed presentation of foreign exchange effects of equity investments in 2026.

<sup>2</sup> KfW generally enters into derivative transactions to economically hedge interest and currency risks in connection with its financing and funding activities. Some economic hedging relationships entered into do not qualify for hedge accounting or the fair value option under IFRS. In these cases, only the fair value changes in the hedging instrument are recognized in the consolidated income statement as net gains/losses from other financial instruments at fair value through profit or loss, whereas fair value changes in the hedged instrument are not. As a result, the economic risk-mitigating effect of such hedging relationships is not reflected in the consolidated income statement. 

------

***Promotional Business Volume***

The following table sets forth a breakdown of commitments by business sector for the three months ended March 31, 2026, compared to the corresponding period in 2025.

PROMOTIONAL BUSINESS VOLUME BY BUSINESS SECTOR\*

---

| | | | |
|:---|:---|:---|:---|
|  | Three months ended<br>March 31, | Three months ended<br>March 31, | Year-to-Year |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2026 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | % change |
|  | (EUR in millions) | (EUR in millions) | (in %) |
|  SME Bank & Private Clients *(Mittelstandsbank & Private Kunden)* | 14840 | 10876 | 36 |
|  Customized Finance & Public Clients *(Individualfinanzierung & Öffentliche Kunden)* | 2102 | 1606 | 31 |
|  KfW Capital | 150 | 41 | 266 |
|  Export and Project Finance (KfW IPEX-Bank) | 4963 | 4503 | 10 |
|  KfW Entwicklungsbank | 1788 | 509 | 251 |
|  DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH | 225 | 129 | 74 |
|  Financial Markets | 0 | 0 | 0 |
|  **Total Promotional Business Volume (1) (2)** | **24068** | **17665** | **36** |

---

\* Amounts in the table may not add up due to rounding differences. 

(1) No adjustments of the total promotional business volume were made for the three months ended March 31, 2025
and March 31, 2026.

(2) Commitments represent the volume of funds committed for loans and other business transactions (with the
exception of program-based global loans), RegioInnoGrowth ("RIG") loans and global funding facilities to *Landesförderinstitute*) in the relevant period, including amounts to be disbursed in future periods, and do not include
amounts disbursed in the relevant period pursuant to commitments made in prior periods. In the case of program-based global loans, RIG loans and global funding facilities to *Landesförderinstitute*, commitments represent the actual volume
of funds disbursed in the relevant period.

KfW's total promotional business volume increased significantly to EUR 24.1 billion during the three-month period ended March 31, 2026, compared to EUR 17.7 billion for the corresponding period in 2025. All of KfW's business sectors contributed to this significant increase, with SME Bank & Private Clients business sector leading in total commitments and KfW Capital and KfW Entwicklungsbank in sectoral growth.

Commitments in the SME Bank & Private Clients business sector amounted to EUR 14.8 billion for the three months ended March 31, 2026, compared to EUR 10.9 billion for the corresponding period in 2025. This increase was attributable to significant growth in both the SME (EUR 7.0 billion compared to EUR 4.9 billion for the corresponding period in 2025) and the Private Client segments (EUR 7.9 billion compared to EUR 5.9 billion for the corresponding period in 2025), which had significantly higher commitments related to energy efficiency and renewable energies, primarily due to higher demand in these segments.

Commitments in the Customized Finance & Public Clients business sector increased significantly to EUR 2.1 billion for the three-month period ended March 31, 2026, compared to EUR 1.6 billion for the corresponding period in 2025. This significant increase was primarily driven by higher commitments related to regional and social infrastructure as well as by a higher volume of funding facilities to *Landesförderinstitute*.

Commitments related to KfW Capital increased significantly to EUR 150 million for the three-month period ended March 31, 2026, compared to EUR 41 million for the corresponding period in 2025. This significant increase was primarily driven by an increase in investments related to innovation, including those made on a fiduciary basis for the Federal Government with governmental funds under the Future Fund (*Zukunftsfonds*) and other venture capital funds investments.

Commitments in KfW's Export and Project Finance business sector for the three-month period ended March 31, 2026, amounted to EUR 5.0 billion, compared to EUR 4.5 billion for the corresponding period in 2025. This increase was a result of higher commitments in the energy, mobility and infrastructure sectors, which were partially offset by lower commitments in the industries and commerce sector.

Commitments related to KfW Entwicklungsbank increased significantly to EUR 1,788 million for the three-month period ended March 31, 2026, compared to EUR 509 million for the corresponding period in 2025 due to increased volumes of funding committed to development and promotional loans.

------

Commitments of DEG increased to EUR 225 million for the three-month period ended March 31, 2026, compared to EUR 129 million as of March 31, 2025. This increase primarily reflected the weak first quarter of 2025, while commitments in the first quarter of 2026 were at a normal level for the beginning of the year. Due to the typically lower level of new commitments at the beginning of the year, deviations in the first quarter compared to the previous year are not uncommon for DEG.

***Sources of Funds***

The volume of funding raised in the capital markets for the three months ended March 31, 2026 totaled EUR 35.4 billion, of which 53.5% was raised in euro, 25.9% in U.S. dollar and the remainder in eight other currencies.

***Capitalization and Indebtedness of KfW Group as of March 31, 2026***

---

| | |
|:---|:---|
|  | (EUR in millions) |
| &nbsp;&nbsp;&nbsp;&nbsp; Borrowings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term funds | 31694 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bonds and other fixed-income securities | 422129 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other borrowings | 24407 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total borrowings | 478231 |
| &nbsp;&nbsp;&nbsp;&nbsp; Equity |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Paid-in subscribed capital (1) | 3300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital reserve | 8447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reserve from the ERP Special Fund | 1191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 27936 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fund for general banking risks | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revaluation reserve | 162 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total equity | 41035 |
|  **Total capitalization** | **519266** |

---

(1) KfW's equity capital, 80% of which is held by the Federal Government and the remaining 20% by the
Länder, amounted to EUR 3,750 million as of March 31, 2026, of which EUR 3,300 million has been paid in pro rata by the Federal Government and the Länder.

The capitalization of KfW Group as of March 31, 2026 is not necessarily indicative of its capitalization to be recorded as of December 31, 2026.

KfW Group's total equity as of March 31, 2026 was EUR 41,035 million, compared to EUR 40,623 million as of December 31, 2025. The increase of EUR 412 million in total equity reflected:

(i) KfW Group's consolidated profit of EUR 380 million for the three months ended March 31, 2026;
and

(ii) an increase of EUR 31 million of revaluation reserves due to valuation results recognized directly in
equity relating to pensions (EUR 22 million) and own credit risk (EUR 9 million).

In connection with the phase-in of the analogous application of banking supervisory law to KfW, the provisions of the EU Capital Requirements Regulation (Regulation EU No 575/2013, "CRR"), the German Banking Act (*Kreditwesengesetz*) and the German Solvency Regulation (*Solvabilitätsverordnung*), which require banks to have adequate own funds (*Eigenmittel*) for the conduct of their business, became applicable to KfW by analogy with effect from January 1, 2016. In June 2017, KfW received approval from the German Federal Financial Supervisory Authority (*Bundesanstalt für Finanzdienstleistungsaufsicht*) to calculate its regulatory capital requirements following the advanced internal ratings-based approach ("IRBA") for a large part of its portfolio as of June 30, 2017. Due to the implementation of the CRR III in January 2025, a significant part of KfW's portfolio migrated from the advanced to the foundation IRBA.

According to Article 92 of the CRR, KfW's total capital ratio amounted to 28.5% and its Tier 1 capital ratio amounted to 28.4%, in each case as of March 31, 2026 (not taking into account the interim profit of the year to date)<sup>3</sup>. The increase of the total capital ratio and the Tier 1 capital ratio compared to December 31, 2025, when the total capital ratio as well as the Tier 1 capital ratio amounted to 27.7%, was mainly due to the consideration of the interim profit for the second half of the year 2025.

<sup>3</sup> According to Article 26(2) CRR.

------

**THE FEDERAL REPUBLIC OF GERMANY** 

**Overview of Key Economic Figures** 

The following economic information regarding the Federal Republic of Germany is derived from the public official documents cited below.

***Gross Domestic Product (GDP)***

GROSS DOMESTIC PRODUCT

(adjusted for price, seasonal and calendar effects)<sup>(1)</sup>

---

| | | |
|:---|:---|:---|
| Reference period | Percentage change on the<br>previous quarter | Percentage change on the same<br>quarter in previous year |
|  1<sup>st</sup> quarter 2025 | 0.4 | -0.3 |
|  2<sup>nd</sup> quarter 2025 | -0.2 | 0.4 |
|  3<sup>rd</sup> quarter 2025 | -0.1 | -0.3 |
|  4<sup>th</sup> quarter 2025 | 0.2 | 0.4 |
|  1<sup>st</sup> quarter 2026 | 0.3 | 0.3 |

---

(1) Adjustment for seasonal and calendar effects according to the Census X13 method.

Germany's gross domestic product ("GDP") grew by 0.3% in the first quarter of 2026 compared with the fourth quarter of 2025 after adjusting for price, seasonal and calendar effects, following the increase at the end of 2025 (0.2% in the fourth quarter of 2025 compared with the third quarter of 2025). This was mainly due to an increase in both household and government final consumption expenditure as well as – according to provisional results available as of April 30, 2026 – growth in exports.

Compared to the first quarter of 2025, price-adjusted GDP in the first quarter of 2026 increased by 0.5%. The price and calendar adjusted GDP was 0.3% higher than in the same quarter of the previous year.

In addition to calculating data for the first quarter of 2026, the Federal Statistical Office, in line with its usual practice, also reviewed the results published earlier for 2025 and included new statistical information in the calculation of the results. This resulted in a downward revision of the rate of change of price-adjusted GDP by 0.1 percentage points for the fourth quarter of 2025. The results remained unchanged in the remaining quarters of the previous year. For the whole year of 2025, the most recent calculations resulted in a 0.3% increase in price and calendar adjusted GDP instead of the previous 0.4%.

*Source: Federal Statistical Office, Gross domestic product in the 1<sup>st</sup> quarter of 2026 up 0.3% on the previous quarter, press release of April 30, 2026 (https://www.destatis.de/EN/Press/2026/04/PE26_153_811.html?nn=2112).* 

------

***Inflation Rate***

INFLATION RATE

(based on overall consumer price index)

---

| | | |
|:---|:---|:---|
| Reference period | Percentage change on the<br>previous month | Percentage change on the same<br>month in previous year |
|  April 2025 | 0.4 | 2.1 |
|  May 2025 | 0.1 | 2.1 |
|  June 2025 | 0.0 | 2.0 |
|  July 2025 | 0.3 | 2.0 |
|  August 2025 | 0.1 | 2.2 |
|  September 2025 | 0.2 | 2.4 |
|  October 2025 | 0.3 | 2.3 |
|  November 2025 | -0.2 | 2.3 |
|  December 2025 | 0.0 | 1.8 |
|  January 2026 | 0.1 | 2.1 |
|  February 2026 | 0.2 | 1.9 |
|  March 2026 | 1.1 | 2.7 |
|  April 2026 | 0.6 | 2.9 |

---

(1) Provisional figures.

The inflation rate in Germany is expected to be +2.9% in April 2026. It is measured as the change in the consumer price index (CPI) compared with the same month a year earlier. Based on preliminary results as of April 29, 2026, the Federal Statistical Office (Destatis) also reports that consumer prices increased by 0.6% on March 2026. The inflation rate excluding food and energy, often referred to as core inflation, is expected to stand at +2.3% in April 2026. Energy prices are expected to be up 10.1% on the same month of the previous year. This is the largest increase in energy prices since February 2023 (+19.1% on February 2022).

The inflation rate in Germany amounted to 2.7% in March 2026, after 1.9% in February 2026, 2.1% in January 2026 and 1.8% in December 2025. In March 2026, the most important driver of inflation was the increase in energy and service prices, which was offset in part by a lower than average increase in food prices. The inflation rate excluding food and energy, often referred to as core inflation, was 2.5% in March 2026, unchanged since January and February of that year.

The total prices of energy products were 7.2% higher in March 2026 than in March 2025. This was the first year-on-year increase in energy prices since December 2023. In February 2026, prices had been down 1.9% year on year. Motor fuel prices in March 2026 were up 20.0% on March 2025. The price of heating oil also registered a sharp increase, rising by 44.4%. These marked price increases were largely due to the conflict in the Middle East and the ensuing price developments on the crude oil market. Despite the increase in the price of heating oil, household energy on the whole was 1.2% less expensive in March 2026 than a year earlier (February 2026: -3.5%). Year on year, lower prices were recorded for electricity (-4.5%), natural gas including operating costs (-2.9%) and district heating (-1.2%), for example. This was due, in part, to measures implemented by the Federal Government since the start of the year (including reduced transmission network charges and the abolition of the gas storage neutrality charge).

Food price increases decelerated in March 2026 and were significantly lower than the overall rate of inflation, rising by 0.9% year-on-year after a 1.1% increase in February. The increase in prices from March 2025 to March 2026 was driven in particular by price increases for eggs (+14.8%), sugar, jam, honey and other confectionery (+6.1%, including chocolate: +9.6%), fruit (+4.7%), fresh vegetables (+3.8%) and meat and meat products (+3.6%). By contrast, price decreases were observed particularly for edible fats and oils (-17.6%, including butter: -29.1%; olive oil: -11.8%). In addition, lower prices were recorded for dairy products (-5.4%).

Overall goods prices were up by 2.3% year-on-year. Non-durable consumer goods increased by 3.4%, while durable goods increased by 0.5%. Aside from the rise in food prices by 0.9% and energy products by 7.2%, other products were also more expensive, in particular non-alcoholic beverages (+4.3%, including coffee, tea and cocoa: +12.1%) and tobacco products (+6.1%). By contrast, lower prices were recorded, for example, for major household appliances (-2.8%) and consumer electronics (-5.6%).

Service prices continued their upward trend, increasing by 3.2% year-on-year. Compared with goods, the price increases for services have been higher than overall inflation since January 2024. Year on year, particularly sharp price increases were registered for social protection services (+7.0%) and combined passenger transport services (+6.2%), in the latter case due, in particular, to the increase in price of the Germany Ticket at the start of the year. Compared with the previous year, substantial price increases were also observed in March 2026 for the maintenance and repair of vehicles (+4.8%), water supply and miscellaneous services relating to dwellings (+3.5%), catering services in restaurants, cafés and the like (+3.3%) and insurance services (+3.2%) Net rents exclusive of heating expenses (+1.9% on the same month of the previous year) continued to be a significant factor contributing to the overall development of prices in March 2026. Only a few services cost less than in the same month a year earlier, including telecommunications services (-0.1%).

------

Compared to February 2026, the consumer price index increased by 1.1% in March 2026. As a result of the conflict in the Middle East, energy prices rose significantly (+7.7%) compared with the previous month. In particular, energy prices increased by 7.7% compared to February 2026 as a result of the conflict in the Middle East. This increase was driven in particular by increases in the prices of motor fuels (+15.6%, including diesel fuel: +22.6%) and heating oil (+43.2%). In addition, higher prices were registered for international flights (+10.0%), package holidays and clothing (+4.4% in each case), partly due to seasonal factors. Food prices showed very little change (+0.1%). Fresh fruit, for example, was more expensive (+1.3%), but fresh vegetables, in particular, were less expensive (-2.8%, including cucumbers: -19.1%, butterhead or iceberg lettuce: -5.1%).

*Sources: Federal Statistical Office, Short-term indicators: Price indices at a glance (consumer prices, retail prices, producer prices, selling prices in wholesale trade, import prices, export prices). Tables with values and rates of change (https://www.destatis.de/EN/Themes/Economy/Short-Term-Indicators/Prices/pre110.html); Federal Statistical Office, Inflation rate of +2.9% expected in April 2026, press release of April 29, 2026 (https://www.destatis.de/EN/Press/2026/04/PE26_149_611.html?nn=2112).* 

------

***Unemployment Rate***

UNEMPLOYMENT RATE

(percent of unemployed persons in the total labor force according to the

International Labour Organization (ILO) definition) (1)

---

| | | |
|:---|:---|:---|
| Reference period | Original percentages | Adjusted<br>percentages (2) |
|  March 2025 | 3.7 | 3.6 |
|  April 2025 | 3.8 | 3.7 |
|  May 2025 | 3.8 | 3.7 |
|  June 2025 | 3.6 | 3.7 |
|  July 2025 | 3.9 | 3.8 |
|  August 2025 | 3.9 | 3.8 |
|  September 2025 | 4.0 | 3.9 |
|  October 2025 | 3.6 | 3.9 |
|  November 2025 | 3.8 | 3.9 |
|  December 2025 | 3.7 | 4.0 |
|  January 2026 | 4.2 | 4.0 |
|  February 2026 | 4.2 | 4.0 |
|  March 2026 | 4.2 | 4.0 |

---

(1) The time series on unemployment are based on the German Labour Force Survey.

(2) Trend cycle component (X-13-ARIMA method using JDemetra+; calculation by Eurostat).

Approximately 42.3 million persons resident in Germany were in employment in March 2026. According to provisional calculations of the Federal Statistical Office, the seasonally adjusted number of persons in employment decreased by 25,000, or 0.1%, compared to the previous month. In the period from May 2025 to February 2026, employment decreased by an average of 16,000 people month on month.

Compared to March 2025, the number of employed persons in March 2026 decreased by 174,000 (-0.4%). The downward trend in the year-on-year labor market figures, which has been observed since August 2025, therefore continued. In both January and February 2026, the year-on-year rate of change stood at -0.3%.

In March 2026, the number of unemployed persons increased by approximately 210,000, or 12.9%, compared to March 2025. Adjusted for seasonal and irregular effects, the number of unemployed persons in March 2026 stood at 1.8 million, reflecting a decrease of 6,000 people or 0.4% compared to February 2026. Between February 2026 and March 2026, the adjusted unemployment rate was unchanged at 4.0%.

*Sources: Federal Statistical Office, Employment in March 2026 down on the previous month after seasonal adjustment, press release of April 30, 2026 (https://www.destatis.de/EN/Press/2026/04/PE26_152_132.html?nn=2112); Federal Statistical Office, Genesis-Online Datenbank, Result 13231-0001, Unemployed persons, persons in employment, economically active population, unemployment rate: Germany, months, original and adjusted data, accessed on April 30, 2026 (https://www-genesis.destatis.de/genesis/online?sequenz=tabelleErgebnis&selectionname=13231-0001&zeitscheiben=2&leerzeilen=false&language=en#abreadcrumb).* 

------

***Current Account and Foreign Trade***

CURRENT ACCOUNT AND FOREIGN TRADE

---

| | | |
|:---|:---|:---|
|  | (balance in EUR billions) (1) | (balance in EUR billions) (1) |
| Item | January-February 2026 | January-February 2025 |
|  Goods | 20.7 | 33.0 |
|  Services | -4.8 | -10.2 |
|  Primary income | 11.5 | 22.9 |
|  Secondary income | -5.6 | -10.8 |
|  **Current account** | **22.0** | **34.9** |

---

(1) Figures may not add up due to rounding.

*Source: Deutsche Bundesbank, Major items of the German balance of payments, April 10, 2026 (https://www.bundesbank.de/resource/blob/810962/2ac374ac7140be331361f568a767c87c/472B63F073F071307366337C94F8C870/aw1e1-1a-data.pdf).* 

**Other Recent Developments** 

***Monetary Policy***

On April 30, 2026, the Governing Council of the European Central Bank ("ECB") again decided to keep each of the three key ECB interest rates – the deposit facility rate, the main refinancing operations rate and the marginal lending facility rate – unchanged. The Governing Council has maintained the ECB's key interest rates unchanged since its monetary policy decision of June 5, 2025, which reduced each of these rates by 25 basis points. As of the date of this amendment, the deposit facility, main refinancing operations and marginal lending facility rates are 2.00%, 2.15% and 2.40%, respectively.

In announcing its decision, the Governing Council noted that the euro area had entered the current period of surging energy prices with inflation at around the ECB's two per cent target, and that the economy has shown resilience over recent quarters. The Governing Council stated its view that longer-term inflation expectations remain well anchored, although inflation expectations over shorter horizons have moved up significantly.

The Governing Council reported that the asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.

*Sources: European Central Bank, Monetary policy decisions, press release of April 30, 2026 (https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.mp260430~81b7179e6f.en.html).* 

***War in Middle East***

On February 28, 2026 the United States and Israel commenced military actions against Iran. Israel also commenced military actions against Hezbollah in Lebanon. On April 8, 2026, Iran, the United States and Israel began a temporary ceasefire; on April 16, 2026, the United States announced that Israel and Lebanon had also agreed to a temporary ceasefire.

Despite the ceasefire, the United States continues a naval blockade of Iranian ports, and Iran continues to restrict the passage of commercial shipping through the Strait of Hormuz. Diplomatic efforts, including indirect and direct negotiations between Iran and the United States in Islamabad, Pakistan, have not yet produced a permanent resolution of hostilities.

The military and naval actions in Iran, the Persian Gulf and the surrounding Gulf states have driven higher energy prices in Germany and other parts of the world. In addition, international supply chains have experienced significant disruption. The direct and indirect effects of these developments have the potential to increase inflation significantly and to adversely affect GDP growth in Germany and other major economies.

As of the date of this annual report, it is not possible to predict the ultimate resolution of the hostilities in the Middle East or their precise effect on the global and German economies.

*Sources: "U.S., Iran and Israel Agree to Cease-Fire", The New York Times, April 7, 2026 (https://www.nytimes.com/live/2026/04/07/world/iran-war-trump-news?smid=url-share#f1657559-8135-50c9-ad7f-63636e6a5106); "Trump says Israel and Lebanon agree to temporary ceasefire", Al Jazeera, April 16, 2026 (https://www.aljazeera.com/news/2026/4/16/trump-says-israel-and-lebanon-agree-to-temporary-ceasefire); "US begins blockade of Iran's ports, Tehran threatens retaliation", Reuters, April 13, 2026 (updated April 14, 2026) (https://www.reuters.com/world/middle-east/us-blockade-iran-after-talks-fail-yield-a-deal-2026-04-13/).* 

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**KFW** 

**GENERAL** 

**Overview** 

KfW is a public law institution (*Anstalt des öffentlichen Rechts*) serving domestic and international public policy objectives of the Federal Government of the Federal Republic. KfW promotes its financing activities under the umbrella brand name KfW Bankengruppe ("KfW Group").

With total assets of EUR 540.7 billion as of December 31, 2025, including loans and advances of EUR 431.9 billion, KfW is Germany's flagship promotional bank and ranks among Germany's largest financial institutions. KfW's promotional business volume amounted to EUR 98.0 billion in 2025. For more information on KfW's promotional business volume, see the table "Promotional Business Volume by Business Sector" in "Business—Introduction."

KfW conducts its business in the following business sectors:

&nbsp;&nbsp;&nbsp;&nbsp;• SME Bank & Private Clients (*Mittelstandsbank & Private Kunden*): offers
highly standardized products primarily for small and medium-sized enterprises ("SMEs"), business founders, start-ups, self-employed professionals and private
individuals;

&nbsp;&nbsp;&nbsp;&nbsp;• Customized Finance & Public Clients (*Individualfinanzierung & Öffentliche Kunden*): provides individual financing solutions for municipal and social infrastructure, and offers corporate loans and project financing as well as customized financing for financial institutions and *Landesförderinstitute*;

&nbsp;&nbsp;&nbsp;&nbsp;• KfW Capital GmbH & Co. KG ("KfW Capital") invests in German and European venture capital and
venture debt funds with the aim of improving access to capital for innovative, technology-oriented growth companies in Germany through professionally managed funds. KfW Capital is a legally independent entity wholly owned by KfW;

&nbsp;&nbsp;&nbsp;&nbsp;• Export and Project Finance: KfW IPEX-Bank GmbH ("KfW IPEX-Bank") offers customized financing for
exports and project and corporate financing worldwide. KfW IPEX-Bank is a legally independent entity wholly owned by KfW;

&nbsp;&nbsp;&nbsp;&nbsp;• KfW Entwicklungsbank (KfW Development Bank): is responsible for KfW's public sector development cooperation
activities;

&nbsp;&nbsp;&nbsp;&nbsp;• DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH ("DEG"): finances private-sector
investments in developing countries. DEG is a legally independent entity wholly owned by KfW; and

&nbsp;&nbsp;&nbsp;&nbsp;• Financial Markets: comprises KfW's treasury, funding, asset management and other capital markets-related
activities.

In addition, KfW manages its direct and indirect strategic shareholdings, which include a number of investments made in companies pursuant to Special Federal Mandates (*Zuweisungsgeschäfte*; "Special Federal Mandates") by the Federal Government in accordance with article 2 paragraph 4 of the Law Concerning KfW (*Gesetz über die Kreditanstalt für Wiederaufbau*, or the "KfW Law"). For more information on KfW's business sectors and its strategic shareholdings, see "Business."

KfW's offices are located at Palmengartenstraße 5-9, 60325 Frankfurt am Main, Germany. KfW's telephone number is 00-49-69-74310. KfW also maintains branch offices in Berlin and Bonn, Germany, as well as a liaison office to the EU in Brussels, Belgium.

**Ownership** 

The Federal Republic holds 80% of KfW's subscribed capital, and the German federal states (each, a "Land" and together, the "Länder") hold the remaining 20%. The KfW Law does not provide for shareholders' meetings; instead, the Board of Supervisory Directors assumes the responsibilities of a shareholders' meeting. For more information on the Board of Supervisory Directors, see "Management and Employees—Board of Supervisory Directors."

Shares in KfW's capital may not be pledged; they may not be transferred to entities other than the Federal Republic or the Länder.

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Capital contributions have been, and are expected to continue to be, made to KfW in such proportions as to maintain the relative shares of capital held by the Federal Republic and the Länder.

**Legal Status** 

KfW is organized under the KfW Law as a public law institution with unlimited duration. As a public law institution serving public policy objectives of the Federal Government, KfW itself is not subject to corporate taxes (although certain of its subsidiaries are), and as a promotional bank, KfW does not seek to maximize profits. KfW does, however, seek to maintain an overall level of profitability that allows it to strengthen its equity base in order to support its promotional activities. KfW is prohibited under the KfW Law from distributing profits, which are instead allocated to statutory reserves and to separately reportable reserves. KfW is generally also prohibited under the KfW Law from taking deposits or engaging in the financial commission business.

**Relationship with the Federal Republic** 

***Guarantee of the Federal Republic***

The KfW Law expressly provides that the Federal Republic guarantees all existing and future obligations of KfW in respect of money borrowed, bonds and notes issued and derivative transactions entered into by KfW, as well as obligations of third parties that are expressly guaranteed by KfW (KfW Law, article 1a). Under this statutory guarantee (the "Guarantee of the Federal Republic"), if KfW fails to make any payment of principal or interest or any other amount required to be paid with respect to securities issued by KfW, or if KfW fails to make any payment required to be made under KfW's guarantee when that payment is due and payable, the Federal Republic will be liable at all times for that payment as and when it becomes due and payable. The Federal Republic's obligation under the Guarantee of the Federal Republic ranks equally, without any preference, with all of its other present and future unsecured and unsubordinated indebtedness. Holders of securities issued by KfW or issued under KfW's guarantee may enforce this obligation directly against the Federal Republic without first having to take legal action against KfW. The Guarantee of the Federal Republic is strictly a matter of statutory law and is not evidenced by any contract or instrument. It may be subject to defenses available to KfW with respect to the obligations covered.

***Institutional Liability (Anstaltslast)***

KfW is a public law institution (*Anstalt des öffentlichen Rechts*). Accordingly, under the German administrative law principle of *Anstaltslast*, the Federal Republic, as the constituting body of KfW, has an obligation to safeguard KfW's economic basis. Under *Anstaltslast*, the Federal Republic must keep KfW in a position to pursue its operations and enable it, in the event of financial difficulties, through the allocation of funds or in some other appropriate manner, to meet its obligations when due. *Anstaltslast* is not a formal guarantee of KfW's obligations by the Federal Republic, and creditors of KfW do not have a direct claim against the Federal Republic.

Nevertheless, the effect of this legal principle is that KfW's obligations, including the obligations to the holders of securities issued by it or issued under KfW's guarantee, are fully backed by the credit of the Federal Republic. The obligation of the Federal Republic under *Anstaltslast* would constitute a charge on public funds that, as a legally established obligation, would be payable without the need for any appropriation or any other action by the German Parliament.

***Understanding with the European Commission***

In order to clarify that the Federal Republic's responsibility for KfW's obligations was and is compatible with EU law prohibitions against state aid, the German Federal Ministry of Finance and the European Commissioner for Competition held discussions which were formalized in an understanding reached on March 1, 2002. In the understanding with the European Commission, it was agreed that, in respect of the promotional activities for which KfW is responsible, KfW will continue to benefit from *Anstaltslast* and the Guarantee of the Federal Republic. The understanding acknowledged that KfW's role in providing financing for, in particular, SMEs, risk capital, environmental protection, technology/innovation, infrastructure and housing, as well as its cooperation with developing countries, is of a promotional nature and thus compatible with EU rules.

In the business sector of Export and Project Finance, the understanding with the European Commission required KfW to transfer to a legally independent subsidiary that portion of export finance and domestic and international project finance activities which the European Commission deemed to fall outside the scope of the promotional activities of KfW. The transfer of such activities was to be effected by December 31, 2007, and as from that date, KfW has not been permitted to fund the subsidiary at other than market rates of interest or to extend to the subsidiary any benefits of *Anstaltslast* or the Guarantee of the Federal Republic.

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KfW continues to be permitted, however, to engage directly in the following promotional export and project finance activities:

&nbsp;&nbsp;&nbsp;&nbsp;• implementation of international promotional programs, such as the interest-rate subsidized CIRR (Commercial
Interest Reference Rate) and ASU (Aircraft Sector Understanding) schemes, which are recognized as promotional activities in accordance with the Organization for Economic Cooperation and Development ("OECD") consensus;

&nbsp;&nbsp;&nbsp;&nbsp;• participation in syndicated financing activities outside the EU, the European Economic Area and countries holding
the status of official candidate for EU membership, subject to certain conditions, and sole financing activities in countries in which sufficient sources of financing do not exist; and

&nbsp;&nbsp;&nbsp;&nbsp;• participation in projects in the interest of the EU that are co-financed by the European Investment Bank or similar European financing institutions.

The European Commission transformed the understanding into a decision, which the Federal Republic formally accepted. In August 2003, a part of the Promotional Bank Restructuring Act (*Förderbankenneustrukturierungsgesetz*) implemented the understanding with the European Commission and amended the KfW Law accordingly.

On January 1, 2008, KfW IPEX-Bank, a limited liability company (*Gesellschaft mit beschränkter Haftung*) formed as a wholly owned subsidiary of KfW, commenced operations as a legally independent entity, thus satisfying the requirements set forth in the understanding with the European Commission. KfW IPEX-Bank conducts those export and project finance activities which the European Commission deemed to fall outside the scope of KfW's promotional activities directly and on its own behalf. For more information on KfW IPEX-Bank, see "Business—Export and Project Finance (KfW IPEX-Bank)."

**Supervision and Regulation** 

***Supervision***

The Federal Ministry of Finance, acting in consultation with the Federal Ministry for Economic Affairs and Climate Action, exercises legal supervision (*Rechtsaufsicht*) over KfW, i.e., it supervises KfW's compliance with applicable laws and may adopt all necessary measures to ensure such compliance. Legal supervision primarily comprises supervision of compliance with the KfW Law and KfW's Bylaws, but also with all other applicable laws and regulations, except for certain provisions of bank regulatory law referenced in the following paragraph and described in "Regulation." The relevant Federal Ministers are represented on KfW's Board of Supervisory Directors, which supervises KfW's overall activities. See below "Management and Employees—Board of Supervisory Directors."

In addition to being subject to legal supervision by the Federal Ministries, in October 2013, KfW became subject to banking-specific supervision exercised by the German Federal Financial Supervisory Authority (*Bundesanstalt für Finanzdienstleistungsaufsicht*, or "BaFin"). This supervision was established by a ministerial regulation (*KfW–Verordnung*, or "KfW Regulation"), which implements an amendment to the KfW Law that became effective in July 2013. The KfW Regulation, while maintaining KfW's general exemption from bank regulatory law, specifies those provisions of bank regulatory law which are to apply to KfW by analogy and assigns the supervision of compliance with these provisions to BaFin. In exercising its supervision, BaFin cooperates with the Deutsche Bundesbank in accordance with normal bank supervisory procedures. For further details, see "Supervision and Regulation—Regulation."

In addition, to comply with the financial reporting and auditing standards generally applicable to banks in Germany, KfW, under the KfW Law, is subject to special auditing standards for government-owned entities set forth in the Budgeting and Accounting Act (*Haushaltsgrundsätzegesetz*). These special auditing standards require that KfW's annual audit, above and beyond its normal scope, cover the proper conduct of KfW's business by its management. The resulting auditor's report is to enable the Board of Supervisory Directors, the responsible Federal Ministries and the Federal Court of Auditors (*Bundesrechnungshof*) to form their own opinion and to take action if required.

Finally, as a government-owned entity, KfW is subject to audits by the Federal Court of Auditors (*Bundesrechnungshof*) with regard to its economical use of funds pursuant to the Budgeting and Accounting Act (*Haushaltsgrundsätzegesetz*).

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***Regulation***

*Overview of KfW's Regulatory Status* 

KfW is generally exempt from bank regulatory laws and regulations, as it qualifies neither as a "credit institution" or "financial services institution" within the meaning of the German Banking Act (*Gesetz über das Kreditwesen*, or "KWG"), nor as a "credit institution" within the meaning of relevant EU directives and regulations, including in particular the EU Capital Requirements Directive (Directive 2013/36/EU, as amended) ("CRD") and the EU Capital Requirements Regulation (Regulation (EU) No. 575/2013, as amended) ("CRR"). However, by operation of the KfW Regulation, which has been in effect since January 1, 2016, considerable portions of the KWG and the CRR, including relevant implementing rules and regulations, apply by analogy to KfW.

The KfW Regulation takes into account KfW's special status as an entity not generally engaged in deposit taking, characterized by a low-risk profile in its lending business and benefiting from the Guarantee of the Federal Republic. It therefore provides for certain modifications and exceptions in connection with the analogous application of the relevant rules and regulations.

The analogous application of EU and national bank regulatory law imposed by the KfW Regulation is without prejudice to KfW's status as a "public sector entity" within the meaning of article 4 paragraph 1 no. 8 of the CRR. This status confers certain advantages to KfW's refinancing activities because exposures to public sector entities held by banks are privileged as to capital requirements, large exposures limitations and liquidity measurement under EU and national bank regulatory law. Securities issued by KfW, such as bonds and notes, are eligible in the EU as level 1 assets pursuant to article 10 paragraph 1 lit. (c) (v) of the Commission Delegated Regulation (EU) 2015/61 of October 10, 2014 ("Delegated Regulation"), subject to all other requirements stated in the Delegated Regulation being met.

*Bank Regulatory Rules and Regulations Applied by Analogy* 

By operation of the KfW Regulation, bank regulatory requirements for corporate governance set forth in Sections 25c through 25d of the KWG apply to KfW by analogy. To comply with these requirements, certain adjustments were made to the committee structure of KfW's Board of Supervisory Directors in 2014. For more information on the committee structure of KfW's Board of Supervisory Directors, see "Management and Employees—Board of Supervisory Directors."

Since January 1, 2018, the bank regulatory requirements for remuneration policies set forth in Section 25a of the KWG and further specified in the German Remuneration Regulation for Credit Institutions (*Institutsvergütungsverordnung*, or "IVV") apply to KfW.

The capital adequacy regime set forth in part 2 titles I through III and part 3 titles I through VI of the CRR has become applicable to KfW by analogy virtually in its entirety with effect from January 1, 2016, including the calculation of regulatory own funds and own funds requirements on a consolidated basis. KfW is also subject to the capital buffers regime introduced by CRD and transposed into national law in Sections 10c through 10i of the KWG. In June 2017, KfW received approval from BaFin to calculate its regulatory capital requirements in accordance with the Advanced Internal Ratings-Based Approach ("IRBA") for the vast majority of its portfolio as of June 30, 2017. The IRBA exists in two variants: Foundation IRBA and Advanced IRBA. The Foundation IRBA allows banks to use their own internal ratings for credit risk assessment, while other key risk parameters, such as loss given default, are set by regulators. The Advanced IRBA permits banks to internally estimate all relevant risk components, including probability of default, loss given default, exposure at default, and maturity enabling a more comprehensive and customized risk measurement. Due to the implementation of the EU Capital Requirements Regulation III (Regulation (EU) No. 2024/1623 amending Regulation (EU) No. 575/2013) ("CRR III") in January 2025, a significant part of KfW's portfolio migrated from the Advanced IRBA to the Foundation IRBA. According to article 92 of the CRR, KfW's total capital ratio as well as its Tier 1 capital ratio amounted to 27.7%, in each case as of December 31, 2025 (not taking into account the interim profit of the second half of 2025)<sup>4</sup>. The decrease of the total capital ratio and the Tier 1 capital ratio compared to December 31, 2024, when the total capital ratio amounted to 30.3% and the Tier 1 capital ratio amounted to 30.2%, was mainly due to the regulatory adjustment resulting from implementation of the CRR III. This decrease was offset in part by the interim profit for the second half of 2024 and the first half of 2025.

In connection with the application of the appropriate requirements of the capital adequacy regime, the overall capital requirement for KfW Group's total capital ratio as of December 31, 2025 was 14.7%, consisting of a total supervisory review and evaluation process capital requirement ("TSCR") of 10.5% plus a Capital Conservation Buffer of 2.5%, a buffer for Other Systemically Important Institutions (O-SIIs) in Germany of 1.0%, a systemic risk buffer of 0.02% for risk weighted assets in Norway, which was reciprocally introduced by BaFin in response to the imposition of such a risk buffer for German banks by the Norwegian Central Bank, and a Countercyclical Capital Buffer of 0.65%. The TSCR for KfW Group includes a supervisory review and evaluation process ("SREP") surcharge, which is generally meant to reflect the specific risk situation of an individual bank. On March 6, 2025, KfW Group's SREP surcharge was set at 2.0%. In January 2026, BaFin increased the surcharge to 2.25% overall, applicable as of January 28, 2026. In addition, the TSCR for KfW Group includes an additional surcharge for certain findings from standard audits by Deutsche Bundesbank and BaFin. As of December 31, 2025, this surcharge amounted to 0.5% overall.

<sup>4</sup> According to article 26(2) CRR.

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As of January 1, 2016, KfW, by analogy, became subject to the large-exposures regime of part IV of the CRR as supplemented by the KWG and relevant implementing rules and regulations. Under this regime, exposures to any one client or group of connected clients are limited to 25% of eligible own funds and exposures exceeding 10% of eligible own funds are subject to special internal monitoring requirements and a reporting obligation to the German bank supervisory authorities.

In addition, KfW has been applying the provisions concerning leverage ratio with effect from January 1, 2016 by analogy. Under this regime, the ratio of KfW's Tier 1 capital to the carrying value of assets and off-balance sheet exposures is calculated on a consolidated basis. The leverage ratio is monitored internally and has been part of the prudential requirements since June 2021.

According to a decision made by BaFin in December 2015, certain provisions of the CRR such as own funds requirements, large exposures and leverage need only be considered at the group level (i.e., on a consolidated basis) and not at the entity level.

Although it was already subject to the German Anti-Money Laundering Act (*Geldwäschegesetz*), on January 1, 2016 KfW also became subject to the provisions of the KWG concerning money laundering, terrorist financing and other criminal offences at the group and entity levels.

Finally, the bank regulatory requirements for risk management systems set forth in the KWG and in the German Minimum Requirements for Risk Management (*Mindestanforderungen an das Risikomanagement*, or "MaRisk") became applicable to KfW by analogy with effect from January 1, 2016, and provide for sound systems for risk strategy planning, the implementation of risk management and financial and operational controls as well as requirements for credit decision-making processes. Certain exemptions are granted in this context for Special Federal Mandates, i.e., those activities which KfW carries out as requested by the Federal Government, usually at the Federal Republic's economic risk.

The KfW Regulation does not encompass the application of the liquidity regime set forth in the CRR and the KWG. On the same grounds, KfW is generally exempt from EU and national disclosure requirements and from the EU Bank Recovery and Resolution Directive (Directive 2014/59/EU).

The *Finanzmarktdigitalisierungsgesetz* (Financial Market Digitalization Act – FinmadiG) of December 27, 2024, which came into effect on December 30, 2024, amended the KfW Regulation. The amendment extended the regulatory framework to be complied with by KfW to include EU Regulation 2022/2554 on digital operational resilience in the financial sector (DORA).

*Supervisory Structure and Enforcement Powers* 

The supervision of KfW's compliance with bank regulatory laws and regulations is assigned to BaFin in cooperation with Deutsche Bundesbank in accordance with BaFin's general risk-oriented supervisory review and evaluation process. In this context, Deutsche Bundesbank undertakes the ongoing audit and analysis of banks with regard to both their financial stability and the adequacy of their internal governance and risk-management systems. Deutsche Bundesbank receives and preprocesses relevant data, while final decision- making and the exercise of enforcement powers are reserved for BaFin.

For purposes of supervision, the KfW Regulation has subjected KfW by analogy to the reporting and information requirements generally applicable to banks in Germany, with the exception of the automated access to client account details, with effect from January 1, 2016. After a transition period agreed with the supervisory authorities, KfW implemented a fully-fledged regulatory reporting system as of January 1, 2020.

In addition, the KfW Regulation subjects KfW by analogy to certain enforcement powers of BaFin, which comprise, among other matters, the right to demand, under certain circumstances, increases of regulatory own funds and/or a reduction of regulatory risk, or to demand changes in the senior management of KfW.

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Since KfW does not qualify as a regulated entity under national or EU bank regulatory law, KfW did not become subject to the changes in the national and EU bank supervisory structure that have taken effect in recent years. In particular, KfW is not subject to supervision by the ECB pursuant to Council Regulation (EU) No. 1024/2013 establishing the European Single Supervisory Mechanism ("SSM"). KfW IPEX-Bank was included in the ECB's comprehensive assessment of large banks conducted in 2014 in cooperation with national supervisory authorities of member states participating in the SSM. According to a decision of the ECB in September 2014, KfW IPEX-Bank did not qualify as a significant credit institution at that time. By legal notice dated November 11, 2024, KfW IPEX-Bank was informed it is now classified as a significant institution and therefore has been supervised directly by ECB from January 1, 2025 onwards. The primary reason for this change is the fact that, as of December 31, 2023, KfW IPEX-Bank's total assets, as measured before consolidation under IFRS<sup>®</sup> Accounting Standards as adopted by the EU ("IFRS Accounting Standards"), had increased to EUR 32.8 billion. For more information on KfW IPEX-Bank, see "Business—Export and Project Finance (KfW IPEX-Bank)." For more information on the SSM, see "Federal Republic of Germany—Monetary and Financial System—Financial System—European Financial System—European System of Financial Supervision and European Banking Union."

**Corporate Background** 

KfW was established in 1948 by the Administration of the Combined Economic Area, the immediate predecessor of the Federal Republic. Originally, KfW's purpose was to distribute and lend funds of the European Recovery Program (the "ERP"), which is also known as the Marshall Plan. Even today, several of KfW's programs to promote the German and European economies are supported using funds to subsidize interest rates from the so-called "ERP Special Fund." KfW has expanded and internationalized its operations over the past decades. In 1994, following the reunification of the Federal Republic and the former German Democratic Republic ("GDR"), KfW assumed the operations of the former central bank of the GDR (*Staatsbank*), which was located in Berlin, Germany.

In September 2001, KfW acquired DEG from the Federal Republic. DEG is a limited liability company that acts as the German development finance institution for the promotion of private enterprises in developing countries and emerging economies. For more information on DEG, see "Business—DEG—Deutsche Investitions- und Entwicklungsgesellschaft mbH."

In 2003, Deutsche Ausgleichsbank ("DtA"), which was based in Bonn, Germany, merged into KfW. DtA was formed in 1950 as a public law institution and promotional bank, and was particularly active in the area of lending to SMEs and start-up businesses. The merger was accomplished through the Promotional Bank Restructuring Act and was designed to restructure and simplify promotional banking in the Federal Republic and harmonize it with the understanding reached with the European Commission.

**Sustainable Promotion** 

KfW Group has set sustainable promotion as its primary strategic objective and aims to improve economic, social and environmental conditions around the world, with an emphasis on promotion of the German economy. For more information on KfW's strategic objectives, see "Combined Management Report — Basic Information on KfW Group — Strategic Objectives 2030" included in Exhibit (e) to this annual report. Against this background, KfW supports the sustainability goals of the Federal Republic, the EU and the international community and is taking action to help implement the Federal Government's National Sustainable Development Strategy, to achieve the United Nations' Agenda 2030 objectives together with its Sustainable Development Goals ("SDGs") and to put the Paris Agreement into practice. In addition, the "Policy Statement of KfW and its Subsidiaries on Human Rights and its Human Rights Strategy" from 2023 reflects the crucial importance of human rights for all of KfW's activities. Apart from financing investments for a more sustainable economy, KfW, on its own initiative and in cooperation with other financial market participants, strives to set benchmarks and standards for credit and capital markets, to act as a driving force for national and international sustainability initiatives and to offer its expertise to political decision-makers in Germany, Europe and worldwide.

KfW's sustainability mission statement, which reflects a holistic approach to addressing the challenge of transitioning to a sustainable society, lays out the framework for KfW's five sustainability action areas: banking business, bank operation, sustainability management, sustainability communications and employee relations. For more information on KfW's approach to employee relations, see "Management and Employees—Employees."

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***Banking Business***

In its financing activities, KfW focuses on the social and economic megatrends of "climate change and the environment," "globalization," "social change," as well as "digitalization and innovation." Due to the particular importance of the "climate change and the environment" megatrend, KfW has been aiming to maintain an environmental ratio of at least 38% for its new commitments since 2020 as part of its strategic management system. In 2025, the environmental ratio, adjusted for loan facilities related to the energy crisis, was 51% (compared to 44% in 2024). KfW's environmental ratio reflects the percentage of KfW's loan commitments for activities in the fields of climate protection (such as renewable energy, energy-efficient projects, sustainable mobility or climate change adaptation) and the protection of resources and environment (such as waste avoidance, wastewater treatment, air pollution control or noise protection) in relation to KfW's overall new loan commitments for a certain period. To qualify for the calculation of the environmental ratio, the loan commitments taken into account also have to fulfill certain minimum requirements, for example, in terms of CO<sub>2</sub> or energy reductions to be achieved by the projects which are financed with these commitments. KfW's business faced increased loan demand in 2025. Almost every business unit surpassed its target in terms of the adjusted environmental ratio. This balancing effect was mainly driven by a higher number of environmental-related commitments. As a result, the overall KfW ratio increased compared to the level of 2024, surpassing the strategic benchmark of at least 38%. In addition, KfW is committed to contributing to the achievement of each of the 17 SDGs, which are part of the United Nations' Agenda 2030 for Sustainable Development, under its promotional and financing mandate. To create transparency, KfW has developed a group-wide reporting method by mapping new commitments to the SDGs. While new commitments in 2025 contributed to all 17 SDGs, the most significant contributions were made to SDG 7 "Affordable and Clean Energy", SDG 13 "Climate Action" and SDG 8 "Decent Work and Economic Growth."

In terms of customers, important target groups for KfW's activities include Germany's small and medium-sized enterprises, private households, municipalities, developing countries, as well as export and project finance borrowers. KfW takes ecological and social factors into account in every financing decision based on specific sustainability guidelines, which are in place for all its business sectors. In the case of promotional and project financing in developing countries and emerging economies, as well as in all export and project finance activities around the world, KfW regularly applies internationally recognized environmental and social standards (Environmental and Social Impact Appraisal). KfW refuses to fund projects that could conceivably cause unacceptable environmental or social harm, and the group-wide Exclusion List of KfW Group applies to all new financing and promotional activities. In 2021, KfW introduced science-based sector guidelines in accordance with the targets of the Paris Climate Agreement as an additional element to steer KfW's new financing activities in particularly greenhouse-gas-intensive sectors. Initially, these Paris-compatible sector guidelines were aligned with the 1.65°C climate target. In 2022, KfW revised the sector guidelines to align with the 1.5°C climate target with the aim of providing even more targeted support for the transformation process towards greenhouse gas neutrality. The revised sector guidelines covering the sectors automotive, iron and steel production, building, power generation, aviation and shipping were implemented at the beginning of 2023. In December 2023, KfW introduced an additional sector guideline for the oil and gas sector.

Sustainability also plays an important role in KfW's various capital market activities, be it in its role as a green bond issuer or in connection with the sustainable management of its liquidity portfolio. For more information, see "Business—Financial Markets."

KfW is conscious of the fact that environmental and climate risks, as well as risks arising from poor governance and insufficient social considerations, can have a significant impact on its risk positions, as well as on economic and financial systems in general. As a consequence, KfW strives to continuously improve the assessment of its risk positions with a view to gaining a clear picture of the significance of environmental, climate, governance and social aspects as risk drivers. To this end, KfW has over recent years improved and implemented several risk instruments relating to the identification, assessment, steering and reporting of environmental, social and governance ("ESG") risks. In line with European and Germany regulatory requirements, KfW will further develop these instruments in the coming years.

The Combined Non-financial Report in accordance with the German Commercial Code (*Handelsgesetzbuch*) for KfW and KfW Group for the financial year 2025, to be published in April 2026, was prepared in accordance with the European Sustainability Reporting Standards (ESRS, Commission Delegated Regulation (EU) 2023/2772, as amended), with the sole formal exemption of the publication in the combined management report (ESRS 1.110). Using the ESRS as the main framework for the preparation is voluntary for KfW Group for 2025 due to the delayed transposition of the Corporate Sustainability Reporting Directive (CSRD, Directive (EU) 2022/2464, as amended) into German law.

***Banking Operations***

The regulatory framework applicable to KfW's activities explicitly includes compliance with legal rules and regulations relating to environmental, social and economic matters, as well as the prevention of money laundering, terrorist financing, corruption, fraud, breaches of data protection, insider trading and embargo provisions. In addition, as a public law institution, KfW adheres to the principles of the Federal Government's Public Corporate Governance Code. Furthermore, KfW is a corporate member of Transparency International and DEG represents KfW Group in its capacity as a supporting member of the Extractive Industries Transparency Initiative. While adverse environmental impacts caused by KfW's banking operations are limited, KfW strives to reduce the ecological footprint of its banking operations and addresses the remaining greenhouse gas emissions of KfW Group by purchasing high-value Clean Development Mechanism (CDM) credits on the market and discontinuing them for perpetuity. Among other matters, KfW's contract conditions require that suppliers and potential subcontractors comply with the prohibition of child and forced labor and afford protection against inhumane working conditions. Within the scope of possibilities provided by public procurement law, KfW includes social, ecological and innovative aspects in its Europe-wide tenders.

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***Sustainability Management System and Sustainability Communications***

KfW's sustainability management system establishes responsibilities and procedures to further develop sustainability matters within KfW Group. Overall responsibility for the group's sustainability strategy and communication rests with KfW's Chief Executive Officer who is supported by KfW's Chief Sustainability Officer and sustainability officers and managers at the business sector, central unit and site levels. Specific sustainability guidelines for the business sectors and relevant central units set out detailed rules.

To ensure continuous progress of the group-wide sustainability commitment, beginning in 2023, KfW's strategic objectives have included as one of its key targets its ranking among the top three development and promotional banks' ESG Ratings within a peer group, which comprises the top 10 rated development and promotional banks across the peer groups of each of three main ESG Rating agencies.

KfW regularly interacts openly with its stakeholders about aspects of its business activity related to sustainability with a view to refining its own sustainability goals and enabling stakeholders to address relevant topics. In this context, KfW's sustainability reporting, which also fulfills statutory requirements, and KfW's Sustainability Portal are important communication channels.

**Financial Statements and Auditors** 

The consolidated financial statements of KfW included in Exhibit (e) to this annual report have been prepared in accordance with IFRS Accounting Standards and the additional requirements of German commercial law pursuant to § 315e (1) of the German Commercial Code (*Handelsgesetzbuch*) and supplementary provisions of the KfW Law. IFRS Accounting Standards differ in certain significant respects from accounting principles generally accepted and financial reporting practices followed in the United States ("U.S. GAAP"), and, as a result, KfW's consolidated financial statements included in Exhibit (e) to this annual report may differ substantially from financial statements prepared in accordance with U.S. GAAP.

Pursuant to the KfW Law, KfW's unconsolidated annual financial statements as well as its consolidated financial statements are examined by a *Wirtschaftsprüfer* (Certified Public Accountant) who is appointed by the Federal Minister of Finance at the proposal of the Board of Supervisory Directors in consultation with the Federal Court of Auditors (*Bundesrechnungshof*). KfW's external auditor for the fiscal year ended December 31, 2025 is Deloitte GmbH Wirtschaftsprüfungsgesellschaft ("Deloitte").

The annual audit is conducted in accordance with German Generally Accepted Auditing Standards.

The auditor's report of Deloitte for the fiscal year ended December 31, 2025, dated March 3, 2026, refers to a combined management report (*zusammengefasster Lagebericht*). The examination of, and the auditor's report upon, this combined management report are required under German generally accepted accounting principles. This examination was not made in accordance with U.S. generally accepted auditing standards ("U.S. GAAP") or U.S. attestation standards. Therefore, Deloitte does not provide any opinion on such examination, on the combined management report or on the financial statements included in Exhibit (e) to this annual report in accordance with U.S. GAAP or U.S. attestation standards. A reprint of the auditor's report can be found starting on page 174 of Exhibit (e) to this annual report.

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**BUSINESS** 

**Introduction** 

KfW conducts its business in the following business sectors:

&nbsp;&nbsp;&nbsp;&nbsp;• SME Bank & Private Clients (*Mittelstandsbank & Private Kunden*);

&nbsp;&nbsp;&nbsp;&nbsp;• Customized Finance & Public Clients (*Individualfinanzierung & Öffentliche Kunden*);

&nbsp;&nbsp;&nbsp;&nbsp;• KfW Capital;

&nbsp;&nbsp;&nbsp;&nbsp;• Export and Project Finance (KfW IPEX-Bank);

&nbsp;&nbsp;&nbsp;&nbsp;• KfW Entwicklungsbank (KfW Development Bank);

&nbsp;&nbsp;&nbsp;&nbsp;• DEG; and

&nbsp;&nbsp;&nbsp;&nbsp;• Financial Markets.

The following table sets forth the relative size of each of the business sectors in terms of commitments for each of the years indicated.

PROMOTIONAL BUSINESS VOLUME BY BUSINESS SECTOR\*

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| | | | |
|:---|:---|:---|:---|
|  | Year ended<br>December 31 | Year ended<br>December 31 | Year to Year |
|  | 2025 | 2024 | % change |
|  | (EUR in millions) | (EUR in millions) | (in %) |
|  SME Bank & Private Clients (*Mittelstandsbank & Private Kunden*) | 49059 | 35816 | 37 |
|  Customized Finance & Public Clients (*Individualfinanzierung & Öffentliche Kunden*) | 12212 | 41570 | -71 |
|  KfW Capital | 748 | 1590 | -53 |
|  Export and Project Finance (KfW IPEX-Bank) | 24181 | 23916 | 1 |
|  KfW Entwicklungsbank (KfW Development Bank) | 9960 | 7839 | 27 |
|  DEG | 2350 | 2470 | -5 |
|  Financial Markets | 0 | 0 | 0 |
|  **Total promotional business volume (1) (2)** | **97961** | **112831** | **-13** |

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\* Amounts in the table may not add up due to rounding differences. 

(1) Total promotional business volume for the full year ended December 31, 2025 has been adjusted for commitments of
EUR 548 million, compared to EUR 369 million for the corresponding period in 2024, made by KfW IPEX-Bank relating to export and project finance and refinanced under certain promotional programs of SME Bank.

(2) Commitments represent the volume of funds committed for loans and other business transactions (with the
exception of global funding facilities and program-based global loans to *Landesförderinstitute*) in the relevant period, including amounts to be disbursed in future periods, and do not include amounts disbursed in the relevant period
pursuant to commitments made in prior periods. In the case of global funding facilities and program-based global loans to the *Landesförderinstitute*, commitments represent the actual volume of funds disbursed in the relevant period.

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The following table shows the relative size of each of the seven business sectors in terms of percentage of commitments outstanding and economic capital required as of December 31, 2025. In general, a lower percentage in economic capital required compared to the percentage of commitments outstanding illustrates a below average risk associated therewith. The percentage of economic capital required of the business sector Financial Markets also includes the economic capital required for treasury activities.

RELATIVE SIZE OF EACH BUSINESS SECTOR

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| | | |
|:---|:---|:---|
|  | As of December 31, 2025 | As of December 31, 2025 |
|  | Commitments<br>outstanding | Economical capital<br>required (1) |
|  | % of total | % of total |
|  SME Bank & Private Clients (*Mittelstandsbank & Private Kunden*) | 48% | 7% |
|  Customized Finance & Public Clients (*Individualfinanzierung & Öffentliche Kunden*) | 17% | 2% |
|  Export and Project Finance (KfW IPEX-Bank) | 16% | 22% |
|  Financial Markets | 10% | 12% |
|  KfW Entwicklungsbank (KfW Development Bank) | 7% | 4% |
|  DEG | 2% | 9% |
|  KfW Capital | 0% | 2% |
|  **Total (in EUR billions)** | **628.9** | **17.5** |

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(1) The balance of economic capital required relates to group functions. The economic capital required has been
calculated based on a solvency level of 99.90%. For more information concerning economic capital required of KfW Group, see "Combined Management Report—Risk report—Risk management approach of KfW Group (overview)—Internal
capital adequacy assessment process—Economic risk-bearing capacity" included in Exhibit (e) 
to this annual report.

**Domestic Promotional Business** 

***General***

To support the economic and policy objectives of the Federal Government, KfW offers a broad range of financing programs in Germany and, to a limited extent, elsewhere in Europe, as well as grants funded from the federal budget for domestic promotional purposes. KfW's main domestic finance activities are conducted by the business sectors SME Bank & Private Clients, Customized Finance & Public Clients, and by KfW Capital. Certain further promotional activities undertaken in connection with KfW's green bond portfolio and ABS portfolio targeting the domestic market are reported under the Financial Markets business sector.

Under the KfW Law, KfW must generally involve banks or other financing institutions when granting financing. Therefore, KfW involves commercial banks in the handling of its loans by extending loans to commercial banks, which, in turn, on-lend the funds to the ultimate borrowers. To a limited extent, however, KfW is allowed to grant financing directly to ultimate borrowers (e.g., for the financing of municipalities). By lending to commercial banks, KfW, in principle, insulates itself from credit exposure to ultimate borrowers and gains the benefit of the commercial banks' knowledge of their customers as well as their administrative and servicing expertise. KfW monitors its exposures to, and the credit standing of, each bank or other financing institution to which it lends. As of December 31, 2025, KfW had extended loans to approximately 140 commercial banks in its domestic business sectors. In 2025, 60% (2024: 60%) of KfW's total interbank exposure (exposure at default) was attributable to KfW's ten largest banking group counterparties. Most of this exposure relates to KfW's on-lending business, while the portion deriving from other business transactions – including derivatives, securities, money market and global loan transactions – is much more limited.

KfW offers two different models for processing KfW loans to commercial banks. KfW's traditional and most important model for handling its lending business is based on individual loan applications by each borrower within the framework of specified loan or mezzanine capital instruments. Under the other model, KfW extends global funding facilities and program-based global loans to *Landesförderinstitute*, as well as non-program-based global loans to selected financial institutions in Germany and Europe.

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*Individual Loans* 

KfW defines detailed formal eligibility requirements for each individual loan that it extends to a commercial bank, as well as for each loan the commercial bank on-lends to the ultimate borrower under each of KfW's lending programs. Borrowers generally do not apply directly to KfW for a loan, but rather may only apply for a KfW loan through a commercial bank. This intermediate bank appraises the financial and business situation of the applicant, takes collateral for the loan and assumes liability for repayment to KfW. KfW loans on-lent by commercial banks are normally collateralized by liens on real property or other assets, or are guaranteed by the Federal Republic or by one of the Länder. The processing of individual loans within KfW's lending programs is characterized by two formally separate loan approvals – first by the intermediate bank and then by KfW. KfW's loan approval, however, in most cases depends solely on a review of the individual loan application in order to assess compliance with the requirements defined for each respective lending program. In recent years, KfW has modernized its application and approval process for loans with the aim of attaining a more efficient, automated and accelerated process. For this purpose, KfW has developed a digital online platform for its standardized loan programs. The online platform provides immediate feedback as to KfW's approval of loans in the form of electronic confirmations for most applications, and electronic confirmations after manual processing by KfW for more complex products (for instance, environmental programs for SMEs, municipal enterprises, businesses, and non-profit organizations). Since the beginning of 2020, all of KfW's standardized domestic, commercial and non-direct municipal products are offered exclusively via the online platform. All intermediate banks have access to the online platform and use it for their application processes.

KfW applies either a fixed-rate pricing model or a risk-adjusted pricing model to the loans it grants. Under the fixed-rate pricing model, the commercial banks to which KfW lends are permitted to on-lend these funds at fixed spreads over the applicable interest rate payable to KfW. This fixed-rate pricing model is applied to housing investment and some lending programs for start-up financing. It is also applied to education lending programs. Under the risk-adjusted pricing model, KfW establishes pricing categories based on a combination of the borrower's creditworthiness and the collateral securing the loan. Under each lending program, KfW sets maximum interest rates for each pricing category. The on-lending banks assess the risk profile of the ultimate borrower and the collateral securing the loan to determine the applicable pricing category for each loan and the applicable maximum interest rate for the pricing category. KfW's role in the pricing process is limited to verifying that banks derive the appropriate maximum interest rate from the ultimate borrower's creditworthiness and the collateral provided.

Under KfW's traditional SME lending programs, the on-lending banks are liable to KfW and bear the risk of customer default as described above. In recent years, KfW has constantly been reworking and renewing its SME financing programs to increase its support for SMEs. Under some of those lending programs, to which the risk-adjusted pricing model applies, KfW offers the option of a partial exemption from liability to on-lending banks. If the on-lending bank applies for an exemption from liability, KfW bears the risk not retained by the bank and the risk margin is shared pro rata between KfW and the bank. The risk-adjusted pricing model applies to most of SME Bank & Private Clients lending programs. In addition, mezzanine capital offered by SME Bank & Private Clients and its special programs for investments by micro-enterprises are designed so that KfW assumes direct exposure to the credit risk of the ultimate borrowers, which in turn is covered or compensated in different ways: by means of risk premiums included in the interest rate charged to the ultimate borrowers, or by means of guarantees from the Federal Government.

*Global Loans and Global Funding Facilities* 

Global loans and global funding facilities differ from KfW's individual loans primarily in terms of simplified processing, the lack of a requirement for formal loan approval by KfW with respect to each individual ultimate borrower and, in general, a higher degree of flexibility for the on-lending *Landesförderinstitute* and selected financial institutions. KfW expects the receiving institutions to on-lend funds within a reasonable period of time. In contrast to KfW's individual loans, global loans and global funding facilities offer greater loan-structure flexibility. As a result, these instruments, when compared with KfW's traditional lending programs, carry lower administrative costs for both KfW and the on-lending institutions. Accordingly, ultimate borrowers generally benefit from favorable interest rates.

KfW offers different kinds of global loans and global funding facilities: program-based global loans and global funding facilities to *Landesförderinstitute* and non-program-based global loans to selected financial institutions in Germany and Europe. Most *Landesförderinstitute* are independent public law institutions and benefit from explicit statutory guarantees by the respective Land. Each *Landesförderinstitut* is responsible for promotional matters within its federal state.

*Landesförderinstitute* use KfW's program-based global loans to finance specified investments relating to SMEs, housing projects and municipal infrastructure projects in their respective Land within the framework of cooperative loan programs of the respective *Landesförderinstitut* and KfW. The conditions of each cooperative loan program are required to comply with the conditions of the relevant KfW program. The funds to *Landesförderinstitute* are generally extended in the form of lump sums, which are then broken down and granted to ultimate borrowers as individual loans.

Moreover, KfW extends global funding facilities exclusively to *Landesförderinstitute* for their own promotional funding purposes, thus offering flexibility with respect to the use of funds extended in their promotional business without a direct link to any of KfW's lending programs.

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In 2023 KfW launched a new type of global loans to *Landesförderinstitute,* the RegioInnoGrowth ("RIG") loans. These loans, which are part of the Future Fund (*Zukunftsfonds*)/ERP, are intended to provide equity and equity-like capital to start-ups and growth-oriented SMEs with innovative business models.

KfW also extends non-program-based global loans to selected financial institutions in Germany and elsewhere in Europe, which these institutions on-lend as individual loans and leases to finance SMEs, housing projects and energy efficiency projects. In 2023, KfW began to extend global loans which are designed to promote SME-leasing investments in sustainable and energy efficiency projects.

***Germany Fund***

In December 2025, the Federal Government and KfW initiated the Germany Fund (*Deutschlandfonds*). The Germany Fund was created to establish a comprehensive framework designed to facilitate large-scale investments by private and municipal enterprises across Germany. To support this initiative, the federal government is providing approximately EUR 30 billion in public funds and guarantees. This public capital aims to catalyze total investments of around EUR 130 billion in key future sectors of the German economy.

The Germany Fund focuses on driving private investment, primarily in industry and small and medium-sized enterprises, venture capital and energy infrastructure. Key activities include significant future investments in new technologies and production facilities, the expansion of renewable energy sources, heating networks, electricity grids, as well as the extraction of raw materials. The fund is, moreover, tasked with supporting innovative technologies in deep tech, artificial intelligence and biotechnology and with supporting the development of solutions to enhance national defense capabilities.

The financing opportunities offered by the Germany Fund are accessible to industrial firms, medium-sized businesses, start-ups, growth-stage companies, private and municipal energy providers and enterprises within the defense and raw materials sectors. Rather than functioning as a single investment fund, the Germany Fund operates as an umbrella structure. This structure encompasses various tailored programs designed to meet the diverse needs of target groups. For more information, see "KfW Capital".

***KfW Measures to Mitigate the Economic Impact in Germany of Russia's Invasion of Ukraine***

While KfW's direct exposures in Ukraine and Russia are limited and tightly managed, developments related to Russia's invasion of Ukraine have affected KfW's business and earnings position. For information on the impact of Russia's invasion of Ukraine on KfW's net assets, financial and earnings position, see "Combined Management Report—Economic Report" in Exhibit (e) to this annual report.

*Special Federal Mandates by the Federal Government* 

Against the background of Russia's invasion of Ukraine, which led to further increases in energy prices and highlighted Germany's dependency on energy imports from Russia, the Federal Government requested that KfW engage in a number of activities under Special Federal Mandates with full protection of KfW. These activities aim to stabilize and secure the energy supply in Germany, strengthen the resilience of Germany's economy and are thus in the public interest as required by the KfW Law. These activities are being carried out at the Federal Republic's economic risk.

KfW's activities under Special Federal Mandates are of an unplanned nature and do not change KfW's consistent strategic focus on sustainability targets in its banking business. They must therefore be clearly distinguished from KfW's promotional activities as a digital transformation and promotional bank of the Federal Government and the Länder. As of December 31, 2025, these activities, which were mainly conducted in 2022, in particular comprised support measures for systemically important companies in the energy sector that were significantly impacted by the supply reductions and significantly higher gas and electricity prices resulting from Russia's invasion of Ukraine. Debt financing has been committed for gas replacement purchases, to cover short-term liquidity requirements within the scope of "margining" (i.e., the provision of collateral that is mandatory when trading in energy) and to finance the procurement of natural gas for the fulfilment of certain statutorily required levels of natural gas reserves in natural gas storage facilities throughout Germany. As of December 31, 2024, these activities by KfW had led to commitments of EUR 8.5 billion and disbursements to EUR 4.6 billion. As of December 31, 2025, commitments were EUR 0 million, and disbursements declined to EUR 850 million. KfW has also been mandated to engage in equity financing, see "Strategic Shareholdings—KfW's Shareholdings Pursuant to Special Federal Mandates of the Federal Government—German LNG Terminal GmbH" below.

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Furthermore, at the end of 2022, the Federal Government mandated KfW to act as paying agent in connection with compensatory payments to utility companies for loss of revenues owed to such companies by the Federal Government in connection with government support measures aimed at reducing the burden of high energy costs for end consumers of natural gas and district heating. KfW's role in making the compensatory payments is strictly limited to the payments' disbursement, with the Federal Government providing KfW with the funds necessary to make such payments in advance. Commitments in this context amounted to EUR 0.7 billion in 2024 and EUR 1.1 billion in 2025.

In the aggregate, activities under Special Federal Mandates due to Russia's invasion of Ukraine have led to commitments in an aggregate amount of EUR 1.1 billion in 2025 (EUR 9.2 billion in 2024).

Against this background, in November 2022, the German Economic Stabilization Fund (*Wirtschaftsstabilisierungsfonds – WSF*) was authorized to provide loans to KfW to cover KfW's refinancing needs stemming from its support of companies in the energy sector under Special Federal Mandates with unallocated funds from the WSF's credit authorization of up to EUR 100 billion, which was granted to KfW in March 2020 in the context of the COVID-19 pandemic with a view to refinancing KfW's commitments under the KfW Special Program. In addition, the WSF was authorized to provide financing to KfW under a EUR 200 billion credit authorization, which it has been granted to cover funding requirements in connection with a EUR 200 billion protective shield announced by the Federal Government in September 2022, to the extent that KfW is mandated by the Federal Government in connection with the protective shield. Refinancing through the WSF in 2025 totaled EUR 6.9 billion, of which EUR 4.9 billion were related to the KfW Special Program and EUR 2.0 billion were related to the support of companies in the energy sector. The WSF is administered by the Federal Finance Agency (*Bundesfinanzagentur*) and its refinancing is ensured by the Federal Finance Agency, as part of the Federal Government's established money and capital market approach to financing the Federal Budget, and the Federal Government's special funds.

Depending on further developments with respect to Russia's invasion of Ukraine, the Federal Government may in principle request KfW to engage in further activities under Special Federal Mandates at any time.

**SME Bank & Private Clients** 

KfW's SME Bank & Private Clients business sector supports SMEs, large-scale enterprises, business founders, start-ups and self-employed professionals, and offers financing for various purposes to companies in different stages of development. Additionally, this business sector extends housing-related loans and grants as well as financing for education to private individuals. Financing is provided primarily by means of loan programs (2025: EUR 43.2 billion; 2024: EUR 32.4 billion), mezzanine programs (2025: EUR 119 million; 2024: EUR 45 million) and grant-based programs (2025: EUR 5.8 billion; 2024: EUR 3.4 billion).

In 2025, SME Bank & Private Clients committed financing to improve social living conditions and to support the German economy in an amount of EUR 49.1 billion (2024: EUR 35.8 billion). The following table shows commitments by fields of promotional activity for each of the years indicated.

SME BANK & PRIVATE CLIENTS COMMITMENTS\*

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| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year to Year |
|  | 2025 | 2024 | % change |
|  | (EUR in billions) | (EUR in billions) | (in %) |
|  **SME Bank** | **23.5** | **13.4** | ***75*** |
| &nbsp;&nbsp;&nbsp;&nbsp; Start-up financing and general investment | 7.0 | 6.5 | *8* |
| &nbsp;&nbsp;&nbsp;&nbsp; Innovation | 2.7 | 1.5 | *80* |
| &nbsp;&nbsp;&nbsp;&nbsp; Environmental investment | 13.8 | 5.4 | *>100* |
|  **Private Clients** | **25.5** | **22.4** | *14* |
| &nbsp;&nbsp;&nbsp;&nbsp; Housing investment programs | 6.2 | 6.4 | *-3* |
| &nbsp;&nbsp;&nbsp;&nbsp; Education programs | 1.6 | 1.6 | *0* |
| &nbsp;&nbsp;&nbsp;&nbsp; Environmental investment | 17.7 | 14.4 | *23* |
|  **Total commitments (1)** | **49.1** | **35.8** | ***37*** |

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\* Amounts in the table may not add up due to rounding differences. 

(1) Commitments represent the volume of funds committed for loans and other business transactions (with the
exception of program-based global loans to *Landesförderinstitute*) in the relevant year, including amounts to be disbursed in future years, and do not include amounts disbursed in the relevant year pursuant to commitments made in prior
years. In the case of program-based global loans to the *Landesförderinstitute*, commitments represent the actual volume of funds disbursed in the relevant period.

The commitment volume in SME Bank in 2025 increased significantly compared to 2024. This development was mainly due to much higher demand for renewable energy and energy efficiency/CO<sub>2</sub> reduction loans.

In 2025, commitments in Environmental investment for Private Clients increased by 23% compared to 2024.

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***SME Bank***

SME Bank primarily offers loan programs. Under some loan programs, SME Bank offers a partial exemption from liability to on-lending banks. If an on-lending bank applies for an exemption from liability, KfW bears the risk not retained by the bank and the risk margin is shared pro rata between KfW and the bank. As KfW assumes part of the credit risk of the loan, it reserves the right to review and, if necessary, to revise the on-lending bank's assessment of the borrower's creditworthiness by applying KfW's own rating standards. However, KfW strives to follow the assessment of the on-lending bank whenever possible.

From time to time SME Bank also offers mezzanine capital products. These products take the form of unsecured subordinated loans, which contain equity-like elements, combining characteristics of debt and equity capital. In these financings, on-lending banks are not liable to SME Bank for the subordinated loans. The interest rate of these loans takes into account the prevailing rates in the capital markets as well as the borrower's credit standing and collateral securing the loans. The borrower's creditworthiness is first assessed by the on-lending bank. As it does when offering partial exemptions from liability, KfW reserves the right to review and, if necessary, revise this assessment. The only mezzanine product that SME Bank offered during the 2025 fiscal year – ERP Mezzanine for Innovation – was terminated on June 30, 2025 due to a lack of market demand.

*Start-up Financing and General Investment Programs* 

SME Bank provides start-up financing and financial support for general investments for a wide range of purposes, such as investments in property and buildings, in plants or in machinery and equipment. In 2025, commitments in this field amounted to EUR 7.0 billion compared to EUR 6.5 billion in 2024. KfW regards this result as satisfactory in view of the moderate growth of new lending in Germany.

*Innovation Programs* 

SME Bank provides financing for innovations by extending funds in the form of loans and grants for research, development, and digitalization activities. Commitments in the field of innovation financing amounted to EUR 2.7 billion in 2025, an increase by 80% compared to 2024 (EUR 1.5 billion). With effect from July 1, 2025, KfW redesigned the product range for innovation financing. SME Bank replaced the then-existing ERP Promotion for Innovation and Digitalization program with two new loan programs intended to strengthen digitalization and innovation in SMEs: the ERP promotional loan for digitalization and the ERP promotional loan for innovation. Both promotional loan programs, complemented by the ERP promotional grant, offer companies a versatile and low-threshold financing option, which is expected to lead to increased funding for future technologies. The minimum loan amount has been lifted, enabling smaller companies in particular to invest in digitalization and innovation projects.

The levels of funding in both loan programs – the ERP promotional loan for digitalization and the ERP promotional loan for innovation – are based on incentives. They are divided into three stages. Funding levels are tied to the degree of digitization or innovation and the size of the project in relation to the company's annual turnover. With increasing complexity and innovative strength of the project, the interest rate advantages as well as the amount of the supplementary ERP promotional grant increase.

The newly introduced basic promotion stage (stage one) is targeted at smaller companies that want to implement simple digitalization measures or product or process innovations. The LevelUp promotion (stage two) applies to more demanding projects with a higher degree of digitalization or innovation. The HighEnd promotion (stage three) is available for forward-looking projects - for example, in the field of artificial intelligence - or for projects that are large in relation to the company's turnover, making these programs particularly accessible for smaller companies.

The supplementary ERP promotional grant, launched in February 2025, rounds off the promotion offerings. The amount of the grant is 3% of the loan paid out for the LevelUp promotion and 5% for the HighEnd promotion, up to a maximum of EUR 0.2 million.

*Environmental Investment Programs* 

SME Bank finances environmental protection projects, in particular for measures aiming at increasing energy and resource efficiency, reducing greenhouse gas emissions, or intensifying the use of renewable energy sources. Commitments under SME Bank's environmental investment programs more than doubled to EUR 13.8 billion in 2025 compared to EUR 5.4 billion in 2024. Demand for renewable energy programs was strong, amounting to EUR 9.2 billion in 2025 (2024: EUR 7.0 million). A lower EU reference rate enabled KfW to offer interest rates in line with market conditions, which led to a surge in demand and catch-up effects. Moreover, KfW's SME Climate Protection Facility *(KfW Klimaschutzoffensive für Unternehmen)* contributed to the growth in commitments in 2025. Commitments rose to EUR 1.9 billion in 2025 compared to EUR 1.6 billion in 2024.

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***Private Clients***

*Housing Investment Programs* 

Housing investment programs in Private Clients provide funds for the promotion of home ownership and the accessibility to or within existing homes. Some of these programs are promoted by federal grants or subsidized through interest rate reductions paid for by federal funds. Commitments in 2025 slightly decreased to EUR 6.2 billion from EUR 6.4 billion in 2024.

*Education Programs* 

Private Clients supports students and employees in higher education and advanced occupational training with direct loans. Some of these programs are covered by a credit guarantee of the Federal Government and Länder. In 2025, KfW's commitments remained stable at EUR 1.6 billion (2024: EUR 1.6 billion). Commitments under the KfW Student Loan Program amounted to EUR 0.3 billion in 2025 (2024: EUR 0.2 billion).

*Environmental Investment Programs* 

The environmental investment programs increased by 23% to EUR 17.7 billion in 2025 compared to EUR 14.4 billion in 2024. The subsidy for heating system replacement, introduced in 2024, contributed significantly to this growth (2025: EUR 5.5 billion; 2024: EUR 3.1 billion).

In order to reduce the construction backlog, KfW and the Federal Ministry for Housing, Urban Development and Building are resuming a temporary promotion for new buildings that meet the Efficiency House 55 standard ("EH55"). The promotion was integrated into KfW's existing Climate-friendly Construction promotional program. From December 16, 2025 onwards, private and commercial investors with planned projects that have already received a building permit can submit applications for KfW promotional loans through their banks. Interest on these loans is subsidized through federal government funds. Commitments for EH55 projects amounted to EUR 1.3 billion in 2025.

**Customized Finance & Public Clients** 

KfW's Customized Finance & Public Clients (*Individualfinanzierung & Öffentliche Kunden*) business sector provides individual financing solutions for municipal and social infrastructure projects, offers corporate loans and project financing and grants global funding instruments to the *Landesförderinstitute* and other financial institutions.

The following table shows Customized Finance & Public Clients' commitments by field of promotional activity for each of the years indicated:

CUSTOMIZED FINANCE & PUBLIC CLIENTS COMMITMENTS\*

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year to Year |
|  | 2025 | 2024 | % change |
|  | (EUR in millions) | (EUR in millions) | (in %) |
|  Municipal infrastructure programs | 7809 | 4556 | *71* |
|  Corporate loans and project finance | 433 | 33117 | *-99* |
|  Global funding facilities to *Landesförderinstitute* (1) | 2594 | 2811 | *-8* |
|  Program for the refinancing of export loans | 351 | 760 | *-54* |
|  Global loans to selected financial institutions | 1025 | 325 | *>100* |
|  **Total commitments (2)** | **12212** | **41570** | ***-71*** |

---

\* Amounts in the table may not add up due to rounding differences. 

(1) Including global loans to *Landesförderinstitute* to support start-ups and small enterprises through
RIG loans.

(2) Commitments represent the volume of funds committed for loans and other business transactions (with the
exception of global funding facilities and program-based global loans to *Landesförderinstitute*) in the relevant period, including amounts to be disbursed in future periods, and do not include amounts disbursed in the relevant period
pursuant to commitments made in prior periods. In the case of global funding facilities and program-based global loans to the *Landesförderinstitute*, commitments represent the actual volume of funds disbursed in the relevant period.

Commitments in the business sector Customized Finance & Public Clients amounted to EUR 12.2 billion in 2025. This decrease from EUR 41.6 billion in 2024 is particularly attributable to the decline in commitments made in connection with Special Federal Mandates (2025: EUR 1.1 billion; 2024: EUR 33.2 billion). With regard to the core business, commitments increased from EUR 8.4 billion to EUR 11.2 billion.

------

***Municipal Infrastructure Programs***

Customized Finance & Public Clients provides financing for investments in municipal and social infrastructure, either as direct loans to municipalities (i.e., local and municipal authorities and municipal special-purpose associations) or through KfW's ordinary on-lending scheme involving commercial banks. The latter is used for infrastructure investments by private companies that are majority-owned by municipal authorities and social investments made by non-profit organizations. Some of the municipal infrastructure programs are subsidized by federal funds. In total, commitments for municipal infrastructure programs increased significantly to EUR 7.8 billion in 2025 from EUR 4.6 billion in 2024. This increase was largely due to strong demand for IKK (*Investitionskredite für Kommunen*, Investment Loans for Municipalities) (2025: EUR 3.6 billion; 2024: EUR 2.8 billion) and IKU (*Investitionskredite für kommunale und soziale Unternehmen*, Investment Loans for Municipal and Social Enterprises) (2025: EUR 1.0 billion; 2024: EUR 19 million). In 2024, the IKU had been subject to restrictions resulting from the high EU reference rate. Moreover, the loan programs for Sustainable Mobility contributed significantly to growth (2025: EUR 1.4 billion; 2024: EUR 0.3 billion).

***Global Loans and Global Funding Facilities***

The following table shows Customized Finance & Public Clients' commitments\* designated to global loans and global funding facilities for each of the years indicated:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year to Year |
|  | 2025 | 2024 | % change |
|  | (EUR in millions) | (EUR in millions) | (in %) |
|  Global funding facilities to *Landesförderinstitute* (1) | 2594 | 2811 | *-8* |
|  Program-based global loans to *Landesförderinstitute* | 1496 | 1076 | *39* |
|  Non program-based global loans to selected financial institutions in Germany and Europe | 1025 | 325 | *>100* |
|  **Total commitments (2)** | **5115** | **4212** | ***21*** |

---

\* Amounts in the table may not add up due to rounding differences. 

(1) Including global loans to *Landesförderinstitute* to support start-ups and small enterprises through RIG loans.

(2) Commitments represent the volume of funds committed for loans and other business transactions (with the
exception of global funding facilities and program-based global loans to *Landesförderinstitute*) in the relevant period, including amounts to be disbursed in future periods, and do not include amounts disbursed in the relevant period
pursuant to commitments made in prior periods. In the case of global funding facilities and program-based global loans to the *Landesförderinstitute*, commitments represent the actual volume of funds disbursed in the relevant period.

Customized Finance & Public Clients also grants global loans to selected financial institutions in Germany in order to refinance leasing contracts to SMEs, as well as to selected financial institutions in Europe in order to cooperate in the field of European SME financing. These financial institutions in turn use the proceeds of the global loans to extend individual loans and leases to SMEs. In 2025, non program-based global loans to selected financial institutions in Germany and Europe increased to EUR 1.0 billion compared to EUR 325 million in 2024. This amount was fully attributable to the refinancing of leasing contracts.

The decrease in Global Funding Facilities to *Landesförderinstitute* was due to lower refinancing demands by *Landesförderinstitute.*

***Program for the Refinancing of Export Loans***

Customized Finance & Public Clients offers commercial banks long-term refinancing of export loans covered by an official export credit guarantee of the Federal Government referred to as "Hermes Cover." These guarantees are managed by Euler Hermes Aktiengesellschaft ("HERMES") on behalf and for the account of the Federal Government. For more information on HERMES, see "Export and Project Finance (KfW IPEX-Bank)—Business." In 2025, KfW made commitments of EUR 0.4 billion (2024: EUR 0.8 billion) under this program.

***Corporate Loans and Project Finance***

Customized Finance & Public Clients provides corporate loans, project financing and some equity financing. In 2025, KfW's commitments amounted to EUR 433 million. In 2024, excluding commitments of EUR 32.5 billion under Special Federal Mandates - EUR 24 billion of which were in support of the development of a national hydrogen core network and EUR 8.5 billion of which were in connection with the support of companies in the energy sector - KfW's commitments in corporate loans and project financing totaled EUR 617 million.

------

**KfW Capital** 

KfW Capital, KfW's venture capital subsidiary, was incorporated as a legally independent entity on August 31, 2018. KfW Capital's general partner, KfW Capital Verwaltungs GmbH, is wholly-owned by KfW Capital and was incorporated on August 9, 2018. KfW acts as the limited partner and ultimately is the sole owner of KfW Capital. In the course of 2021, KfW Capital obtained a license as a Class 2 investment firm, i.e., a medium-sized investment firm (*Mittleres Wertpapierinstitut*) pursuant to the German Securities Institution Act (*Wertpapierinstitutsgesetz*, WpIG), the German law based on the EU Investment Firm Directive 2019/2034 (IFD) and Investment Firm Regulation 2019/2033 (IFR). As a medium-sized investment firm, KfW Capital is subject to this specific regulatory regime.

The original business objective of KfW Capital was to invest in German and European venture capital and venture debt funds with the aim of improving access to capital for innovative technology-oriented growth companies in Germany through professionally managed funds with a minimum fund size of EUR 50 million. Since 2021, KfW Capital has also been mandated on behalf of the Federal Government to promote future technologies through the Future Fund (*Zukunftsfonds*). Under the Future Fund, KfW Capital invests its own funds at its own risk ("Future Fund KfW Capital") as well as government funds on a fiduciary basis ("Future Fund Federal Republic"). Furthermore, KfW Capital invests government funds from the Future Fund (*Zukunftsfonds*) in funds with fund sizes below EUR 50 million under the Emerging Manager Facility as well as in funds with fund sizes below and above EUR 50 million under the Impact Facility. Since the launch of the Germany Fund (*Deutschlandfonds*) in December 2025, programs under the Future Fund have been marketed as part of the Germany Fund. As one of the first initiatives of the Germany Fund, in December 2025, KfW Capital initiated the co-investment program Scale-up Direct. Under this program, KfW Capital invests (through a Special Purpose Vehicle) in companies utilizing a funding mix of own funds, the ERP Special Fund and government funds from the Future Fund in a fixed matching ratio of 15:15:70. Via Scale-up Direct, KfW Capital can co-invest into single companies together with its General Partner base, with maximum investments of up to EUR 50 million or 25% of a company's capital and voting rights. For the coming years, the targeted average investment volume of KfW Capital's own funds is around EUR 400 million per year. KfW Capital intends to invest up to a maximum of EUR 75 million into a fund's capital and to acquire a maximum of 19.99% of a fund's capital and voting rights (under the Emerging Manager Facility, the ERP/*Zukunftsfonds* Growth Facility and the Impact Facility, KfW Capital can acquire a maximum of 25% of a fund's capital and voting rights).

Commitments related to KfW Capital decreased to EUR 748 million in 2025, compared to EUR 1.6 billion in 2024. The higher figure in 2024 was primarily due to one-time investments made by KfW Capital on a fiduciary basis (Future Fund Federal Republic) in HTGF Opportunity as well as the Deep Tech Climate Fund in that year. Apart from the fiduciary investments under the Future Fund Federal Republic program, commitments of KfW Capital in 2025 mainly reflected investments of EUR 204 million under the ERP/*Zukunftsfonds* Growth Facility, EUR 2.2 million in own funds under Scale-up Direct (both Future Fund KfW Capital) and EUR 178 million via the ERP Venture Capital Fund investment program. Investments under the Future Fund program of the Federal Republic are guaranteed by the Federal Republic and funding for these programs is refinanced by KfW.

The following table shows the commitments of KfW Capital for each of the years indicated:

KFW CAPITAL COMMITMENTS\*

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year to Year | Year to Year |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% change | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% change |  |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (in %) | (in %) |  |
|  High-Tech Start-up Fund |  | 1 |  | 1 |  | 0 |  |
|  ERP Venture Capital Fund Investments |  | 178 |  | 202 |  | -12 |  |
|  Future Fund KfW Capital |  | 206 |  | 179 |  | 15 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which ERP/Zukunftsfonds Growth Facility* | | *204* | | *119* | | *72* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which Scale-up Direct KfW Capital* | | *2* | | *0* | | *>100* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which Green Transition Facility* | | *0* | | *60* | | *-100* | |
|  Future Fund Federal Republic |  | 363 |  | 1208 |  | -70 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which GFF EIF Growth Facility* | | *266* | | *233* | | *14* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which HTGF Opportunity* | | *0* | | *500* | | *-100* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which Deep Tech Climate Fonds* | | *0* | | *430* | | *-100* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which Emerging Manager Facility* | | *23* | | *7* | | *>100* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which ERP/Zukunftsfonds Growth Facility (Opportunity Funds)* | | *26* | | *39* | | *-33* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which Scale-up Direct Future Fund* | | *10* | | *0* | | *100* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which Scale-up Direct ERP-Special Fund* | | *2* | | *0* | | *>100* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which Impact Funds* | | *35* | | *0* | | *>100* | |
|  **Total commitments (1)** |  | **748** |  | **1590** |  | **-53** |  |

---

\* Amounts in the table may not add up due to rounding differences. 

(1) Commitments represent the volume of funds committed for loans and other business transactions in the relevant
year, including amounts to be disbursed in future years, and do not include amounts disbursed in the relevant year pursuant to commitments made in prior years.

------

**Export and Project Finance (KfW IPEX-Bank)** 

***Corporate Background***

KfW IPEX-Bank conducts export and project finance activities which the European Commission deemed to fall outside the scope of KfW's promotional activities directly and on its own behalf, while it conducts the promotional export and project finance activities in its own name on behalf of KfW on a trust basis. KfW provides funding for KfW IPEX-Bank at market rates based on the ratings assigned to KfW IPEX-Bank by international rating agencies. As of January 1, 2008, and in accordance with the understanding reached between the European Commission and the Federal Republic, KfW IPEX-Bank commenced operations as a legally independent entity wholly-owned by KfW. For more information, see "General—Relationship with the Federal Republic—Understanding with the European Commission."

Total assets of KfW IPEX-Bank (IFRS Accounting Standards, before consolidation) amounted to EUR 40.5 billion as of December 31, 2025 (December 31, 2024: EUR 38.3 billion). Total outstanding loans and guarantees (including promotional activities) for KfW's business sector Export and Project Finance amounted to EUR 66.4 billion as of December 31, 2025 (December 31, 2024: EUR 65.6 billion). KfW IPEX-Bank is headquartered in Frankfurt am Main, Germany, and maintains a branch office in London, United Kingdom, a subsidiary in Singapore and representative offices in eight locations outside Germany. As of December 31, 2025, KfW IPEX-Bank employed 997 persons, excluding managing directors but including temporary personnel (December 31, 2024: 1,002).

In 2022, KfW IPEX-Bank Asia Ltd., a wholly-owned subsidiary of KfW IPEX-Bank, commenced its business activities in Singapore with a share capital of SGD 16.5 million under a merchant bank license issued by the Monetary Authority of Singapore (MAS). IPEX Asia Ltd. is fully consolidated under the existing profit transfer agreement between KfW IPEX-Bank and KfW Beteiligungsholding GmbH, a wholly-owned subsidiary of KfW, described below.

In accordance with the understanding with the European Commission, KfW IPEX-Bank has obtained a banking license and is subject to the KWG and the corporate tax regime. KfW IPEX-Bank is approved as an IRBA bank under the Basel II rules by the relevant German supervisory authorities – BaFin and the Deutsche Bundesbank. From the beginning of 2025, KfW IPEX-Bank has qualified as a significant credit institution and, as a result, has been under direct supervision by the ECB. For additional information on KfW IPEX-Bank and the SSM, see "KfW—General—Supervision and Regulation—Regulation—Supervisory Structure and Enforcement Powers." For more information on the SSM, see "Federal Republic of Germany—Monetary and Financial System—Financial System— European Financial System—European System of Financial Supervision and European Banking Union."

KfW IPEX-Bank (controlled company; including its fully consolidated subsidiary IPEX Asia Ltd.) signed a profit transfer agreement with KfW Beteiligungsholding GmbH (controlling company) in order to form a corporate income tax (CIT) fiscal unity. Under this profit transfer agreement, KfW IPEX-Bank is required to transfer its entire annual profit under applicable German commercial law to KfW Beteiligungsholding GmbH effective from the end of the fiscal year ended December 31, 2016.

***Business***

KfW IPEX-Bank focuses on supporting the internationalization and the competitiveness of internationally active German and European companies and offers project, export and trade financing. It provides medium and long-term investment and export financing in the form of amortizing loans, guarantees or leasing financing as well as project, object and acquisition financing. KfW IPEX-Bank also offers derivative instruments to allow its clients to hedge interest and currency risk and instruments for short-term trade financing, such as participations in letters of credit.

With the consent of the Federal Government, KfW delegated the mandate of the management of the Shipping CIRR Program and the ERP (European Recovery Program) Export Financing Program to KfW IPEX-Bank. Both programs are executed by KfW IPEX-Bank, applying strict ethical walls. The programs offer fixed interest rate loans to buyers based on the CIRR (Commercial Interest Reference Rate), which is a minimum interest rate prescribed by the OECD for officially supported financings in order to ensure competitive neutrality. The Shipping CIRR Program is open to banks financing ships built in German shipyards and offers a refinancing option through KfW. The ERP Export Financing Program supports lending for German exports to emerging and developing countries combined with fixed refinancing through KfW. These loans are supported through the ERP. In the past, lending of CIRR based loans in the ERP Program was provided through KfW IPEX-Bank and via AKA Ausfuhrkredit-Gesellschaft mbH, both as lenders of record.

------

Since January 2017, all banks eligible for buyer credit cover (Hermes cover) may directly apply to the ERP Export Financing Program.

KfW, on behalf of the Federal Ministry for Economic Affairs and Energy , has launched the Africa CIRR export financing program ("Africa CIRR"). The program aims to strengthen economic cooperation with Africa. Specifically, Africa CIRR is designed to support loans to finance large-volume German exports and to promote the economy in African buyer countries. All credit institutions eligible to apply for buyer credit cover from the Federal Republic (so-called Hermes cover) are eligible for the Africa CIRR. The Federal Republic mandated KfW and KfW designated KfW IPEX-Bank to administer the program.

KfW IPEX-Bank's principal customers are German and European companies (and their customers) with international operations and larger medium-sized companies in basic and manufacturing industries as well as in the retail, health, telecommunications, power/renewables, water, shipping, aviation, rail, transport and social infrastructure sectors. KfW IPEX-Bank's business model comprises four future-oriented sectors: (1) the energy sector aiming at the transformation of the energy industry, primarily via wind power, solar energy and hydrogen, as well as water and waste management infrastructure; (2) the mobility sector striving for the transformation of the maritime and aviation industries, as well as climate-friendly mobility and transport; (3) the infrastructure sector supporting the roll-out of digital infrastructure, charging infrastructure, grid-based energy infrastructure, air and sea ports, as well as the construction industry, among others; and (4) the industry & commerce sector for metal and mining, commodity trading, financial institutions, and the automotive industry and retail, among others. In addition, KfW IPEX-Bank will continue to provide structured financing for exports and infrastructure, as well as financing for global climate change mitigation and raw materials supplies in Europe.

Traditionally, the bulk of loans extended by KfW IPEX-Bank has been used for export and project financing to buyers of German or European exports. In recent years, KfW IPEX-Bank has increasingly extended loans to finance direct investments by German enterprises and other corporate purposes linked to the internationalization of German companies. In addition, KfW IPEX-Bank co-finances large-scale infrastructure projects and means of transport (e.g., airplanes and vessels) in the German and European transport sector. KfW IPEX-Bank also provides, as part of its core business, financing for environment and climate protection projects. Finally, KfW IPEX-Bank's loans are also used to secure sources of raw materials for the German and European industry.

KfW IPEX-Bank's loans are generally extended directly to the ultimate borrower, and KfW IPEX-Bank grants a significant portion of these loans at its own risk. KfW IPEX-Bank regularly cooperates with other financial institutions by way of consortia and syndications. In some cases, KfW IPEX-Bank may arrange for commercial banks to assume the risk on portions of loans made by KfW IPEX-Bank through risk-participations, for which KfW IPEX-Bank pays a fee to the bank assuming the risk. KfW IPEX-Bank is eligible to act as on-lending bank under certain of KfW's promotional programs. In 2025, KfW IPEX-Bank refinanced loan commitments for export and project finance under KfW's promotional programs in an amount of EUR 0.5 billion (2024: EUR 0.4 billion).

From time to time, KfW IPEX-Bank also enters into framework loan agreements with non-German banks, which enable such banks to extend loans to their customers for the purpose of importing equipment from German or other European exporters. Because the amounts of individual loans are usually small, the related transaction costs are relatively high. The framework agreements help to reduce these transaction costs.

Loans extended by KfW IPEX-Bank are usually secured by collateral and often benefit from a payment guarantee or other security arrangement. Loans extended to finance direct investments may benefit from an investment guarantee against political risk by the Federal Republic if the host country risk is assessed to be substantial.

A portion of export finance loans extended by KfW IPEX-Bank is guaranteed by the Federal Republic through HERMES, the official German export credit insurer. HERMES insurance covers up to 95% – in some instances even up to 100% – of KfW IPEX-Bank's export and project finance business risk, so that the risk of the portion covered is the equivalent of the Federal Government's risk. HERMES also provides coverage for related deliveries from other, mainly European, countries provided that they do not exceed a certain portion of the total delivery for which an export finance loan was extended. Furthermore, KfW IPEX-Bank's financing frequently benefits from a guarantee by a foreign export credit agency or a government instrumentality in the buyer's country.

For borrowers in other European and OECD countries where the country risk is not considered high, KfW IPEX-Bank has been increasingly extending loans on the basis of ordinary banking collateral (e.g., mortgages on aircraft or ships) without seeking the benefit of HERMES or similar coverage. In addition, even when HERMES coverage is sought, KfW IPEX-Bank often extends loans on which the insured portion is less than 95%. As of December 31, 2025, outstanding loans and guarantees (including promotional activities) outside Germany for KfW's business sector Export and Project Finance amounted to EUR 49.1 billion, of which EUR 6.8 billion, or 14%, were export finance loans which are fully or partly guaranteed by HERMES.

------

***Commitments***

The following table shows commitments in KfW's business sector Export and Project Finance for each of the years indicated:

EXPORT AND PROJECT FINANCE COMMITMENTS\*

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year to Year | Year to Year |  |
|  | 2025 | 2025 | 2025 |  | 2024 | 2024 | 2024 | % change | % change |  |
|  | (EUR in millions) | (in % of total) | (in % of total) |  | (EUR in millions) | (in % of total) | (in % of total) | (in %) | (in %) |  |
|  Commercial business | 19377 | | *80* | | 18098 | | *76* | | *7* | |
|  Promotional business (conducted on behalf of KfW) | 4803 | | *20* | | 5818 | | *24* | | *-17* | |
|  **Total commitments (1)** | **24181** | **** | ***100*** | **** | **23916** | **** | ***100*** | **** | ***1*** | **** |

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\* Amounts in the table may not add up due to rounding differences. 

(1) Commitments represent the volume of funds committed for loans and other business transactions in the relevant
year, including amounts to be disbursed in future years, and do not include amounts disbursed in the relevant year pursuant to commitments made in prior years.

In 2025, total commitments of the Export and Project Finance business sector, at EUR 24.2 billion, remained relatively stable compared to the prior-year level of EUR 23.9 billion. As in 2024, the 2025 figure included commitments under the CIRR scheme for bank refinancing, which is supported by the federal budget. With the consent of the Federal Government, KfW has delegated the mandate for the CIRR scheme for bank refinancing to KfW IPEX-Bank.

Despite ongoing global geopolitical tensions, strong demand for sustainable transformation of businesses and business models, as well as demand for innovative technologies, provided numerous projects for KfW IPEX-Bank's customers. This, in turn, enabled KfW IPEX-Bank to make commitments at levels slightly higher to those of the prior year. All four of KfW IPEX-Bank's sectors contributed to total new commitments.

*Commitments by Sector* 

The following table shows KfW IPEX-Bank's total commitments\* for the years indicated and commitments by sector for 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year to Year | Year to Year |  |
|  | 2025 | 2024 | % change | % change |  |
|  | (EUR in millions) | (EUR in millions) | (in %) | (in %) |  |
|  Mobility | 6748 | 7219 | | *-7* | |
|  Energy | 6691 | 4400 | | *52* | |
|  Industries and Commerce | 5762 | 5698 | | *1* | |
|  Infrastructure | 4854 | 5055 | | *-4* | |
|  CIRR scheme for bank refinancing (Ship + Africa + ERP finance) | 126 | 1543 | | *-92* | |
|  **Total commitments** | **24181** | **23916** | **** | ***1*** | **** |

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\* Amounts in the table may not add up due to rounding differences. 

Transformation and sustainability-linked projects created numerous financing opportunities for KfW IPEX-Bank, e.g., energy transition projects and digital infrastructure innovation projects. Commitments (excluding those under the CIRR scheme for bank refinancing) amounted to EUR 24.1 billion in 2025. The highest commitment volumes were achieved in the Mobility sector with EUR 6.7 billion; in Energy, also with EUR 6.7 billion; in Industry and Commerce with EUR 5.8 billion; and in Infrastructure with EUR 4.9 billion.

Commitments under the CIRR scheme for bank refinancing decreased significantly to EUR 126 million (2024: EUR 1.5 billion).

------

*Commitments by Geographic Area* 

In 2025, KfW IPEX-Bank's commitments were reported for the following three regions: (1) Germany; (2) Europe (excluding Germany, but including Russia and Turkey); and (3) the rest of the world. In 2025, KfW IPEX-Bank's commitments for project and export financing (excluding the CIRR scheme for bank refinancing) within Germany decreased to EUR 6.6 billion from EUR 7.5 billion in 2024. In 2025, commitments in Europe (excluding Germany, but including Russia and Turkey) increased to EUR 9.3 billion from EUR 8.0 billion in 2024. KfW IPEX-Bank's commitments in the rest of the world increased to EUR 8.2 billion in 2025 compared to commitments of EUR 6.9 billion in 2024. Commitments under the CIRR scheme for bank refinancing (2025: EUR 126 million; 2024: EUR 1.5 billion) are trans-regional.

*Commitments by Product* 

The following table shows KfW IPEX-Bank's commitments\* by product for each of the years indicated:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year to Year | Year to Year |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | % change | % change |  |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (in %) | (in %) |  |
|  Corporate transactions (for German or European export companies) |  | 16557 |  | 16565 | | *0* | |
|  *Thereof* |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Loans (term loans and bullet)* | | *10130* | | *9911* | | *2* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Trade finance* | | *1959* | | *1644* | | *19* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Revolving credit facilities for cash drawings* | | *2364* | | *3066* | | *-23* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Guarantees* | | *2104* | | *1721* | | *22* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Lease finance* | | *0* | | *222* | | *—100* | |
|  Project finance (1) |  | 6107 |  | 4555 | | *34* | |
|  Acquisition finance (1) |  | 264 |  | 509 | | *-48* | |
|  Asset finance (1) |  | 1034 |  | 744 | | *39* | |
|  Loans to funds |  | 92 |  | 0 | | *>100* | |
|  CIRR scheme for bank refinancing (ship + ERP + Africa) |  | 126 |  | 1543 | | *-92* | |
|  **Total commitments** |  | **24181** |  | **23916** | **** | ***1*** | **** |

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\* Amounts in the table may not add up due to rounding differences. 

(1) The product categories project finance, asset finance and acquisition finance may also include loans,
guarantees, lease finance or revolving credit facilities that are not attributed to any sub-category under the corporate transactions product category.

***Funding***

The funds for KfW IPEX-Bank's commitments are mainly provided by KfW through borrowings in the capital markets. KfW provides funding to KfW IPEX-Bank's international project and export finance business at market rates based on the ratings assigned to KfW IPEX-Bank by international rating agencies. For those areas of export finance which the European Commission has deemed to fall within the scope of the promotional activities of KfW, funds from the ERP Special Fund may also be used to subsidize interest rates. In 2025, EUR 125 million of loan disbursements were supported by the ERP Special Fund (2024: EUR 16 million).

The terms of export and project finance loans funded in the capital markets are based on the cost of funds to KfW, plus a margin intended to cover the administrative cost of the loan, the credit risk and a return on capital. Because the Federal Republic is a member of the OECD, loans financed with funds from the ERP Special Fund or under the CIRR scheme for the shipping industry are required to comply with OECD regulations, which provide for minimum interest rates and maximum credit periods. Margins on these loans are generally intended to cover all the risks of such loans as well as administrative costs and a return on capital. In addition, KfW IPEX-Bank charges customary banking fees for reserving and providing financing and for processing. Loans denominated in currencies other than euros are hedged through matched funding or other mechanisms.

**KfW Entwicklungsbank (KfW Development Bank)** 

Under the brand name KfW Entwicklungsbank, KfW acts as the Federal Republic's international development bank, extending loans and disbursing grants mainly to foreign public sector borrowers and recipients. In 2025, approximately 28% of these loans and grants were refinanced from federal budget funds provided to KfW. All of KfW's international development activities are made according to instructions from the Federal Government or, in the case of mandates, i.e., grants funded by governmental or supranational entities and distributed using KfW's expertise and channels, from the respective donor. Mandates and all funds from the Federal Government involved in loan commitments and grants do not, by their nature, appear on KfW's consolidated statement of financial position.

KfW extends financial cooperation (*Finanzielle Zusammenarbeit,* "FZ") loans in three ways:

&nbsp;&nbsp;&nbsp;&nbsp;• Traditional Financial Cooperation Loans (*FZ-Standardkredite*),
extended for the account of the Federal Republic;

------

&nbsp;&nbsp;&nbsp;&nbsp;• Financial Cooperation Development Loans (*FZ-Entwicklungskredite*),
in which KfW offers its own funds as an additional source of financing. For these loans, federal budget funds at low interest rates or grant funds are combined with funds from KfW that are refinanced in the capital markets. As of December 31, 2025,
approximately 98% of outstanding commitments refinanced with KfW funds were guaranteed either by a special guarantee facility of the Federal Republic or by export credit agencies. Interest rates and related terms of Financial Cooperation Development
Loans are significantly more favorable to the borrower than market terms and, therefore, meet the requirements for recognition as official development assistance ("ODA"); and

&nbsp;&nbsp;&nbsp;&nbsp;• Financial Cooperation Promotional Loans (*FZ-Förderkredite*),
funded solely through funds raised by KfW in the capital markets. These loans may meet the requirements for recognition as ODA as they offer more favorable terms to the borrower than market terms. As of December 31, 2025, approximately 89% of
outstanding Financial Cooperation Promotional Loans were guaranteed by a special guarantee facility of the Federal Republic.

Generally, interested foreign governments submit applications for financial cooperation to the Federal Government, which then asks KfW to appraise the proposed projects. In the case of Financial Cooperation Promotional Loans, project sponsors may submit their proposals directly to KfW. KfW maintains a staff of economists, engineers and other specialists to assist in the appraisal and development of projects. KfW receives fees from the Federal Republic for loans and grants extended for the account of the Federal Government and Financial Cooperation Development Loans, calculated as a percentage of outstanding loans and grants, as far as they are financed out of the federal budget. Based on KfW's appraisal and its recommendation, the Federal Republic decides whether it will fund a particular project. Upon a favorable decision and upon determination of the terms and conditions of financing, KfW enters into a loan or grant agreement with the recipient country or, if applicable, the individual agency responsible for the project, in which case the obligations under that agreement would then usually be fully guaranteed by the respective recipient country.

Financial cooperation loans and grants are generally disbursed according to the progress of the relevant project, and KfW monitors the utilization of funds to ensure compliance with the provisions of the loan or grant agreement.

The following table shows KfW Entwicklungsbank's commitments for each of the years indicated:

KFW ENTWICKLUNGSBANK COMMITMENTS\*

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year to Year | Year to Year |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% change | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% change |  |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (in %) | (in %) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loan commitments |  | 6701 |  | 4690 | | *43* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which federal funds* | | *222* | | *238* | | *-7* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which KfW's funds refinanced in the capital markets* | | *6479* | | *4452* | | *46* | |
| &nbsp;&nbsp;&nbsp;&nbsp; Grant commitments |  | 2555 |  | 2680 | | *-5* | |
| &nbsp;&nbsp;&nbsp;&nbsp; Mandates |  | 703 |  | 469 | | *50* | |
|  **Total commitments** |  | **9960** |  | **7839** | **** | ***27*** | **** |

---

\* Amounts in the table may not add up due to rounding differences. 

Total commitments of KfW Entwicklungsbank increased by 27% to EUR 10.0 billion in 2025 from EUR 7.8 billion in 2024. The relative share of loan commitments that were refinanced in the capital markets increased to 97% in 2025, from 95% in 2024.

In 2025, Asia accounted for 24% of KfW Entwicklungsbank's commitments (2024: 21%); Sub-Saharan Africa accounted for 22% (2024: 26%); Middle East/North Africa accounted for 17% (2024: 19%); Europe/Caucasus accounted for 21% (2024: 16%); Latin America accounted for 14% (2024: 13%); and trans-regional commitments accounted for 2% (2024: 5%).

------

The following table shows KfW Entwicklungsbank's commitments\* by sector for each of the years indicated and as a percentage of its total commitments:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year ended December 31 | Year to Year | Year to Year |  |
|  | 2025 | 2025 | 2025 |  | 2024 |  |  | % change | % change |  |
|  | (EUR in millions) | (in % of total) | (in % of total) |  | (EUR in millions) | (in % of total) | (in % of total) | (in %) | (in %) |  |
|  Economic infrastructure | 4718 | | *47* | | 2635 | | *34* | | *79* | |
|  Social infrastructure | 3187 | | *32* | | 3836 | | *49* | | *-17* | |
|  Financial sector | 909 | | *9* | | 662 | | *8* | | *37* | |
|  Production sector | 340 | | *3* | | 363 | | *5* | | *-6* | |
|  Others (1) | 805 | | *8* | | 343 | | *4* | | *135* | |
|  **Total commitments** | **9960** | **** | ***100*** | **** | **7839** | **** | ***100*** | **** | ***27*** | **** |

---

\* Amounts in the table may not add up due to rounding differences. 

(1) Consists mainly of commitments made for multi-sector projects and emergency assistance in crisis situations.

**DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** 

DEG, a German limited liability company, is a legally independent entity founded in 1962. DEG is based in Cologne, Germany. In 2001, KfW acquired DEG from the Federal Republic. Since then, KfW has been DEG's sole shareholder and DEG has been fully consolidated in KfW's consolidated financial statements. As of December 31, 2025, DEG maintained 12 representative offices in developing countries or emerging economies. In 2025, DEG employed an average of 760 persons (2024: 753). As of December 31, 2025, DEG's total assets (IFRS Accounting Standards, before consolidation) amounted to EUR 8.9 billion (2024: EUR 9.2 billion).

DEG's activities focus on corporates, project finance, financial institutions and funds investing in Africa, Asia, Latin America, and Central and Eastern Europe. DEG promotes private enterprise structures, thus contributing to sustainable economic growth, lasting improvement in the living conditions of the local population and the global Sustainable Development Goals. To this end, DEG provides long-term financing for private enterprises investing in developing countries. In addition, DEG offers customized consultancy services, for example, in the areas of environmental management, corporate governance, resource efficiency or training and skills.

DEG conducts its activities in accordance with the principles of subsidiarity, thus in cooperation with commercial banks rather than in competition with them. It does not provide subsidized financing, but instead offers financing solely on commercial terms and conditions (apart from smaller state support programs within the framework of the support for German companies in developing and emerging countries). DEG also seeks to mobilize other partners in order to raise additional capital for its clients' investments.

Serving public policy objectives of the Federal Government, DEG has been granted a favorable tax status under which only part of DEG's activities is subject to CIT. DEG does not distribute profits but instead re-channels them into new investments.

DEG's obligations do not benefit from the Guarantee of the Federal Republic or from *Anstaltslast*, and while DEG's indebtedness is reflected in KfW's consolidated statement of financial position, its debt represents obligations of DEG and not of KfW. KfW and DEG have a refinancing agreement in place, pursuant to which KfW acts as sole issuer in the capital markets and provides DEG with mid- and long-term capital market funds according to DEG's capital needs. In addition, internal agreements have been reached concerning the respective fields of business activities, the mutual use of offices abroad, joint public relations activities and joint usage of several information technology services.

The following table shows DEG's commitments for each of the years indicated:

DEG COMMITMENTS\*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31 | Year ended December 31 | Year to Year | Year to Year |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | % change | % change |  |
|  | (EUR in millions) | (EUR in millions) | (in %) | (in %) |  |
|  Loans | 1808 | 1918 | | *-6* | |
|  Equity participations | 316 | 417 | | *-24* | |
|  Mezzanine financing | 226 | 135 | | *67* | |
|  **Total commitments** | **2350** | **2470** | **** | ***-5*** | **** |

---

\* Amounts in the table may not add up due to rounding differences. 

**Financial Markets** 

KfW's Financial Markets business sector comprises the group's treasury activities, including its funding activities and its financial asset management. Furthermore, this business sector manages KfW's asset-backed securities ("ABS") as well as KfW's green bond portfolio, which are all part of KfW's promotional activities, as well as other capital markets-related activities currently consisting of privatization initiatives relating to Deutsche Telekom AG ("Deutsche Telekom") and Deutsche Post AG ("Deutsche Post").

------

***Funding***

KfW's principal sources of funds are the international financial markets and public funds, with the majority of lending in its business sectors being financed from funds raised by KfW in the international financial markets. KfW Group's consolidated balance sheet total assets at December 31, 2025 amounted to EUR 540.7 billion. EUR 486.1 billion, or 89.9% of this amount, was financed through borrowings (i.e., from financial market funds or public funds). In addition, as of December 31, 2025, KfW had EUR 22.6 billion in liabilities held in trust (for which the Federal Government mostly provides the funding and assumes all risks), which do not appear on KfW's consolidated statement of financial position. In line with the focus on mid-term and long-term loans within its loan portfolio resulting from its promotional business, as of December 31, 2025, 81% of KfW's consolidated total borrowings outstanding had remaining maturities of one year or more.

*Financial-Market Funds* 

KfW raises short-term and long-term funds in the international financial markets through the issuance of bonds and notes (including commercial paper) and by incurring promissory note loans (*Schuldscheindarlehen*). Long-term funding with initial maturities of more than one year ("capital-market funding") represents the most important source of funding. Short-term borrowings with initial maturities of less than one year in the form of commercial paper ("money-market funding") are primarily used for purposes of KfW's liquidity management. As of December 31, 2025, the percentage of capital-market funding outstanding out of total financial-market funds outstanding was 89%.

All amounts stated in connection with KfW's capital-market and money-market funding transactions or funding volume are, unless stated otherwise, based on net proceeds to KfW, which are calculated as principal amount less discount and underwriting commissions, if any.

*Capital-Market Funding.* KfW's capital-market funding policy pursues a dual objective: to achieve the most favorable terms possible for funds raised in the capital markets; and to minimize, to the extent practicable, the effects of changes in interest rates and foreign exchange rates mainly through interest rate and currency risk hedging instruments and, to a more limited extent, by matching funding liabilities with loan assets. In order to achieve favorable terms for funds raised, KfW maintains an active presence in all major capital markets and utilizes a broad range of funding instruments in various currencies, covering a wide range of maturities.

KfW's capital-market funding instruments comprise three categories of instruments:

(1) Benchmark bonds issued under KfW's benchmark programs (in euro or U.S. dollar, under KfW's European
medium-term note program or its SEC-registered debt shelf).

(2) Bonds publicly placed outside the benchmark programs.

(3) Bonds sold in "private placements," a term KfW uses in the commercial sense to refer to sales to a
specific investor or a limited number of investors.

With effect from January 1, 2026, bonds in each of the three categories above have included green bonds that otherwise meet the criteria of the relevant category. Green bonds are bonds whose proceeds are linked to investments currently financed by KfW in the project categories Renewable Energy, Green Buildings (formerly Energy Efficiency), Clean Transportation, Biodiversity and Climate Protection Programme for Corporates. Prior to 2026, KfW had classified all green bonds separately in a fourth category. KfW has not applied this change in categorization retrospectively.

In 2025, benchmark bonds accounted for a funding volume of EUR 42.2 billion, or 59%, of KfW's total capital-market funding, while bonds placed publicly outside the benchmark programs accounted for EUR 9.8 billion, or 14%. The volume of bonds sold in private placements and of green bonds amounted to EUR 5.0 billion, or 7%, and EUR 14.0 billion, or 20%, respectively. Total capital-market funding in 2025 amounted to EUR 71.0 billion (2024: EUR 78.1 billion). With respect to refinancing its funding requirements resulting from the KfW Special Program and from its support of companies in the energy sector under Special Federal Mandates, KfW has had access to an additional source of financing through the German Economic Stabilization Fund (*Wirtschaftsstabilisierungsfonds* – WSF). Refinancing through the WSF in 2025 totaled EUR 6.9 billion, of which EUR 4.9 billion related to the KfW Special Program and EUR 2.0 billion related to the support of companies in the energy sector.

KfW expects its volume of long-term funding to be raised in the capital markets in 2026 to be in a range of EUR 75 billion to EUR 80 billion, of which EUR 15 billion is expected to be green bonds.

------

In 2025, KfW conducted three new bond issuances as well as ten re-openings (13 transactions in total in 2025) in an aggregate principal amount of EUR 27 billion under its euro benchmark program. Also in 2025, KfW conducted five new bond issuances in an aggregate principal amount of USD 17 billion under its U.S. dollar benchmark program.

KFW'S BENCHMARK BOND ISSUANCES IN 2025

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| | | | |
|:---|:---|:---|:---|
|  | Aggregate principal<br>amount in billions | Maturity at issuance (in years) | Interest rate<br>in % per annum |
|  KfW U.S. $-Benchmark I/2025 | USD 3 | 5 | 4.625 |
|  KfW U.S. $-Benchmark II/2025 | USD 3 | 3 | 3.875 |
|  KfW U.S. $-Benchmark III/2025 | USD 5 | 5 | 3.750 |
|  KfW U.S. $-Benchmark IV/2025 | USD 3 | 2 | 4.000 |
|  KfW U.S. $-Benchmark V/2025 | USD 3 | 3 | 3.500 |
|  KfW Euro-Benchmark (Dual Tranche I/2025) | EUR 6 | 3 | 2.375 |
|  KfW Euro-Benchmark (Dual Tranche II/2025) | EUR 3 | 10 | 2.750 |
|  KfW Euro-Benchmark V/2025 | EUR 3 | 3 | 2.125 |
|  KfW Euro-Benchmark VI/2025 | EUR 3 | 5 | 2.500 |
|  KfW Euro-Benchmark V/2019 (re-opening) | EUR 1 | 1 | 0.000 |
|  KfW Euro-Benchmark V/2024 (re-opening) | EUR 1 | 2 | 2.750 |
|  KfW Euro-Benchmark IV/2023 (re-opening) | EUR 1 | 2 | 2.875 |
|  KfW Euro-Benchmark II/2024 (re-opening) | EUR 1 | 9 | 2.625 |
|  KfW Euro-Benchmark I/2025 (re-opening) | EUR 1 | 3 | 2.375 |
|  KfW Euro-Benchmark V/2023 (re-opening) | EUR 1 | 3 | 3.125 |
|  KfW Euro-Benchmark IV/2024 (re-opening) | EUR 1 | 4 | 2.625 |
|  KfW Euro-Benchmark V/2025 (re-opening) | EUR 1 | 3 | 2.125 |
|  KfW Euro-Benchmark VI/2022 (re-opening) | EUR 1 | 4 | 2.875 |
|  KfW Euro-Benchmark II/2025 (re-opening) | EUR 3 | 10 | 2.750 |

---

In 2025, KfW's total new capital-market funding was raised in ten different currencies and 164 separate capital markets transactions. KfW's core currencies are the euro and the U.S. dollar, which together accounted for 83% of KfW's total new capital-market funding in 2025 (2024: 86%). The percentage of new funds raised in euros, which continues to be KfW's most significant funding currency, remained stable at 62% in 2025 (2024: 62%). The percentage of new funds raised in U.S. dollars decreased to 22% in 2025 (2024: 25%). The percentage of new funds raised in pounds sterling also remained stable at 9% in 2025 (2024: 9%), which made it KfW's third most significant funding currency in 2025.

KFW'S TOTAL NEW CAPITAL-MARKET FUNDING VOLUME 2025 BY CURRENCIES\*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | EUR in billions | In % of total | In % of total |  |
|  Euro (EUR) | 48.1 | | *61.8* | |
|  U.S. dollar (USD) | 16.9 | | *21.6* | |
|  Pound sterling (GBP) | 7.1 | | *9.1* | |
|  Australian dollar (AUD) | 1.7 | | *2.2* | |
|  Hong Kong dollar (HKD) | 1.6 | | *2.1* | |
|  Other currencies (1) | 2.5 | | *3.2* | |
|  **Total** | **77.9** | **** | ***100*** | **** |

---

\* Amounts in the table may not add up due to rounding differences. 

(1) CHF, CNY, DKK, NOK and SEK.

In connection with its green bond issuances, KfW has a Green Bond Framework in place that reflects international best practices and is aligned with the 2021 edition of the "Green Bond Principles" (including June 2022 Appendix 1) supported by the International Capital Market Association ("ICMA"). In December 2023, KfW published an updated Green Bond Framework on its website, which is applicable to issuances of green bonds by KfW from January 1, 2024 onwards. Under the updated Green Bond Framework, the proceeds from such green bond issuances may be linked to promotional loan programs and to financing provided by KfW in the context of international cooperation and project and export finance in the eligible project categories Renewable Energy, Green Buildings (formerly Energy Efficiency), Clean Transportation, Biodiversity and Climate Protection Programme for Corporates. Through its green bond issuances, KfW aims to broaden its investor base by addressing socially responsible investors and to enhance the capital markets' infrastructure for financing environmental projects that have the reduction of greenhouse gas emissions as their common objective. Net proceeds from the sale of its green bonds and requests for disbursements under the eligible environmental projects are tracked by KfW in an appropriate manner. KfW provides investors with information regarding the use of proceeds in terms of disbursements on a regular basis on its website. Unless otherwise indicated, information available on, or accessible through, KfW's website is not incorporated herein by reference. In 2025, KfW conducted ten new green bond issuances in eight currencies as well as eight re-openings. In total, green bonds accounted for net proceeds of EUR 14.0 billion, or 20.0%, of KfW's total capital-market funding.

------

The most important sources of capital-market funding for KfW are bond and note issuances followed by promissory note loans. As of December 31, 2025, the amount of outstanding bonds and notes issued by KfW totaled EUR 406.7 billion, representing a EUR 16.3 billion decrease from EUR 423.0 billion outstanding as of December 31, 2024.

Of outstanding borrowings, promissory note loans continue to be KfW's second most important capital-market funding instrument, with a book value of EUR 17.9 billion as of December 31, 2025. Of this amount, EUR 17.0 billion was recognized as financial liabilities at amortized cost (of which EUR 1.3 billion as liabilities to banks and EUR 15.7 billion as liabilities to customers) and EUR 0.9 billion was recognized as financial liabilities at fair value (of which EUR 0.3 billion as liabilities to banks and EUR 0.6 billion as liabilities to customers). The decrease in the book value of promissory note loans from EUR 26.0 billion in 2024 to EUR 17.9 billion in 2025 is largely due to decreased refinancing via the WSF. Promissory note loans are a special instrument of the German capital markets, under which the lending entity (generally a bank, insurance company or public pension fund) receives a certificate evidencing its loan to the borrower and the terms of such loan. Maturities on promissory note loans range from one to 30 years, thereby providing a high degree of flexibility to both the borrower and the lender. Transferable only by way of assignment, promissory note loans have only limited liquidity in the interbank secondary market.

The following table sets forth summary information concerning KfW's outstanding bonds and notes as well as promissory note loans with an initial maturity of more than one year and issued in the capital markets.

INFORMATION ON ISSUANCES OF FUNDED DEBT OF KFW GROUP

(AS OF DECEMBER 31, 2025)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Currency | Number of<br> transactions | Interest type | Average<br>interest<br>rate in %<br> per annum <br>(1) (2) | Years of issue | Maturities | Average years to<br>maturity (2) | Aggregate<br>principal amount<br>outstanding<br>in applicable<br>currency | Aggregate<br>principal amount<br>outstanding<br>in EUR (3) |
|  AUD | 15 | FIXED | 3.90 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2016-2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2026-2035 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.39 | 15880000000.00 | 9032478243.56 |
|  CAD | 4 | FIXED | 2.46 | 2006-2023 | 2026-2037 | 1.98 | 1953225000.00 | 1214088140.23 |
|  CHF | 4 | FIXED | 1.27 | 2007-2025 | 2030-2037 | 7.93 | 720000000.00 | 773029847.54 |
|  CNY | 19 | FIXED | 2.53 | 2021-2025 | 2026-2030 | 0.84 | 12394000000.00 | 1506649485.79 |
|  DKK | 1 | FIXED | 0.00 | 2025-2025 | 2032-2032 | 6.75 | 850000000.00 | 113805245.75 |
|  EUR | 409 | FIXED | 1.47 | 1999-2025 | 2026-2055 | 4.46 | 300024667013.45 | 300024667013.45 |
|  EUR | 15 | FLOATING | 3.46 | 2004-2025 | 2026-2034 | 2.73 | 1125858495.34 | 1125858495.34 |
|  GBP | 21 | FIXED | 3.67 | 2000-2025 | 2026-2037 | 2.28 | 27266803000.00 | 31247768737.11 |
|  HKD | 33 | FIXED | 3.38 | 2023-2025 | 2026-2031 | 2.48 | 16489000000.00 | 1.802,785,795.50 |
|  JPY | 5 | FIXED | 1.63 | 2006-2008 | 2026-2038 | 3.75 | 136290000000.00 | 740344396.76 |
|  JPY | 73 | FLOATING | 3.91 | 2002-2019 | 2027-2049 | 12.92 | 31100000000.00 | 168939105.87 |
|  NOK | 15 | FIXED | 4.05 | 2005-2025 | 2026-2036 | 2.84 | 42500000000.00 | 3588617748.88 |
|  NZD | 2 | FIXED | 2.16 | 2018-2021 | 2028 | 2.40 | 190000000.00 | 93228655.54 |
|  SEK | 12 | FIXED | 2.18 | 2011-2025 | 2026-2031 | 3.02 | 19650000000.00 | 1815829598.48 |
|  USD | 53 | FIXED | 3.63 | 2006-2025 | 2026-2046 | 3.06 | 85944486024.34 | 73144243424.97 |
|  USD | 1 | FLOATING | 5.31 | 2023 | 2026 | 0.83 | 1.000,000,000.00 | 851063829.79 |
|  ZAR | 16 | FIXED | 7.16 | 2020-2022 | 2028-2031 | 3.86 | 3741000000.00 | 192399672.91 |
|  **Total** | **698** |  |  |  |  | **3.97** |  | **427435797437.48** |

---

(1) Interest rate of floating rate note means the applicable interest rate as of December 31, 2025. For floating
rate notes with interest rates that are fixed in arrears, the latest fixed interest rate was used. Zero coupon bonds are included in the calculation with their average effective interest rates.

(2) Averages have been calculated on a capital-weighted basis taking into account the aggregate principal amount
outstanding in euro.

(3) Conversion into euro at the spot rate using the ECB reference rates on December 31, 2025.

*Money-Market Funding.* KfW issues commercial paper under two commercial paper programs: the EUR 90 billion multicurrency commercial paper program and the USD 30 billion commercial paper program. As of December 31, 2025, KfW Group's commercial paper outstanding totaled EUR 53.9 billion (December 31, 2024: EUR 32.5 billion).

------

*Public Funds* 

As of December 31, 2025, the proportion of public funds in KfW Group's borrowings was 4%. The most important source of public funds for KfW is the budget of the Federal Republic. Total long-term and short-term borrowings from funds provided by the federal budget (excluding loans on a trust basis) amounted to EUR 17.5 billion as of December 31, 2025 (December 31, 2024: EUR 26.1 billion). KfW Group's long-term and short-term borrowings from the ERP Special Fund amounted to EUR 307 million as of December 31, 2025 (December 31, 2024: EUR 342 million). Public funds are made available to KfW Group for use in special categories of KfW's domestic activities and certain export and project finance transactions with developing countries.

Public funds are particularly important in the area of financial cooperation, where KfW Entwicklungsbank extends loans and disburses grants to foreign public sector borrowers and recipients in developing countries and emerging economies. Federal budget funds constituted approximately 28% of the sources of funding for KfW Entwicklungsbank's commitments in 2025. Funds from the Federal Government involved in loan commitments and grants of KfW Entwicklungsbank do not, by their nature, appear on KfW's consolidated statement of financial position. For more information see "KfW Entwicklungsbank (KfW Development Bank)."

***Derivatives***

KfW generally enters into derivatives transactions for hedging purposes in connection with its financing and funding activities. Accordingly, a substantial majority of its derivatives are interest- or currency-related derivatives. KfW Group does not enter into derivatives for trading purposes and does not facilitate the purchase of derivatives on behalf of any entities outside the group through brokerage or similar agency activities.

The following tables provide detailed information on the group's derivatives exposures:

KFW GROUP'S DERIVATIVES EXPOSURE \*

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Notional value | Notional value | Fair value | Fair value | Fair value | Fair value |
|  | As of December 31 | As of December 31 | As of December 31, 2025 | As of December 31, 2025 | As of December 31, 2024 | As of December 31, 2024 |
|  | 2025 | 2024 | Positive | Negative | Positive | Negative |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) |
|  Interest-related derivatives | 644511 | 675658 | 2535 | 4631 | 2807 | 6559 |
|  Currency-related derivatives (1) | 150768 | 150258 | 1161 | 5937 | 6854 | 2710 |
|  Credit derivatives as protection buyer | 0 | 0 | 0 | 0 | 0 | 0 |
|  Miscellaneous | 0 | 0 | 0 | 0 | 0 | 0 |
|  **Total derivatives (2)(3)** | **795278** | **825916** | **3696** | **10568** | **9661** | **9269** |
|  Embedded derivatives accounted for separately |  |  | 149 | 2 | 87 | 5 |
|  **Total balance sheet items "derivatives designated for hedge derivatives"** | **795278** | **825916** | **3845** | **10570** | **9748** | **9275** |

---

\* Amounts in the table may not add up due to rounding differences. 

(1) Includes cross-currency swaps.

(2) Includes derivative financial instruments which are offered by KfW's wholly-owned subsidiary KfW IPEX-Bank
to its customers as hedging instruments in connection with, and related to, financing in the context of its export and project financing activities. In order to hedge the risk arising from these derivative transactions, KfW IPEX-Bank enters into
hedging transactions with KfW. In the context of centralizing and aggregating market-facing hedging activities within the group at the parent level, KfW, in turn, hedges itself with corresponding offsetting transactions in the market to the extent
necessary. These risk-mitigating hedging transactions entered into by KfW are also disclosed.

(3) Includes derivative contracts in closed risk positions entered into in connection with Special Federal Mandates.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | As of December 31 | As of December 31 | As of December 31 | As of December 31 |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 |  |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) |  |
|  **Total positive fair value** |  | **3696** |  | **9661** |  |
|  **Total positive fair value after netting (1)** |  | **312** |  | **8061** |  |
|  Collateral received |  | 234 |  | 7692 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which cash collateral* | | *234* | | *7692* | |
|  **Total positive fair value after netting and collaterals** |  | **77** |  | **369** |  |

---

(1) Presents the effects of netting agreements that do not fulfill the offsetting criteria under IFRS Accounting
Standards. Due to the strict criteria for offsetting financial instruments under IAS 32, KfW Group's consolidated statement of financial position only reflects netting effects with respect to derivatives within a central counterparty clearing.

KfW Group's derivatives activities are reflected in its consolidated statement of financial position in the line items "Financial assets at fair value", "Financial liabilities at fair value" and "Derivatives designated for hedge accounting." For additional information on KfW Group's derivatives exposure, see notes 8, 9, 39, 40, 49, 50, 58, 59 and 60 to the financial statements included in Exhibit (e) to this annual report. For more information on interest and currency risks related to derivatives as well as counterparty default risks, see "Combined Management Report—Risk report—Types of risk—Credit risk" and "—Market price risk," respectively, included in Exhibit (e) to this annual report.

------

***Asset Management***

As of December 31, 2025, KfW Group held securities and investments in an amount of EUR 43.3 billion (December 31, 2024: EUR 43.1 billion). See "Combined Management Report—Economic report—Development of net assets of KfW Group" included in Exhibit (e) to this annual report for more information concerning securities and investments. EUR 35.6 billion (notional amount), or 82%, of all securities and investments were held in the form of fixed-income securities for liquidity purposes in KfW's liquidity portfolio. Equity participations held directly or indirectly by KfW amounted to EUR 5.6 billion. The remaining securities and investments were securities held as a surrogate for loans or as equity investments in the context of KfW Group's promotional business (e.g., KfW's green bond portfolio, KfW's ABS portfolio, or DEG's direct investments).

*Liquidity Portfolio* 

KfW pursues a conservative liquidity management strategy. For this purpose, KfW holds financial assets in its liquidity portfolio in a notional amount of EUR 35.6 billion as of December 31, 2025 (December 31, 2024: EUR 35.6 billion). The bulk of securities held in this portfolio is denominated in euro. KfW purchases medium-term securities issued by banks, primarily covered bonds (*Pfandbriefe*), bonds of public sector issuers and supranational institutions or agencies as well as ABS and ABCP investments. The bulk of euro-denominated bonds included in KfW's liquidity portfolio is eligible as collateral with the ECB and enables KfW to enter into repurchase agreements in refinancing operations within the European System of Central Banks via the Deutsche Bundesbank. For financial reporting purposes, securities denominated in U.S. dollar or GBP were converted into euro at the currency exchange rate as of December 31, 2025. In addition to these securities, as of December 31, 2025, KfW held money-market assets (overnight and term loans as well as reverse repurchase transactions) for liquidity management purposes in an amount of EUR 41.2 billion (December 31, 2024: EUR 26.6 billion).

As a signatory to the United Nations-supported "Principles for Responsible Investment" (PRI), KfW is committed to managing its liquidity portfolio in a sustainable manner. KfW uses exclusion criteria for its liquidity portfolio that are based on the exclusion list of KfW Group. ESG risks are evaluated in a structured manner using an ESG risk profile tool and taken into account in the internal rating process.

*Equity Investments and Shares in Non-Consolidated Subsidiaries* 

The portfolio of equity investments and shares in non-consolidated subsidiaries increased by EUR 0.5 billion to EUR 5.6 billion in 2025 (December 31, 2024: EUR 5.1 billion). This increase was due to portfolio growth at KfW Capital.

*Green Bond Portfolio* 

As of December 31, 2025, the promotional green bond portfolio's notional volume amounted to EUR 1.7 billion (December 31, 2024: EUR 2.1 billion). KfW's promotional green bond activities ended as of December 31, 2023. The remaining outstanding portfolio volume will decrease gradually with amortizations.

*ABS Portfolio* 

In 2025, KfW made no new investments in ABS. Its existing ABS portfolio has matured and, as of December 31, 2025, KfW's promotional ABS portfolio amounted to EUR 0 million. (December 31, 2024: EUR 5 million). KfW's capital markets-based promotional activities for SMEs ended as of December 31, 2019. The remaining outstanding portfolio volume will decrease gradually with amortizations.

***Privatization Initiatives***

The Federal Government mandated KfW to take measures with respect to the privatization of Deutsche Telekom and Deutsche Post.

Pursuant to a Special Federal Mandate, KfW has acquired and sold shares of both Deutsche Telekom and Deutsche Post in various transactions since 1997. In furtherance of the privatization initiatives of the Federal Government, KfW sold those shares through German and international public offerings, private placements, block trades, exchangeable bonds and other transactions. Pursuant to an arms-length agreement with the Federal Government, KfW is protected against the market risk of these transactions. The agreement provides that KfW will receive a percentage of any market value increase in the shares acquired and sold, plus a fee for its services.

------

As of December 31, 2025, KfW's total ownership interest in Deutsche Telekom remained unchanged compared to December 31, 2024 at approximately 696.8 million ordinary shares. This represented a stake of approximately 14.2% in Deutsche Telekom (December 31, 2024: 14.0%).

As of December 31, 2025, KfW's total ownership interest in Deutsche Post remained unchanged compared to December 31, 2024 at approximately 203.9 million ordinary shares. This represented a stake of approximately 17.7% in Deutsche Post (December 31, 2024: 17.0%).

Given the agreement with the Federal Government described above, KfW's holdings in shares of Deutsche Post and Deutsche Telekom are presented on KfW's consolidated statement of financial position as Financial Assets at Fair Value, which are classified as "Loans and advances to customers – FVM."

***Loan Facility to Greece Mandated by the Federal Government***

KfW supports the Federal Republic in conducting EU-wide financial support measures for Greece. In 2010, the Federal Government gave KfW a Special Federal Mandate to participate in a loan facility to Greece on behalf of the Federal Republic. All risks resulting from this loan facility are covered by a guarantee of the Federal Republic. As of December 31, 2025, the total amount outstanding of this loan to Greece amounted to EUR 7.6 billion (December 31, 2024: EUR 9.1 billion).

**Strategic Shareholdings** 

KfW manages a number of direct and indirect strategic shareholdings, which include wholly-owned subsidiaries as well as shareholdings in other companies taken in the ordinary course of KfW's business as well as a number of investments made in companies pursuant to Special Federal Mandates.

***KfW's Subsidiaries and Other Shareholdings***

KfW's most important strategic shareholdings are DEG (100%) and KfW Capital (100%), which are both directly held by KfW, as well as KfW IPEX-Bank (100%), which is held indirectly via KfW's wholly-owned subsidiary KfW Beteiligungsholding GmbH. For a description of these entities and their operations, see "KfW Capital", "Export and Project Finance (KfW IPEX-Bank)" and "DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH" above.

Furthermore, KfW directly holds stakes in Finanzierungs- und Beratungsgesellschaft mbH (100%), tbg Technologie-Beteiligungs- Gesellschaft mbH (100%), Berliner Energieagentur GmbH (25%), Elia Group (0.25%), True Sale International GmbH (7.7%) and the European Investment Fund (2.3%). In June 2019, KfW participated in a capital increase of Elia System Operator SA/NV and acquired a 0.25% stake in the company at its own risk. Elia System Operator SA/NV was renamed Elia Group SA/NV in 2023 and is the 100% holding company of Eurogrid International NV/SA which holds 80% of Eurogrid GmbH. For information on KfW's 20% shareholding in Eurogrid GmbH, see "— KfW's Shareholdings Pursuant to Special Federal Mandates of the Federal Government — 50Hertz Transmission GmbH".

***KfW's Shareholdings Pursuant to Special Federal Mandates of the Federal Government***

KfW's investments in Airbus SE, 50Hertz Transmission GmbH, BioNTech SE ("BioNTech"), HENSOLDT AG ("Hensoldt"), TransnetBW GmbH, German LNG Terminal GmbH and TenneT GmbH & Co. KG ("TenneT"), as well as KfW's investments in Deutsche Telekom and Deutsche Post (see "Financial Markets— Privatization Initiatives"), were made pursuant to a Special Federal Mandate in accordance with article 2 paragraph 4 of the KfW Law, which authorizes the Federal Government to direct KfW to take measures in connection with matters in which the Federal Republic has an interest. These investments were made at the Federal Republic's economic risk and the opportunities and risks of these investments lie with the Federal Republic.

The stakes in BioNTech (0.6%), Hensoldt (25.1%) and German LNG Terminal GmbH (50.0%) are held directly by KfW. KfW's shareholding in Airbus SE (9.12%) is held indirectly via various entities. KfW's shareholding in 50Hertz Transmission GmbH (20.0%) is held indirectly via a subsidiary of KfW (Selent Netzbetreiber GmbH). KfW's shareholding in TransnetBW GmbH (24.95%) is also held via a subsidiary of KfW (Expand Netzbetreiber GmbH). Furthermore, KfW has entered into an agreement to acquire a 25.1% stake in TenneT. Assuming completion of this acquisition, KfW expects this stake to be held by its subsidiary Scopello GmbH.

------

*Airbus SE* 

In 2007, KfW, together with 14 other investors, agreed to jointly acquire from DaimlerChrysler group (now Mercedes-Benz Group) a stake of, at that time, 7.5% in European Aeronautic Defence and Space Company N.V. ("EADS"), the economic interest of which was held through the special purpose vehicle Dedalus GmbH & Co. KGaA ("Dedalus"). In connection with a further reduction by the Daimler group (now Mercedes-Benz Group) of its stake in EADS in December 2012, the Federal Government, which regards the ownership structure of EADS as a matter of strategic national interest, agreed on a revised government shareholding agreement with EADS, France and Spain, which allows the Federal Government to directly or indirectly own an equity stake of up to 12% in EADS. In this context, the Federal Government mandated KfW to directly or indirectly acquire and hold an equity stake of up to 12% in EADS on behalf of the Federal Republic.

At the beginning of April 2013, France, Germany and Spain entered into a supplemental shareholders' agreement, which provided for the dissolution of the Dedalus consortium and for KfW and the remaining investors to hold their respective equity stakes in EADS directly and indirectly through Gesellschaft zur Beteiligungsverwaltung GZBV mbH & Co. KG ("GZBV"). At the end of 2013, GZBV increased its equity stake in EADS by buying approximately 1.87 million shares. In 2015, EADS transformed its legal form into a European company (*Societas Europaea*) and changed its legal name to Airbus Group SE. In April 2017, following approval by the annual general meeting, the legal name was changed into Airbus SE. As of December 31, 2025, KfW held, through GZBV, an equity stake of approximately 9.12% in Airbus SE. Together with the other investors' interests in GZBV, GZBV held a total equity stake of 10.82% in Airbus SE.

*50Hertz Transmission GmbH* 

In July 2018, the Federal Government gave KfW a Special Federal Mandate to acquire a 20% shareholding in Eurogrid International CVBA/SCRL ("Eurogrid International", now Eurogrid International SA/NV). The transaction closed in August 2018. Under the mandate, all economic risks resulting from KfW's investment are covered by a guarantee of the Federal Republic. At the time of the acquisition, Eurogrid International indirectly held all shares in the German transmission systems operator 50Hertz Transmission GmbH via its wholly-owned subsidiary Eurogrid GmbH.

In June 2019, KfW swapped its 20% equity stake in Eurogrid International for a 20% equity stake in Eurogrid GmbH in accordance with the Special Federal Mandate. This share swap was executed to simplify the holding structure. KfW's stake in Eurogrid GmbH is now held via Selent Netzbetreiber GmbH, a wholly-owned subsidiary of KfW. The German transmission system operator 50Hertz Transmission GmbH is a wholly-owned subsidiary of Eurogrid GmbH, incorporated in Berlin, Germany.

In July 2022, the Federal Government gave KfW a further Special Federal Mandate to contribute an amount of EUR 50 million via KfW's wholly-owned subsidiary Selent Netzbetreiber GmbH into the capital reserves of Eurogrid GmbH. The amount was provided to Eurogrid GmbH on August 5, 2022.

In July 2023, the Federal Government gave KfW a further Special Federal Mandate to contribute an amount of EUR 24 million via KfW's wholly-owned subsidiary Selent Netzbetreiber GmbH into the capital reserves of Eurogrid GmbH. This amount was provided to Eurogrid GmbH on August 9, 2023.

In July 2024, the Federal Government gave KfW a further Special Federal Mandate to contribute, via KfW's wholly-owned subsidiary Selent Netzbetreiber GmbH, EUR 120 million into the capital reserves of Eurogrid GmbH. This amount was provided to Eurogrid GmbH on August 23, 2024.

In October 2025, the Federal Government gave KfW a further Special Federal Mandate to contribute, via KfW's wholly-owned subsidiary Selent Netzbetreiber GmbH, EUR 120 million into the capital reserves of Eurogrid GmbH. This amount was provided to Eurogrid GmbH on October 24, 2025.

Each of the July 2022, July 2023, July 2024 and October 2025 Special Federal Mandates was made pursuant to and in accordance with the original Special Federal Mandate of July 2018.

*BioNTech SE* 

In June 2020, the Federal Government gave KfW a Special Federal Mandate to make an investment of approximately EUR 300 million through the acquisition of a stake in biopharmaceutical company CureVac AG ("CureVac"), which, following subsequent reorganization measures, resulted in a shareholding in CureVac. In June 2025, BioNTech publicly announced a voluntary public exchange offer for 100% of the shares in CureVac. Pursuant to a Special Federal Mandate, KfW entered into a Tender and Support Agreement with BioNTech on July 31, 2025, and tendered its shares in CureVac to BioNTech in exchange for BioNTech American Depositary Shares ("ADSs"). On December 3, 2025, BioNTech announced that the minimum condition of the public exchange offer had been satisfied. On December 16, 2025, KfW received BioNTech ADSs in exchange for its shares in CureVac. Following the completion of the compulsory acquisition (squeeze-out) of the remaining CureVac shares by BioNTech in January 2026, the takeover of CureVac has been finalized. All costs and risks associated with the transaction are borne by the Federal Republic of Germany. KfW will hold the BioNTech ADSs on a fiduciary basis and at the economic risk of the Federal Government.

------

*HENSOLDT AG* 

In March 2021, the Federal Government gave KfW a Special Federal Mandate to acquire 25.1% of the outstanding shares in Hensoldt. Hensoldt is a stock corporation under German law with its registered seat in Taufkirchen, Germany, which focuses on electronic sensor solutions and optronics. The acquisition was completed in May 2021. In December 2023, the Federal Government gave KfW a further Special Federal Mandate, pursuant to and in accordance with the original Special Federal Mandate of March 2021, to acquire new shares in Hensoldt's capital increase announced on December 7, 2023, pro-rata to their 25.1% shareholding.

*TransnetBW GmbH* 

In November 2023, the Federal Government gave KfW a Special Federal Mandate to acquire a 24.95% stake in TransnetBW GmbH held by EnBW Übertragungsnetz Immobilien GmbH & Co. KG ("UENI"). At the time of the acquisition, UENI directly held all shares in the German transmission systems operator TransnetBW GmbH. KfW's stake in TransnetBW GmbH is held via Expand Netzbetreiber GmbH, a wholly-owned subsidiary of KfW.

*German LNG Terminal GmbH* 

In August 2022, the Federal Government gave KfW a Special Federal Mandate to acquire a 50.0% equity participation in German LNG Terminal GmbH ("GLNG") and to provide subsequent pro rata payments to the capital reserve of GLNG. To this end, KfW has entered into a share purchase agreement and a shareholders' agreement with Gasunie LNG Holding B.V. and GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, a wholly owned subsidiary of RWE AG, regarding the equity participation and subsequent pro rata payments to the capital reserve. GLNG is a project company that is developing a liquefied natural gas (LNG) import facility in Brunsbüttel, Germany. The closing of the transaction took place in July 2023.

*TenneT GmbH & Co. KG* 

Pursuant to a Special Federal Mandate of the Federal Government, KfW entered into a sale and share purchase agreement on February 3, 2026 with the Dutch state-owned companies TenneT Holding B.V. and TransTenneT B.V. to acquire a 25.1% equity participation in TenneT through KfW's wholly-owned subsidiary Scopello GmbH. TenneT has its registered seat in Bayreuth, Germany and serves as the parent company of the TenneT Germany Group ("TenneT Germany"). TenneT Germany is a large electricity transmission system operator and operates critical infrastructure in Germany. Completion of the acquisition is subject to customary closing conditions and regulatory approvals.

*Raw Materials Fund* 

In October 2024, the Federal Government gave KfW a Special Federal Mandate to conduct investments under the scope of the German Raw Material Fund ("GRMF") to strengthen the supply of raw materials to German companies as well as increase the resilience of supply chains and of the country's economy as a whole. Under the scope of the GRMF, a number of strategic investments based on individual Special Federal Mandates by the Federal Government will be made.

The first of these strategic investments is a 14.5% (EUR 150 million) equity participation in Vulcan ("Vulcan"). Vulcan is developing Projekt Lionheart, which aims to enable the production of approximately 24,000 tpa battery-quality lithium hydroxide, along with over 275 GWh of power and up to 560 GWh per annum of renewable heat production in Germany. To this end, KfW has entered into an investment agreement and a shareholders' agreement with, among other parties, Vulcan and Vulcan Energy Resources Ltd. regarding the equity participation. After closing, which is expected in the first half of 2026, pro rata payments to the capital reserve up to the investment amount will be paid based on the progress of construction.

------

**CAPITALIZATION** 

CAPITALIZATION OF KFW GROUP AS OF DECEMBER 31, 2025

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(EUR in millions) |
| &nbsp;&nbsp;&nbsp;&nbsp; Borrowings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term funds | 54995 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bonds and other fixed-income securities | 406707 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other borrowings (1) | 24351 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total borrowings | 486054 |
| &nbsp;&nbsp;&nbsp;&nbsp; Equity |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Paid-in subscribed capital (2) | 3300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital reserve | 8447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reserve from the ERP Special Fund | 1191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 27555 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fund for general banking risks | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revaluation reserve | 131 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total equity | 40623 |
|  **Total capitalization** | **526677** |

---

(1) Includes long-term and short-term borrowings from the ERP Special Fund of EUR 307 million.

(2) KfW's equity capital, 80% of which is held by the Federal Republic and the remaining 20% by the
Länder, amounted to EUR 3,750 million in 2025, of which EUR 3,300 million has been paid in pro rata by the Federal Republic and the Länder.

------

**MANAGEMENT AND EMPLOYEES** 

The bodies of KfW are the Executive Board (*Vorstand*) and the Board of Supervisory Directors (*Verwaltungsrat*).

**Executive Board** 

The Executive Board is responsible for the day-to-day conduct of KfW's business and the administration of its assets. Typically, members of the Executive Board are initially appointed for a maximum of three years by the Board of Supervisory Directors. After the first term each member may be repeatedly reappointed for, or his or her term of office may be repeatedly extended by, up to five years by the Board of Supervisory Directors. Each member of the Executive Board is responsible for certain aspects of KfW's activities but shares the responsibility for actions taken by the Executive Board.

The following biographical information on the current members of the Executive Board includes their dates of birth, the year in which they were appointed, their terms of office, their current positions and their areas of responsibility.

For information on the remuneration of the Executive Board, see note 69 to the financial statements included in Exhibit (e) to this annual report.

***Stefan Wintels***

Date of birth: November 17, 1966

Stefan Wintels joined KfW's Executive Board as Co-CEO in October 2021 and became the sole CEO in November 2021. He is in charge of the General Secretariat, Group Communications, Internal Auditing, Financial Markets, Group Development and Economics, Legal Affairs, as well as KfW Capital. Mr. Wintels was appointed until September 2029.

Prior to joining KfW, Mr. Wintels worked at Citigroup for 20 years from 2001 to 2021 in various leadership roles. Most recently, he was the Global Co-Head Financial Institutions Group and a member of the Global BCMA Executive Committee. Before that, he was Vice Chairman of Citigroup in Germany, Citi's Chief Country Officer for Germany as well as Chief Executive Officer of Citigroup Global Markets Europe AG until March 2020.

Stefan Wintels began his professional career in 1994 at Deutsche Bank AG and left in 2001 as Managing Director at Deutsche Bank's Corporate Development / Group Strategy Department.

He received a Master's degree in Business Administration from the Technische Universität Berlin and participated in the second year of a two year MBA program at the University of Illinois, Urbana-Champaign.

Stefan Wintels also chairs the supervisory board of KfW Capital, Frankfurt am Main, Germany. In addition, he is a member of the supervisory boards of Deutsche Post AG, Bonn, Germany and of Deutsche Telekom AG, Bonn, Germany.

***Melanie Kehr***

Date of birth: November 17, 1974

Melanie Kehr became a member of KfW's Executive Board in March 2019. She is in charge of KfW's Domestic Promotional Business (Individual Financing Solutions & Public Clients, SME Bank & Private Clients), Information Technology and Operations. Ms. Kehr joined KfW as General Manager in September 2018. Ms. Kehr was appointed until August 2027.

Ms. Kehr studied Business Administration at the University of Bielefeld, Germany, and also holds a Master's degree in Economics from Purdue University, Indiana, USA. In 1999, she started her professional career at the consulting firm Andersen Consulting Unternehmensberatung GmbH (renamed Accenture in 2001) where she became Managing Director for Industry Financial Services in 2012. In 2014, she was appointed Group Chief Information Officer of Bayerische Landesbank, Munich, Germany, and served in this position until July 2018.

Ms. Kehr is also a member of the supervisory board of Deka Bank Deutsche Girozentrale, Frankfurt am Main, Germany.

------

***Christiane Laibach***

Date of birth: November 9, 1961

Christiane Laibach joined KfW's Executive Board in June 2021. She leads the international financing activities consisting of KfW Entwicklungsbank and the two affiliates KfW IPEX GmbH (Export and Project Finance) and KfW DEG mbH. Ms. Laibach was originally appointed until May 2027, but will retire early after 36 years at KfW Group. The consensual resignation from office effective end of July 31, 2026, was discussed in the meeting of the Presidial and Nomination Committee (*Präsidial- und Nominierungsausschuss*) of KfW's Board of Supervisory Directors on December 4, 2025.

Prior to joining KfW's Executive Board she was member of DEG's Management Board for six years, the last year as CEO. From 2008 to 2015 she was part of KfW-IPEX Bank's Management Board, including Chief Risk and Financial Officer. She has been holding leadership positions at KfW Group for 25 years after having joined in 1990, including as global head of aviation for seven years.

Ms. Laibach holds a Master's degree in Economics from University of Mainz, Germany, and completed the Executive Management Program at Wharton Business School, Philadelphia, USA.

Ms. Laibach also chairs the supervisory board of KfW IPEX GmbH. Further, she serves as first deputy chair of the supervisory board of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, Cologne, Germany.

***Bernd Loewen***

Date of birth: October 23, 1965

Bernd Loewen joined KfW as a member of KfW's Executive Board in July 2009. He is in charge of Finance, Human Resources, Central Services, Organization and Consulting, as well as Transaction Management. Mr. Loewen acts as Chief Financial Officer of KfW after initially running both the risk and finance departments at KfW up to the separation of the CRO and CFO functions as of January 1, 2016. Mr. Loewen was appointed until June 2027.

After graduating with a Business Administration degree from the University of Muenster, Germany, he started his professional career at an auditing firm and completed the tax consultant exam. Subsequently, Mr. Loewen joined the Corporate Development department at COMMERZBANK Aktiengesellschaft, Frankfurt am Main, Germany, before moving on to Equity Derivatives Trading. From 2002 onwards, Bernd Loewen worked as Co-Managing Director at Commerz Capital Markets Corporation, a subsidiary of COMMERZBANK Aktiengesellschaft, in New York, USA. In 2005, he was appointed Member of the Management Board of mBank (formerly BRE Bank SA), a Polish subsidiary of COMMERZBANK Aktiengesellschaft and relocated from New York to Warsaw, Poland.

Mr. Loewen is also a member of the supervisory board of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, Cologne, Germany.

***Dr. Stefan Peiß***

Date of Birth: April 30, 1969

Dr. Stefan Peiß became a member of KfW's Executive Board in January 2016. He is in charge of Credit Risk Management, Risk Controlling, Compliance and Non-Financial Risks, and he acts as Chief Risk Officer of KfW. Dr. Peiß was appointed until December 2029.

Dr. Peiß studied business administration at the Ludwig-Maximilians-Universität in Munich, Germany, where he also obtained a doctorate in political science (Dr. oec. publ.) from the university's Institute for Risk Management and Insurance. In 1995, he started his career in the Real Estate Department of Bayerische Landesbank, Germany. He then transferred to the Risk Management Department, where he held management positions as Head of Team (client portfolio and strategic controlling) and Head of Department (portfolio controlling and controlling systematics, risk controlling trading activities). In 2007, Dr. Peiß became Head of the Risk Operations Division, and in 2008, he was promoted to Head of Group Risk Control Division. Dr. Peiß joined KfW in 2009 as Senior Vice President and Head of Risk Management and Controlling.

Dr. Peiß serves as deputy chairman of the supervisory board of KfW IPEX-Bank, Frankfurt am Main, Germany and serves as deputy chairman of KfW Capital's supervisory board, Frankfurt am Main, Germany.

------

**Board of Supervisory Directors** 

The Board of Supervisory Directors generally has 37 members and consists of the Federal Minister of Finance; the Federal Minister for Economic Affairs and Energy; the Federal Minister for Foreign Affairs; the Federal Minister of Agriculture, Food and Regional Identity; the Federal Minister of Transport; the Federal Minister for Economic Cooperation and Development; the Federal Minister for the Environment, Climate Action, Nature Conservation and Nuclear Safety; seven members appointed by the Bundesrat; seven members appointed by the Bundestag; five representatives of commercial banks; two industry representatives; one representative each of the local municipalities, agricultural, skilled crafts, trade and housing sectors; and four representatives of the trade unions. The representatives of the commercial banks, industry, the local municipalities, agricultural, skilled crafts, trade and housing sectors, and the trade unions are appointed by the Federal Government after consultation with their constituencies.

The Federal Minister of Finance and the Federal Minister for Economic Affairs and Energy serve as Chairman and Deputy Chairman of the Board of Supervisory Directors on a year-by-year rotating basis, with the latter chairing for the year 2026. The term of office of all Federal Ministers on KfW's Board of Supervisory Directors corresponds to their term of office as Federal Minister of such Federal Ministry, while the other members of the Board of Supervisory Directors are personally appointed for a term of three years.

The Board of Supervisory Directors supervises the overall conduct of KfW's business and the administration of its assets. It may give the Executive Board general directives. In particular, the Board of Supervisory Directors (via its Risk and Credit Committee) generally must approve, among other things, loans to members of management bodies (*Organkredite*), short-term financing, loan commitments to a single borrower exceeding EUR 50 million for non-investment grade or unrated borrowers, certain unsecured loans and loan commitments exceeding EUR 100 million to investment grade borrowers. The Board of Supervisory Directors may reserve the right to approve other transactions or types of transactions. However, it is not authorized to represent KfW or to commit funds on KfW's behalf.

KfW's Board of Supervisory Directors' committee structure comprises a Presidial and Nomination Committee (*Präsidial- und Nominierungsausschuss*), a Remuneration Committee (*Vergütungskontrollausschuss*), a Risk and Credit Committee (*Risiko- und Kreditausschuss*) and an Audit Committee (*Prüfungsausschuss*). The Presidial and Nomination Committee is responsible for dealing with legal and administrative matters as well as fundamental business and corporate policy issues. It may make decisions on the Board of Supervisory Directors' behalf in urgent matters (*Eilentscheidung*). Additionally, it regularly assesses the Executive Board and the Board of Supervisory Directors, provides recommendations for suitable candidates to the Executive Board and may assist the responsible federal agencies in appointing members to the Board of Supervisory Directors. The Remuneration Committee is responsible for dealing with the systems of remuneration for the Executive Board and KfW employees and their consequences for KfW's risk, capital and liquidity management and advises the Presidial and Nomination Committee with respect to the remuneration paid to the members of the Executive Board. The Risk and Credit Committee advises the Board of Supervisory Directors regarding, in particular, the current and future overall risk tolerance and strategy of KfW. It is responsible for approving loans and equity investments at the operational level that exceed certain thresholds as set forth in KfW's Bylaws, as well as for authorizing the issuance of debt securities, borrowings in foreign currencies and swap transactions. The Audit Committee monitors in particular the accounting process and the effectiveness of the risk management system, especially the internal control system and the internal audit system. It monitors the performance of the audits of the annual financial statements and the timely correction of any errors identified by the auditor. Furthermore, the Audit Committee provides recommendations to the Board of Supervisory Directors regarding the approval of the annual unconsolidated financial statements and the adoption of the annual consolidated financial statements. The Presidial and Nomination Committee and the Remuneration Committee will generally be chaired by the Chairperson of the Board of Supervisory Directors. The Risk and Credit Committee and the Audit Committee will generally be chaired by a representative of the banking sector.

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As of March 26, 2026, the members of the Board of Supervisory Directors were:

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| | |
|:---|:---|
| Name | Position |
| Reem Alabali-Radovan | Federal Minister for Economic Cooperation and Development |
| Thomas Bareiß | Member of Parliament; appointed by the Bundestag |
| Dr. Danyal Bayaz | Minister of Finance of the State of Baden-Württemberg; appointed by the Bundesrat |
| Katharina Beck | Member of Parliament; appointed by the Bundestag |
| Dr. André Berghegger | Managing Director of the German Association of Towns and Municipalities (DStGB); representative of the municipalities |
| Gero Bergmann | Member of the Board of Management of BayernLB; representative of the mortgage banks |
| Stefan Evers | Mayor and Senator for Finance of the State of Berlin; appointed by the Bundesrat |
| Yasmin Fahimi | Chair of the Confederation of German Trade Unions (DGB), representative of the trade unions |
| Robert Feiger | Chair of the Federal Executive Committee of the IG Bauen-Agrar-Umwelt Trade Union (IG Bau); representative of the trade unions |
| Dr. Heiko Geue | Minister of Finance of the State of Mecklenburg-Vorpommern; appointed by the Bundesrat |
| Tanja Gönner | CEO and Director General of the Federation of German Industries (BDI); representative of the industry |
| Olav Gutting | Member of Parliament; appointed by the Bundestag |
| Marion Höllinger | Member of the Board of Directors of the Association of German Banks (BdB); representative of the commercial banks |
| Dr. Dirk Jandura | President of the Federation of German Wholesale, Foreign Trade and Services (BGA); representative of the wholesale and foreign trade sector |
| Andrea Kocsis | Deputy Chair of ver.di — United Services Trade Union; representative of the trade unions |
| Lars Klingbeil | Federal Minister of Finance; Deputy Chair in 2026 |
| Stefan Körzell | Member of the Executive Board of the German Confederation of Trade Unions (DGB); representative of the trade unions |
| Prof. Dr. R. Alexander Lorz | Minister of the State Hessian Ministry of Finance; appointed by the Bundesrat |
| Dr. Jan-Marco Luczak | Member of Parliament; appointed by the Bundestag |
| Dr. Helena Melnikov | Chief Executive of the German Chamber of Commerce and Industry (DIHK); representative of the industry |
| Rainer Neske | Chair of the Board of Managing Directors at Landesbank Baden-Württemberg (LBBW); representative of credit institutions prominent in the field of industrial credit |
| Dr. Marcus Optendrenk | Minister of Finance of the State of North Rhine-Westphalia; appointed by the Bundesrat |
| Christian Piwarz | State minister of finance of the State of Saxony; appointed by the Bundesrat |
| Daniel Quinten | Member of the Board of Managing Directors of the National Association of German Cooperative Banks (BVR); representative of the cooperative banks |
| Alois Rainer | Federal Minister of Agriculture, Food and Regional Identity |
| Katherina Reiche | Federal Minister for Economic Affairs and Energy; Chair in 2026 |
| Dr. Thorsten Rudolph | Member of Parliament; appointed by the Bundestag |

---

------

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| | |
|:---|:---|
| Name | Position |
| Joachim Rukwied | President of the German Farmers' Association (DBV); representative of the agricultural sector |
| Dirk Salewski | President of the German Federal Association of Free Real Estate and Housing Companies (BFW); representative of the housing sector |
| Frank Schäffler | Member of Parliament; appointed by the Bundestag |
| Jan Wenzel Schmidt | Member of Parliament; appointed by the Bundestag |
| Carsten Schneider | Federal Minister for the Environment, Climate Action, Nature Conservation and Nuclear Safety |
| Patrick Schnieder | Federal Minister of Transport |
| Martin Schöffel | State Secretary in the Bavarian State Ministry of Finance and Regional Identity; appointed by the Bundesrat |
| Karolin Schriever | Executive Member of the Board of the German Savings Banks Association (DSGV); representative of the savings banks |
| Holger Schwannecke | Secretary General of the German Confederation of Skilled Crafts (ZDH); representative of the skilled crafts sector |
| Dr. Johann Wadephul | Federal Foreign Minister |

---

For information concerning the remuneration of the Board of Supervisory Directors, see note 68 to the financial statements included in Exhibit (e) to this annual report.

**Employees** 

In 2025, KfW Group employed<sup>5</sup> an average of 8,699 persons (excluding members of the Executive Board, trainees, interns and employees on parental leave, but including temporary personnel and local personnel in KfW's representative offices) (2024: 8,493 persons). Approximately 29.5% of KfW's staff (excluding local personnel in KfW's representative offices) are covered by collective bargaining agreements. KfW provides employee benefits such as pensions to its employees.

Of KfW Group's staff, approximately 18.4% are engaged in KfW's domestic business activities, 26.8% in promotion of developing countries and emerging economies (KfW Entwicklungsbank and DEG), 11.5% in Export and Project Finance (KfW IPEX-Bank), and the remaining balance in KfW's accounting, disbursements, collateral, funding and lending support departments and in general administrative and staff functions.

KfW Group has defined employee relations as one of its key sustainability action areas and attaches great importance to treating its employees with respect and appreciation. Because KfW recognizes that its success is based on its skilled and motivated staff, employer attractiveness, including by achieving top positions in the main employer rankings, has been defined as one of the key targets within KfW Group's strategic objectives. KfW believes that a fair remuneration system, group-wide diversity and equal opportunities for the professional development of all employees, irrespective of gender, origin, ethnicity, religion, disability, age, sexual identity or social background, provide a solid basis for achieving this target. KfW emphasizes the importance of achieving target quotas for women in leadership positions and a good work-life balance. As a future-oriented organization, KfW offers a variety of part-time work and mobile work options as well as professional development and training opportunities and supports responsible health management.

For more information concerning KfW Group's employees, see note 68 to the financial statements included in Exhibit (e) to this annual report.

<sup>5</sup> These figures are adjusted by employees on parental leave. KfW has not applied this adjustment retrospectively. As a result, the figures for 2025 are not fully comparable with the corresponding figures published in previous reports filed by KfW.

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**THE FEDERAL REPUBLIC OF GERMANY** 

The following information regarding the Federal Republic is derived from the public official documents cited below. Certain information is preliminary.

**GENERAL** 

**Area, Location and Population**![LOGO](g109115dsp059.jpg)

The Federal Republic is situated in central Europe and comprises an area of approximately 358,000 square kilometers (about 138,000 square miles). According to a first estimate of the Federal Statistical Office, approximately 83.5 million people were living in Germany at the end of 2025, which represents a slight decrease of approximately 100,000 people compared to the end of 2024. These population figures are extrapolated from figures from the 2022 census, published on June 25, 2024. As a result of the 2022 census, the population figure as of May 15, 2022, was revised downward by approximately 1.3 million, from 84.0 million (based on the 2011 census) to 82.7 million inhabitants. Net immigration (defined as immigration minus emigration) was again positive in 2025, but was of insufficient magnitude to prevent the population from shrinking for the first time since 2020. According to the first estimate, in 2025 between 220,000 and 260,000 more people came to Germany than left the country. Thus, net immigration fell by at least 40% in 2025 compared to 2024 (430,183 people) and was at a level similar to that of 2020. In contrast, as in all years since German reunification in 1990, more people died than were born in 2025, which had a dampening effect on population growth. In 2025, the number of births fell again compared to 2024 and is expected to be between 640,000 and 660,000 (2024: 677,117), whereas the number of deaths remained stable at around 1.00 million (2024: 1.01 million), resulting in a birth deficit (difference between births and deaths) of between 340,000 and 360,000. At the end of 2024, approximately 17.4% of the total population was concentrated in metropolitan areas with more than 500,000 inhabitants; the largest of these areas were (in descending order) Berlin, Hamburg, Munich, Cologne and Frankfurt am Main.

*Sources: Statistisches Bundesamt, Bundesländer mit Hauptstädten nach Fläche, Bevölkerung und Bevölkerungsdichte am 31.12.2024 (23.09.2025) (https://www.destatis.de/DE/Themen/Laender-Regionen/Regionales/Gemeindeverzeichnis/Administrativ/02-bundeslaender.html); Statistisches Bundesamt, Bevölkerung Deutschlands nimmt im Jahr 2025 um rund 100 000 Personen ab, press release of January 29, 2026 (https://www.destatis.de/DE/Presse/Pressemitteilungen/2026/01/PD26_032_124.html); Zensus 2022, Zensus 2022: 82,7 Millionen Einwohnerinnen und Einwohner, press release of June 25, 2024 (https://www.zensus2022.de/DE/Aktuelles/PM_Zensus_2022_Bevoelkerungszahl_Ergebnisveroeffentlichung.html); Statistisches Bundesamt, Städte (Alle Gemeinden mit Stadtrecht) nach Fläche, Bevölkerung und Bevölkerungsdichte am 31.12.2024 (23.09.2025) (https://www.destatis.de/DE/Themen/Laender-Regionen/Regionales/Gemeindeverzeichnis/Administrativ/05-staedte.html).* 

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The following table shows selected key demographic figures for the Federal Republic for the years stated.

POPULATION (1)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2020 |
|  | (number of persons) | (number of persons) | (number of persons) | (number of persons) | (number of persons) |
|  Total population | 83577140 | 83456045 | 83118501 | 83237124 | 83155031 |
|  Age distribution | (percent of total population) | (percent of total population) | (percent of total population) | (percent of total population) | (percent of total population) |
|  Under 20 | 18.6 | 18.8 | 18.8 | 18.5 | 18.4 |
| 20-40 | 24.2 | 24.5 | 24.5 | 24.4 | 24.5 |
| 40-60 | 26.6 | 26.8 | 27.3 | 27.7 | 28.1 |
| 60-80 | 23.2 | 22.6 | 22.2 | 22.0 | 21.8 |
|  80 and more | 7.2 | 7.2 | 7.2 | 7.3 | 7.1 |

---

(1) Based on census 2011.

*Source: Statistisches Bundesamt, Bevölkerung, Bevölkerungsstand, Bevölkerung nach Altersgruppen (ab 2011)* 

*(https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Bevoelkerung/Bevoelkerungsstand/Tabellen/liste-altersgruppen-basis-2022.html).* 

Without the surplus resulting from net immigration, the total population would have decreased every year since German reunification in 1990 because more people died than were born in each year. These developments are expected to continue, together with the continued aging of the population. According to the 16th coordinated population projection of the Federal Statistical Office published in December 2025 and covering the period until 2070, the share of people of retirement age (which will be 67 years from 2031 onwards) will rise to one quarter by the year 2035. The number of people of working age (20 to 66 years), which currently comprises 51.2 million people, will decrease to between 45.4 and 48.0 million until 2040 years, which may result in a downward pressure on Germany's growth potential in the long term. The number of those aged 80 or over will remain relatively stable until the early 2030s, amounting to around 6.0 million. Subsequently, this elderly population is expected to increase strongly, along with the related need for long-term care. If net immigration remains at the average of the period from 1990 to 2031 (350,000 persons per year), around 81 million people would live in Germany in 2070. However, with a low level of net immigration of 150,000 people per year, which was the average of the years from 1955 to 1989, the population would decrease to just below 69 million people in 2070.

*Sources: Statistisches Bundesamt, Bevölkerung Deutschlands nimmt im Jahr 2025 um rund 100 000 Personen ab, press release of January 29, 2026 (https://www.destatis.de/DE/Presse/Pressemitteilungen/2026/01/PD26_032_124.html); Federal Statistical Office, By 2035, one quarter of Germany's population will be aged over 67 or over, press release of December 11, 2025 (https://www.destatis.de/EN/Press/2025/12/PE25_446_12.html); Bevölkerungsvorausberechnung: 16. Koordinierte Bevölkerungsvorausberechnung, Annahmen und Ergebnisse (in German only, https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Bevoelkerung/Bevoelkerungsvorausberechnung/annahmen_ergebnisse_16te_kBv.html).* 

**Government** 

The Federal Republic is a federated republic whose constitution is codified in the *Grundgesetz* of 1949. The capital of the Federal Republic is Berlin. The Federal Republic consists of 16 federal states (Länder). The Länder have legislative sovereignty over matters not expressly reserved to the legislative, executive and judicial bodies of the Federal Republic.

The *Grundgesetz* provides for a Federal President (*Bundespräsident*), two Houses of Parliament (the Bundestag and the Bundesrat, the latter consisting of representatives of the 16 Länder governments), a Chancellor (*Bundeskanzler*) and a Federal Constitutional Court (*Bundesverfassungsgericht*). The Chancellor heads the Federal Government (*Bundesregierung*), consisting of the Chancellor and the Federal Ministers. The *Bundespräsident* acts as head of state.

General elections for the Bundestag are generally held every four years on the basis of an electoral system of proportional representation. The most recent general election to the 21st Bundestag was held approximately seven months earlier than initially planned on February 23, 2025, following the termination of the previous governing coalition and the decision of the *Bundespräsident* to dissolve the 20th Bundestag at the proposal of the *Bundeskanzler* on December 27, 2024.

*Sources: The Federal Returning Officer, Bundestag Election 2025, Election to the 21st German Bundestag on 23 February 2025 (https://www.bundeswahlleiterin.de/en/info/presse/mitteilungen/bundestagswahl-2021/52_21_endgueltiges-ergebnis.html).* 

A political party is not entitled to party representation in the Bundestag unless it receives at least 5% of the votes cast or three direct mandates, awarded to the candidate with the most votes in a given electoral district, in a general election. Upon proposal by the *Bundespräsident*, the Chancellor is elected by and is responsible to the Bundestag.

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**Political Parties** 

The political parties currently represented in the Bundestag are: the Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU); the Alternative for Germany (AfD); the Social Democratic Party (SPD); the Greens (Bündnis 90/Die Grünen); the Left-Wing Party (Die Linke) and the Südschleswigscher Wählerverband (SSW), which participates in the distribution of seats of the Bundestag as a party representing the Danish minority in the Federal State of Schleswig-Holstein, to which the threshold of five percent of votes cast or three direct mandates for participation in the Bundestag does not apply.

Since 1949, the Federal Republic has been governed by ten Chancellors over 21 electoral periods. The most recent general election, held on February 23, 2025, resulted in a coalition between CDU/CSU and SPD. On May 6, 2025 the Bundestag elected Friedrich Merz (CDU) Chancellor for the first time.

*Sources: "Verantwortung für Deutschland" – Koalitionsvertrag zwischen CDU, CSU und SPD (https://www.spd.de/regierungsbildung); Deutscher Bundestag, Friedrich Merz mit 325 Stimmen zum Bundeskanzler gewählt (https://www.bundestag.de/dokumente/textarchiv/2025/kw19-de-kanzlerwahl-1062470)* 

The following table shows the results of the five most recent general elections for the Bundestag.

ELECTION RESULTS TO THE GERMAN BUNDESTAG

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2025<br>Elections | 2025<br>Elections | 2021<br>Elections | 2021<br>Elections | 2017<br>Elections | 2017<br>Elections | 2013<br>Elections | 2013<br>Elections | 2009<br>Elections | 2009<br>Elections |
|  | **% of**<br>**Votes** | **Seats** | **% of**<br>**Votes** | **Seats** | **% of**<br>**Votes** | **Seats** | **% of**<br>**Votes** | **Seats** | **% of**<br>**Votes** | **Seats** |
|  CDU/CSU | 28.6 | 208 | 24.2 | 197 | 33.0 | 246 | 41.5 | 311 | 33.8 | 239 |
|  AfD | 20.8 | 152 | 10.4 | 83 | 12.6 | 94 | 4.7 |  |  |  |
|  SPD | 16.4 | 120 | 25.7 | 206 | 20.5 | 153 | 25.7 | 193 | 23.0 | 146 |
|  Bündnis 90/Die Grünen | 11.6 | 85 | 14.7 | 118 | 8.9 | 67 | 8.4 | 63 | 10.7 | 68 |
|  Die Linke | 8.8 | 64 | 4.9 | 39 | 9.2 | 69 | 8.6 | 64 | 11.9 | 76 |
|  SSW<sup>(1)</sup> | 0.2 | 1 | 0.1 | 1 |  |  |  |  |  |  |
|  FDP | 4.3 |  | 11.4 | 91 | 10.7 | 80 | 4.8 |  | 14.6 | 93 |
|  Others | 9.4 |  | 8.6 |  | 5.0 |  | 6.2 |  | 6.0 |  |
|  **Total** |  | **630** |  | **735** |  | **709** |  | **631** |  | **622** |

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(1) SSW (*Südschleswigscher Wählerverband*), representing the Danish minority in the federal state of
Schleswig-Holstein, is exempt from the threshold of five percent of votes cast or three direct mandates for representation in the Bundestag.

*Sources: The Federal Returning Officer, Bundestag election 2025 (https://www.bundeswahlleiterin.de/en/bundestagswahlen/2025/ergebnisse/bund-99.html); The Federal Returning Officer, Bundestag Election 2021 (Repeat election in parts of Berlin on 11 February 2024), Results (https://www.bundeswahlleiterin.de/en/info/presse/mitteilungen/bundestagswahl-2021/52_21_endgueltiges-ergebnis.html);The Federal Returning Officer, Bundestag election 2017, Results (https://www.bundeswahlleiterin.de/bundestagswahlen/2017/ergebnisse/bund-99.html); The Federal Returning Officer, Bundestag election 2013, Results, Germany (http://www.bundeswahlleiterin.de/en/bundestagswahlen/2017/ergebnisse/bund-99.html); The Federal Returning Officer, Bundestag election 2009, Election to the 17th German Bundestag on 27 September 2009 (https://www.bundeswahlleiterin.de/en/bundestagswahlen/2009.html).* 

**International Organizations** 

In addition to the EU, the Federal Republic is a member of various major multilateral institutions, including the United Nations, the International Monetary Fund ("IMF"), the International Bank for Reconstruction and Development and the International Development Association, the Council of Europe, the Organization for Economic Cooperation and Development and the North Atlantic Treaty Organization ("NATO"). Furthermore, the Federal Republic is a signatory to the General Agreement on Tariffs and Trade and a member of the World Trade Organization ("WTO"). It is also a shareholder of, among others, the European Investment Bank ("EIB"), the European Bank for Reconstruction and Development, the Asian Infrastructure Investment Bank and the European Atomic Energy Community.

**The European Union and European Integration** 

The Federal Republic was one of the six founding members of the European Coal and Steel Community in 1951, which later developed into the EU. Since its foundation, the EU has grown considerably. Following the withdrawal of the United Kingdom from the EU on January 31, 2020, 27 countries currently form part of the EU. These include Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain and Sweden (together, the "EU Member States").

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According to provisional data, the aggregate population of the 27 EU Member States was approximately 450 million as of January 1, 2025. Active formal accession negotiations are currently being conducted with Montenegro, Serbia, Albania, North Macedonia, Ukraine, Moldova and Bosnia and Herzegovina.

While Türkiye is a key strategic partner of the EU on issues including migration, security, counter-terrorism, and trade, accession negotiations with Türkiye have not progressed in recent years. Kosovo applied for EU membership in December 2022 and remains a potential candidate. In December 2023 the European Council decided to open accession negotiations with the candidate country Ukraine. In addition, in 2023 Georgia was granted candidate status by the European Council, on the understanding that it will take relevant steps, as set out in the European Commission recommendation dated November 2023. In December 2024 the European Council suspended the EU accession process as the Georgian government showed insufficient political commitment. In March and June 2024 accession negotiations with the candidate countries Bosnia and Herzegovina and Moldova were started.

In November 2023, the European Commission adopted the Growth Plan for the Western Balkans to accelerate the accession process of the Western Balkans. In October 2024, the European Commission approved the Reform Agendas of Albania, Kosovo, Montenegro, North Macedonia and Serbia, which qualified these countries for the Growth Plan's benefits ahead of their full integration into the EU. Funds under the Reform and Growth Facility for the Western Balkans were disbursed to Albania, Moldova, Montenegro, North Macedonia in Fall 2025 and to Serbia in January 2026.

*Sources: European Union, Principles, countries, history, History of the EU (https://european-union.europa.eu/principles-countries-history/history-eu_en); European Union Principles, countries, history, History of the EU, History of the European Union 1945-59 (https://european-union.europa.eu/principles-countries-history/history-eu/1945-59_en); European Union, Principles, countries, history, EU countries (https://european-union.europa.eu/principles-countries-history/eu-countries_en#the-27-member-countries-of-the-eu); Statistical Office of the European Communities, Total population (https://ec.europa.eu/eurostat/databrowser/view/tps00001/default/table?lang=en);European Commission, Enlargement Policy (https://enlargement.ec.europa.eu/enlargement-policy_en), European Commission, Enlargement, Bosnia and Herzegovina (https://enlargement.ec.europa.eu/countries/bosnia-and-herzegovina_en); European Commission, Enlargement, Kosovo* 

*(https://enlargement.ec.europa.eu/enlargement-policy/kosovo_en), European Commission, Enlargement Policy, Growth Plan for the Western Balkans* 

*(https://enlargement.ec.europa.eu/enlargement-policy/growth-plan-western-balkans_en).* 

***Political Integration***

The EU is based on treaties that are binding agreements between the EU Member States and have been approved voluntarily and democratically by all EU Member States. The treaties set out the EU's objectives, the rules governing the EU institutions, the way decisions are taken and the relationship between the EU and the EU Member States. Treaties are amended from time to time to make the EU more efficient and transparent, to prepare for the accession of candidate countries as new EU Member States and to introduce new areas of cooperation. Under the treaties currently in place, EU institutions can adopt legislation, which, depending on the subject matter, either becomes directly applicable law or requires further implementation by the EU Member States.

The EU's three main institutions are the Council of the EU (representing the governments of the EU Member States) (the "Council"), the Parliament (elected by and representing the citizens of the EU Member States) and the European Commission (the executive body of the EU). In addition, the European Council, which consists of the heads of state or government of the EU Member States, the European Council President and the President of the European Commission, defines the EU's overall political direction and priorities. It is not one of the EU's legislating institutions, but rather sets the EU's policy agenda, traditionally by adopting conclusions during European Council meetings which identify issues of concern and actions to take.

Article 50 of the Treaty on European Union provides for a mechanism for the voluntary and unilateral withdrawal of an EU Member State from the EU. Pursuant to Article 50, the withdrawal process is initiated by a notification from the EU Member State wishing to withdraw to the European Council. The EU treaties cease to apply to an EU Member State from the later of the date of entry into force of an agreement setting out arrangements for the EU Member State's withdrawal, or within two years of the notification of the withdrawal. The European Council may, in agreement with the EU Member State concerned, unanimously decide to extend the period beyond two years.

***EU Sanctions***. Restrictive measures, also known as sanctions, are an essential tool of the EU's Common Foreign and Security Policy. All restrictive measures adopted by the EU are fully compliant with its obligations under international law, including those pertaining to human rights and fundamental freedoms. The first step in adopting restrictive measures is through a proposal by the High Representative of the Union for Foreign Affairs and Security Policy. The Common Foreign and Security Policy Council resolves thereafter on any restrictive measures by way of a decision binding on EU Member States. Any restrictive measures which include economic or financial sanctions additionally require the adoption of an accompanying Council regulation. Regulations are directly applicable within the EU and are binding on individuals and entities, including economic operators. Decisions and regulations on sanctions must be adopted unanimously by the Council. The regulation defines the precise scope of the measures and details of their implementation. In April 2024, the Council gave final approval to introduce criminal offences and penalties for EU sanctions' violation. This policy change gained particular traction in the context of Russia's invasion of Ukraine.

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As part of the EU response to Russia's invasion of Ukraine, the EU adopted a set of comprehensive restrictive measures against Russia and Russian individuals in addition to the prior sanctions that were imposed after the illegal annexation of Crimea in 2014. In addition, sanctions were issued against Belarus in response to their involvement in this invasion and against Iran in relation to the manufacturing and supply of drones as well as North Korea in response to its nuclear- and ballistic missile-related activities and its military support. The sanctions imposed comprise, among others, individual and economic sanctions. In March 2026, 1,985 Russian individuals, including Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov, and 687 entities were subjected to an asset freeze and/or a travel ban because their actions undermined Ukraine's territorial integrity, sovereignty and independence. The lists of sanctioned persons and entities are kept under constant review and are subject to periodic renewals by the Council. The economic sanctions, which target exchanges with Russia and Belarus and Iran in specific economic sectors, include restricted access to EU capital markets for certain Russian banks and companies, a ban on transactions with the Russian Central Bank and the Central Bank of Belarus, a ban of a number of Russian and Belarusian banks from the SWIFT messaging network, a prohibition on the provision of euro-denominated banknotes to Russia and Belarus, a prohibition on the provision of crypto-wallets to Russia, a prohibition on the use the Russian 'system for Transfer of Financial Messages', a ban on coal and other solid-fossil-fuel imports from Russia, a dynamic price cap related to the maritime transport of crude oil, a ban on use of EU airspace and EU airports by Russian-owned, Russian-registered or Russian-controlled aircraft, a ban on exports to and imports from Russia of raw materials, goods and technology in various sectors, a ban on exports to Russia of dual-use goods, an export and import ban on arms and a prohibition on the provision of certain services to Russia or Russian persons, including the provision of software for the management of enterprises. The EU has introduced a ban on access to EU ports for vessels to prevent the circumvention of sanctions. In December 2025 the Council prohibited the transfers of immobilized Central Bank of Russia assets back to Russia and allowed for an unlimited asset freeze.

*Sources: European Commission, Europe in 12 lessons by Pascal Fontaine* 

*(https://op.europa.eu/en/publication-detail/-/publication/a5ba73c6-3c6a-11e8-b5fe-01aa75ed71a1); EUR-Lex, Treaties currently in force (https://eur-lex.europa.eu/collection/eu-law/treaties/treaties-force.html); European Council, Council of the European Union, The European Council (https://www.consilium.europa.eu/en/european-council/) EUR-Lex, Consolidated versions of the Treaty on European Union, Article 50 (https://eur-lex.europa.eu/eli/treaty/teu_2016/art_50/oj); European Council, Council of the European Union, Policies, Why the EU adopts sanctions, accessed on March 5, 2026 (https://www.consilium.europa.eu/en/policies/why-sanctions/); European Council, Council of the European Union, Policies, EU sanctions against Russia (https://www.consilium.europa.eu/en/policies/sanctions-against-russia/); European Council, Council of the European Union, Policies, Russia's war of aggression against Ukraine: Council sanctions 9 shadow fleet enablers (https://www.consilium.europa.eu/en/press/press-releases/2025/12/15/russia-s-war-of-aggression-against-ukraine-council-sanctions-9-shadow-fleet-enablers/); European Council, Council of the European Union, Policies, EU sanctions against Belarus (https://www.consilium.europa.eu/en/policies/sanctions-against-belarus/); European Council, Council of the European Union, Policies, EU sanctions against Iran (https://www.consilium.europa.eu/en/policies/sanctions-against-iran/); European Council, Council of the European Union, Policies, EU sanctions against North Korea (https://www.consilium.europa.eu/en/policies/sanctions-against-north-korea/); European Commission, EU adopts 18th package of sanctions against Russian (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1840); European Council, Council of the European Union, Council decides to prohibit transfers of immobilised Central Bank of Russia assets back to Russia* 

*(https://www.consilium.europa.eu/en/press/press-releases/2025/12/12/council-decides-to-prohibit-transfers-of-immobilised-central-bank-of-russia-assets-back-to-russia/)* 

***Economic Integration***

From its inception, the EU has had the fundamental objective, in line with its predecessors, of economic integration of its member states. After a long process, a single market that provides for the free movement of goods and services, persons and capital among the EU Member States was established as of January 1, 1993. The integration of the EU Member States' economies and the completion of a single market are also promoted by a European competition policy, which aims at creating a level-playing field for EU Member States' companies, thereby promoting economic efficiency, and by a European consumer policy. In addition, various liberalization and harmonization measures are being implemented, for example in the telecommunication and energy sectors. In the financial sector, the single market has been fostered by providing for the free movement of capital and the freedom to perform banking services throughout the EU under the "single passport," which enables financial institutions to provide financial services throughout the EU based on a single license obtained in one EU Member State. The EU promotes economic integration with regional aid, which is designed to focus development efforts on certain disadvantaged regions and sections of population of the EU. Another important policy area for the EU has been agriculture and fisheries.

***State Aid***. EU Member States may generally only grant state aid to companies within the narrow framework of the EU's regulations and procedures on state aid in order to safeguard a level playing field within the single market. Nevertheless, state aid is permissible for Important Projects of Common European Interest ("IPCEI") if the European Commission approves that the positive effects of state aid outweigh its distortive effects. IPCEI are large-scale, cross-border projects that address a market failure or systemic challenge by fostering breakthrough innovation or strategic infrastructure with significant benefits for the entire European Union. In addition, to enable EU Member States to support their national economies in the development of clean energy, industrial decarbonization and clean technology, the European Commission adopted a new framework for state aid measures accompanying the Clean Industrial Deal ("Clean Industrial Deal State Aid Framework") in June 2025. This framework replaced the Temporary Crisis and Transition Framework that was adopted in the context of Russia's invasion of Ukraine. The Clean Industrial Deal State Aid Framework, with a maturity until the end of 2030, provides for several types of aid that may be granted by the EU Member States to accelerate decarbonization and enhance the competitiveness of the European Union. It allows for the provision of liquidity support in the form of state guarantees and subsidized loans, which help ensure that sufficient liquidity remains available to businesses. In particular, state aid may be granted to accelerate the roll-out of renewable energy, to support electricity costs for energy-intensive users and to decarbonize industrial production processes.

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***The EU Budget and the EU Recovery Instrument***. The EU's expenditures are governed by a long-term budget, also referred to as multiannual financial framework ("MFF"). The MFF is meant to ensure that the EU's expenditures develop in an orderly manner and within the limits of its own resources. It aims to align spending with policy priorities, to increase predictability of EU finances for co-financers and beneficiaries, to ensure EU budgetary discipline and to facilitate the adoption of the annual EU budget. It sets overall spending limits by determining annual maximum amounts for commitment appropriations, which cover commitments made to spend funds over one or more years in certain expenditure categories and for payment appropriations.

The regulation laying down the MFF of the EU for the years 2021 to 2027 was formally adopted in December 2020. The long-term EU budget provides EUR 1,216 billion (in current prices) in commitment appropriations. The temporary extraordinary Next Generation EU recovery instrument (the "EU Recovery Instrument") amounts up to EUR 807 billion (in current prices), which is specifically aimed at addressing the socioeconomic consequences of the COVID-19 pandemic. Together with the EUR 64.6 billion to finance EU priorities following the 2024 revisions, this allows the EU to provide an unprecedented amount of approximately EUR 2.07 trillion to help repair the economic and social damage caused by the COVID-19 pandemic in Europe and support the transition towards a modern and more sustainable Europe, including the green and digital transitions. In September 2025 the Commission presented its proposal for the next MFF for the years 2028-2034, amounting to almost EUR 2,000 billion. The new MFF aims to streamline EU funding by consolidating the number of financial programs and increasing flexibility to react faster to unexpected crises. It focuses on boosting European competitiveness through strategic investments in clean technology and simplified national partnership plans for targeted regional impact. Discussions on the proposals have progressed at both technical and political levels in the General Affairs Council, with adoption targeted for the end of 2026.

The most important component of the EU Recovery Instrument is the Recovery and Resilience Facility ("RRF"), with up to EUR 577 billion (in current prices) in loans and grants available to support reforms and investments undertaken by the EU Member States. The balance of the funds under the EU Recovery Instrument is being employed through existing EU instruments and assistance programs. To access the RRF, EU Member States are required to submit national recovery and resilience plans which are assessed by the European Commission and then approved by the Council of the EU on a case-by-case basis. An EU Member State may request further disbursements up to twice a year upon reaching certain agreed milestones and targets. Under the RRF, all milestones must be achieved by 31 August 2026, with the final disbursements by the European Commission to be completed by 31 December 2026. As of March 2026, the European Commission had disbursed EUR 395.5 billion to EU Member States under the RRF, thereof EUR 239 billion were in the form of grants and EUR 156.5 billion in the form of loans. In February 2023, the European Parliament and the Council adopted an amending regulation to include REPowerEU chapters in the RRF. The purpose of REPowerEU is to strengthen the strategic autonomy of the EU by diversifying its energy supplies and ending its dependency on Russian fossil fuel imports in response to the energy crisis of 2022. The 2026 EU budget, which was adopted by the Council and the European Parliament in November 2025, amounts to EUR 192.8 billion in commitment appropriations and EUR 190.1 billion in payment appropriations.

To implement the EU Recovery Instrument, the EU's Own Resources Decision, which defines how the EU budget is financed and was adopted by the Council on December 14, 2020, pursuant to the special legislative procedure applicable thereto, was ratified by all EU Member States in accordance with their own constitutional requirements. Under the Own Resources Decision, the European Commission is authorized, on an exceptional basis, to temporarily borrow up to EUR 750 billion (in 2018 prices) on the capital markets. In June 2023, the Commission proposed to amend the Own Resources Decision to include revenues from emissions trading, resources generated via the carbon border adjustment mechanism, which aims to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries, and temporary statistical own resources based on company profits. In July 2025 the European Commission proposed to amend the system of own resources by additional resources including an annual lump-sum contribution from companies tax resident in the EU, pending Council approval since then. In first half of 2025, the Commission raised EUR 85.8 billion via long-term EU bonds. While the proceeds from the EU bonds mainly benefited the EU Recovery Instrument, EUR 3.1 billion were used for the disbursement under the Ukraine facility and EUR 7 billion under the macro-financial assistance (MFA) under the G7 ERA initiative. At the end June 2025, the overall outstanding amount of EU bonds reached EUR 661.2 billion, of which EUR 75.1 billion were raised through NextGenerationEU green bonds. In addition, EUR 75.1 billion of short-term debt in EU bills was outstanding. The European Commission has announced plans to issue long-term EU bonds in an amount of EUR 70 billion in second half of 2025, to be complemented by short-term EU bills.

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*Sources: European Commission, Europe in 12 lessons by Pascal Fontaine (https://op.europa.eu/en/publication-detail/-/publication/a5ba73c6-3c6a-11e8-b5fe-01aa75ed71a1); European Banking Authority, Regulation and policy, Passporting and supervision of branches (https://eba.europa.eu/regulation-and-policy/passporting-and-supervision-branches); European Commission, Competition Policy, State Aid (https://competition-policy.ec.europa.eu/state-aid_en); European Commission, Competition Policy, State Aid, Important Projects of Common European Interest (IPCEI) (https://competition-policy.ec.europa.eu/state-aid/ipcei_en); European Commission, Competition Policy, State Aid, Clean Industrial Deal State Aid Framework (CISAF) (https://competition-policy.ec.europa.eu/about/contribution-clean-just-and-competitive-transition/clean-industrial-deal-state-aid-framework-cisaf_en); European Council, Council of the European Union, Policies, The EU's annual budget (https://www.consilium.europa.eu/en/policies/eu-annual-budget/); European Council, Council of the European Union, Policies, The EU long-term budget (The EU long-term budget), Timeline - EU long-term budget 2021-2027 (https://www.consilium.europa.eu/en/policies/eu-long-term-budget/timeline-long-term-eu-budget-2021-2027/); European Commission, The 2021-2027 EU budget – What's new? (https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/whats-new_en#revision-of-the-eu-budget-2021-2027); European Council, Council of the European Union, The EU long-term budget (https://www.consilium.europa.eu/en/policies/eu-long-term-budget/);European Commission, Strategy and policy, EU budget, The 2028-2034 EU budget for a stronger Europe (https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/eu-budget-2028-2034_en); European Commission, Strategy and policy, Recovery Plan for Europe (https://commission.europa.eu/strategy-and-policy/recovery-plan-europe_en); European Council, Council Decision (EU, Euratom) 2020/2053 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32020D2053); European Union, Proposal for a COUNCIL DECISION on the system of own resources of the European Union and repealing Decision (EU, Euratom) 2020/2053 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52025PC0574&qid=1753797262498); European Commission, Revenue, The next generation of EU own resources (https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/revenue/next-generation-eu-own-resources_en); European Commission, Recovery and Resilience Scoreboard(https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard/index.html); European Commission, Business, Economy, Euro, Economic recovery, Recovery and Resilience Facility (https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en); European Council, Council of the European Union, EU recovery plan: Council adopts REPowerEU, press release of February 21, 2023 (https://www.consilium.europa.eu/en/press/press-releases/2023/02/21/eu-recovery-plan-council-adopts-repowereu/); European Commission, REPowerEU (https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en); European Council, Council of the European Union, EU budget for 2026 (https://www.consilium.europa.eu/en/policies/eu-annual-budget/2026-budget/); Official Journal of the European Union, Definitive adoption (EU, Euratom) 2025/31 of the European Union's annual budget for the financial year 2026 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202600072); European Commission, Half-yearly report on the implementation of borrowing, debt management and related lending operations pursuant to Article 13 of Commission Implementing Decision C(2023)8010, September 24, 2025 (https://commission.europa.eu/document/download/7338c8a8-7a0d-4bae-8e7c-611503cce235_en?filename=H1%202025%20Half-yearly%20report%20on%20the%20implementation%20of%20borrowing%2C%20debt%20management%20and%20related%20lending%20operations.pdf); European Commission, Half-yearly report on the implementation of borrowing, debt management and related lending operations pursuant to Article 13 of Commission Implementing Decision C(2023)8010, September 24, 2025 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52025DC0588&qid=1773739968125).* 

***Trade***. The EU is responsible for trade matters with third-party countries. In the area of trade in goods, the EU has exclusive competence. Furthermore, the EU's responsibilities also cover trade in services, the commercial aspects of intellectual property (such as patents), public procurement and foreign direct investment, whereas in the case of portfolio investments, investment protection and investment dispute settlement, the competence is shared between the EU and the EU Member States.

In particular, the EU is responsible for negotiating and concluding international trade agreements as well as identifying trade barriers and unfair trade practices by trading partners and adopting appropriate countermeasures. Trade agreements are negotiated by the European Commission upon authorization of the Council. Once the European Commission completes negotiations, the Council and the European Parliament examine the final negotiated agreement and decide whether or not to approve it. Trade agreements regulating areas of mixed responsibility between the EU and the EU Member States can only be concluded after ratification by all EU Member States.

As part of the EU's response to Russia's Invasion of Ukraine, the EU has imposed comprehensive economic sanctions, including trade restrictions. For more information on the trade restrictions, see "Political Integration—EU Sanctions".

In December 2024, the European Commission reached a political agreement with the MERCOSUR countries Argentina, Brazil, Paraguay and Uruguay on increasing bilateral trade and investment by lowering tariff and non-tariff trade barriers, by creating more stable and predictable rules for trade and investment, and by fostering the sustainable development of both regions in terms of climate change and social standards. Additionally, the MERCOSUR deal was extended by bilateral safeguards to strengthen protections for EU farmers. On 17 January 2026, the European Union and MERCOSUR signed the Partnership Agreement (EMPA) and the Interim Trade Agreement (iTA). MERCOSUR represents a significant market for the EU, with goods exports amounting to EUR 55.2 billion and EUR 29.2 billion in services. In February 2026, the Commission announced it would proceed with the provisional application of the agreement, as authorized by the Council of the European Union, while the ratification of the agreement by the European Parliament is pending, awaiting a legal opinion from the European Court of Justice.

In January 2026, the EU and India concluded the largest Free Trade Agreement ever concluded by either side. The deal reduces tariffs in value of 96.6% of EU goods exports to India and privileged access to the Indian services market. Trade in services between the EU and India reached EUR 59.7 billion in 2023, up from EUR 30.4 billion in 2020.

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The European Union and the United States have the world's largest bilateral trade, with trade in goods and services of EUR 1.6 trillion (in 2023). Under his "America First" agenda, US President Trump introduced restrictive trade measures on certain European exports during the first half of 2025. However, in July 2025, the EU and the United States reached a trade agreement, reaffirming in a joint statement their commitment to a reciprocal, fair, and balanced trade relationship. The Framework Agreement will now be incorporated into EU law, pending final approval by the European Parliament. Following the United States Supreme Court ruling in February 2026, which declared the use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs illegal, the EU paused legislative work on the trade deal. On March 26, 2026 the European Parliament resumed the process under the condition of additional safeguards. These include a "sunrise clause", ensuring that the EU will reduce tariffs on U.S. imports only when the United States has fulfilled its own commitments.

In March 2026, the European Union and Australia concluded negotiations for a free trade agreement, alongside the adoption of a new security and defense partnership. The deal is the latest addition to the EU's agreements with the strategic Indo-Pacific region. Beyond trade liberalization, the deal secures the EU access to critical raw materials, bolstering the resilience of European supply chains against global instability. The agreement is currently entering the beginning of the ratification process.

*Sources: European Commission, EU trade relationships by country/region, Making trade policy (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/making-trade-policy_en); European Commission, Trade and Economic Security, EU-Mercosur agreement (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/mercosur/eu-mercosur-agreement_en); European Commission, Trade and Economic Security, Questions and answers on the EU-Mercosur partnership agreement \* (https://ec.europa.eu/commission/presscorner/detail/en/qanda_24_6245); European Commission, Trade, The EU-Mercosur trade agreement (https://commission.europa.eu/topics/trade/eu-mercosur-trade-agreement_en); European Commission, Trade and Economic Security, EU-India agreements (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements_en); European Commission, EU and India conclude landmark Free Trade Agreement, press release from January 27, 2026 (t); European Commission, Trade and Economic Security, United States (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en); European Commission, Memo on EU countermeasures on US tariffs, EU countermeasures on US steel and aluminum tariffs explained (https://ec.europa.eu/commission/presscorner/detail/en/qanda_25_750); The White House, President Donald J. Trump on Trade, Fact Sheet, February 13, 2025 (https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-announces-fair-and-reciprocal-plan-on-trade/); The White House, President Donald J. Trump on Trade, Fact Sheet, April 2, 2025 (https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-<br>sovereignty-and-strengthen-our-national-and-economic-security/); European Commission, Statement by President von der Leyen on the deal on tariffs and trade with the United States, press release from July 27, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/statement_25_1915); European Commission, Trade and Economic Security, Joint Statement on a United States-European Union framework on an agreement on reciprocal, fair and balanced trade from August 21, 2025 (https://policy.trade.ec.europa.eu/news/joint-statement-united-states-european-union-framework-agreement-reciprocal-fair-and-balanced-trade-2025-08-21_en); European Parliament, News, EU–US trade legislation: legislative work on hold following US Supreme Court ruling (https://www.europarl.europa.eu/news/en/press-room/20260223IPR36005/eu-us-trade-legislation-legislative-work-on-hold-following-supreme-court-ruling); European Parliament, EU US trade deal: MEPs set conditions for lowering tariffs on US products, press release from March 26, 2026 (https://www.europarl.europa.eu/news/en/press-room/20260323IPR38830/eu-us-trade-deal-meps-set-conditions-for-lowering-tariffs-on-us-products); European Commission, EU and Australia strengthen relations with Security and Defence Partnership and Trade Agreement, press release from March 24, 2026 (https://ec.europa.eu/commission/presscorner/detail/en/ip_26_645); European Commission, Questions and answers on the EU-Australia Trade Agreement (https://ec.europa.eu/commission/presscorner/detail/en/qanda_26_648).* 

***EU Response to the Energy Crisis***. Since the fall of 2022, and significantly exacerbated by Russia's invasion of Ukraine, Europe has been facing an unprecedented energy crisis involving hikes in energy prices and disruptions to energy supply. In response, the EU Member States implemented several measures on the national and supranational levels to ensure affordable and competitive energy for EU consumers, increase the EU's energy security and preparedness in the event of emergencies, and strengthen the energy resilience and autonomy of EU Member States. In early 2022, the heads of the EU Member States had jointly decided to phase out the EU's dependency on Russian fossil fuels. In this context, the European Commission initiated the REPowerEU plan discussed above under "—The "EU Budget and the EU Recovery Instrument" put in place the Temporary Crisis and Transition Framework discussed above under "—State Aid". The joint action was successful. Several European emergency energy rules have therefore ended. For instance, the market correction mechanism, that was intended to limit episodes of extraordinarily high gas prices in the EU, and the emergency regulation for joint purchasing (Aggregate EU) of natural gas have ended. Aggregate EU has since been replaced by a permanent framework within the EU Energy and Raw Materials Platform to facilitate long-term demand aggregation. Other introduced measures have been extended to further secure the gas supply and strengthen energy market resilience , such as the measure for accelerating the deployment of renewable energy and the continuation of coordinated demand-reduction measures for gas. In July 2025, the Council agreed to a two-year extension of the gas reserve filling rules until the end of 2027, while enabling more flexibility to adapt to changing market conditions. In January 2026, the Council reaffirmed its commitment to fully phasing out imports of Russian LNG and pipeline gas by the end of 2026 and autumn 2027, respectively.

*Sources: European Council, Council of the European Union, Policies, Energy prices and security of supply, accessed on May 3, 2024 (https://www.consilium.europa.eu/en/policies/energy-prices-and-security-of-supply); European Commission, Energy, Actions and measures of energy supply (https://energy.ec.europa.eu/topics/markets-and-consumers/actions-and-measures-energy-prices_en#accelerating-renewables-permitting); European Council, Council of the European Union, Gas storage: Council greenlights 2-year extension of reserves filling rules to safeguard winter supply (https://www.consilium.europa.eu/en/press/press-releases/2025/07/18/gas-storage-council-greenlights-2-year-extension-of-reserves-filling-rules-to-safeguard-winter-supply/).* 

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***European Defense***. The changed security situation in Europe at the beginning of 2025 prompted the EU to strengthen its defense capabilities and enhance the readiness of the European defense industry over the long term. In March 2025 the European Commission and the High Representative for Foreign Affairs published a White Paper for European Defense that sets out a vision to significantly foster European defense readiness. The White Paper is backed by the ReArm Europe Plan/Readiness 2030. The Plan outlines measures for mobilizing up to EUR 800 billion to support the defense investments of EU Member States. For creating a fiscal space of up to EUR 650 billion on the EU Member State level the Commission called for a coordinated activation of the national escape clause. See "EU Economic Governance – Stability and Growth Pact". In May 2025 the Council adopted a new EU financial instrument called Security Action for Europe ("SAFE") that is supposed to provide EU Member States with up to EUR 150 billion of loans backed by the headroom of the EU budget. The funds will be raised by the EU on capital markets to offer EU Member States loans with advantageous financing terms. SAFE is intended to support member states in making rapid and significant increases in their defense investments through common procurement. In February 2026, the Council authorized SAFE defense funding for 16 EU member states making EUR 14.4 billion available of pre-financing. As of March 2026, the Council is evaluating the national defense investment plans for another three countries. In addition, private capital will be mobilized by accelerating the Savings and Investment Union and through the European Investment Bank to support European rearmament. In addition, the Commission proposed in June 2025 a Defense Readiness Omnibus. This package contains measures that will help simplify rules to speed up the development of defense capabilities and infrastructure by Member States and industry awaiting enforcement. In December 2025, the Council adopted the European Defense Industry Program (EDIP) providing EUR 1.5 billion in EU grants for the period 2025-2027. EU member states have significantly increased their defense expenditure to EUR 381 billion in 2025, representing 2.1% of EU's GDP — up from 1.9% in 2024.

*Sources: European Commission, Future of European Defense, Acting on defence to protect Europeans (https://commission.europa.eu/topics/defence/future-european-defence_en); European Commission, Press statement by President von der Leyen on the defence package, press release from March 4, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/statement_25_673); European Council, Council of the European Union, Security Action for Europe (SAFE) (https://www.consilium.europa.eu/en/policies/safe/); European Commission, Commission unveils Savings and Investments Union strategy to enhance financial opportunities for EU citizens and businesses, press release from March 19, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_802); European Council, Council of the European Union, European defence readiness(https://www.consilium.europa.eu/en/policies/european-defence-readiness/); European Council, Council of the European Union, EU defence in numbers (https://www.consilium.europa.eu/en/policies/defence-numbers/); European Council, Council of the European Union, SAFE: Council clears path for financial assistance to eight member states and concluding the Canada agreement (https://www.consilium.europa.eu/en/press/press-releases/2026/02/11/safe-council-clears-path-for-financial-assistance-to-eight-member-states-and-concluding-the-canada-agreement/)* 

***Monetary Integration***

The Federal Republic is a signatory to and has ratified the Treaty on European Union of February 1992 (also known as the "Maastricht Treaty"). The Maastricht Treaty was the basis for the establishment of the European Economic and Monetary Union ("EMU"). The EMU led, in turn, to the adoption of irrevocable conversion rates between the euro and the national currencies of the initial participating member states on December 31, 1998, and the introduction of the euro as the single European currency in the euro area on January 1, 1999. On January 1, 2002, banknotes and coins denominated in euro were introduced as legal tender to replace the national currencies in the twelve member states forming the euro area at that time (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain). Slovenia, Malta, Cyprus, Slovakia, Estonia, Latvia, Lithuania and Croatia subsequently joined the euro area. On January 1 2026, Bulgaria joined as newest member the euro area.

The ECB was established on June 1, 1998, as part of the European System of Central Banks ("ESCB"). According to the Maastricht Treaty, the primary objective of the ESCB is to maintain price stability. Without prejudice to the objective of price stability, the ESCB supports the general economic policies of the EU. See "—Monetary and Financial System" for more information on the ECB and ESCB as well as on the European financial system. The Eurosystem, consisting of the ECB and the national central banks of those EU Member States whose currency is the euro ("Euro Area Member States"), assumed sole responsibility for the monetary policy in the euro area on January 1, 1999.

*Sources: European Union, Principles, countries, history, Principles and values, Founding agreements, Treaty on European Union – Maastricht Treaty (https://european-union.europa.eu/principles-countries-history/principles-and-values/founding-agreements_en); European Central Bank, About us, Our history, arts and culture, Our history, Economic and Monetary Union (EMU) (https://www.ecb.europa.eu/ecb/history-arts-culture/history/emu/html/index.en.html); European Central Bank, The euro, Our money (https://www.ecb.europa.eu/euro/intro/html/index.en.html); European Central Bank, Monthly Bulletin, 10th Anniversary of the ECB (https://www.ecb.europa.eu/pub/pdf/other/10thanniversaryoftheecbmb200806en.pdf).* 

***EU Economic Governance***

The EU economic governance framework aims to detect, prevent and correct problematic economic trends such as excessive government deficits or public debt levels, which can stunt growth and put economies at risk. The framework consists of the following main components.

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***Stability and Growth Pact***. To strengthen the monitoring and coordination of national fiscal and economic policies, the EU Member States established the Stability and Growth Pact ("SGP") in 1997. In February 2024, the European Parliament and Council agreed to reform the economic governance rules of the SGP, based on a March 2023 proposal by the European Commission. The main objective of the new framework is to strengthen the EU Member States' sound finances, debt sustainability and promote sustainable and inclusive growth. Under the new framework, EU Member States are given a timeframe within which, through a combination of fiscal adjustment, growth-enhancing reforms and priority investments, their debt level is to be put on a sufficiently downward path. The SGP reference values of 3% for the GDP budget deficit and 60% for the GDP debt level remain in force. The new rules were adopted by the Parliament on April 23, 2024 and by the Council of the EU on April 29, 2024. They came into effect with their publication in the Official Journal of the EU on April 30, 2024.

As of 2025, fiscal surveillance is fully governed by the reformed framework, with the newly established medium-term fiscal-structural plans and their respective net expenditure paths serving as the primary basis for monitoring and enforcement.

The new framework requires EU Member States to set up a medium-term fiscal-structural plan for the next four or five years, the so-called adjustment period is extendable to up to seven years. The net expenditure path is intended to be the single operational indicator for the national plans. After the initial submission of the medium-term fiscal structural plans, the plans will be assessed by the European Commission and endorsed by the Council. Every April, EU Member States will be required to submit a progress report on the medium-term structural plan, which replaces the Stability and Convergence Programmes of the SGP. In addition, to ensure the coordination of fiscal policies among Euro Area Member States, governments are required by European economic governance rules to submit their draft budgetary plans for the following year to the European Commission by October 15 of each year. The European Commission will then assess whether the Members States' draft budgetary plans are consistent with their net expenditure paths, pursuant to the new regulation.

The preventive arm of the SGP binds EU Member States to their commitments towards sound fiscal policies. In this respect the new framework introduces risk-based surveillance which differentiates between EU Member States and their fiscal situation. For EU Member States with a government deficit greater than 3% of GDP or a public debt level greater than 60% of GDP, the European Commission will issue a country-specific "reference trajectory" and a corresponding level of the structural primary balance to be reached by the end of the adjustment process. This primary structural balance target is defined as the cyclically adjusted general government balance net of temporary measures and net of interest expenditure. Quantitative safeguards are intended to ensure declining debt and to provide a safety margin below the Maastricht Treaty deficit reference value of 3% of GDP in order to create fiscal buffers. Thus, the new rules replace the 1/20 debt reduction requirement for EU Member States with a debt level above 60% of GDP.

The corrective arm of the SGP consists of the excessive deficit procedure ("EDP"). The EDP ensures the correction of excessive budget deficits (defined as a deficit greater than 3% of GDP), excessive public debt levels (defined as a debt ratio greater than 60% of GDP without an adequate diminishing trend) or excessive control account deviations (defined as deviations from the "reference trajectory" in the EU Member State's net expenditure). EU Member States that fail to respect the SGP's preventive or corrective rules may ultimately face sanctions. For Euro Area Member States, these could take the form of warnings and financial sanctions including fines. In addition, all EU Member States could face a suspension of commitments or payments from the EU's structural and investment funds if they fail to abide by the corrective rules. The SGP contains rules for exceptional situations. In particular, in case of an unusual event outside the control of the EU Member State concerned, which has a major impact on the financial position of its general government, or in periods of severe economic downturn for the euro area or the EU as a whole, upon proposal of the European Commission and endorsement of the Council, EU Member States are allowed to depart from the budgetary requirements that would normally apply, provided that this does not endanger fiscal sustainability in the medium-term. When applied in the case of a severe economic downturn for the euro area or the EU as a whole, this rule is referred to as the "general escape clause."

The "general escape clause" under the SGP was deactivated at the end of 2023, after having been activated in March 2020 to permit EU Member States to deal adequately with the effects of the COVID-19 pandemic and extended in May 2022 after Russia's invasion of Ukraine created downside risks to economic activity. As of March 2026, Austria, Belgium, Finland, France, Italy, Malta, Poland, Slovakia, Hungary and Romania are subject to an ongoing excessive deficit procedure.

In the context of the European Commission's ReArm Europe Plan/ Readiness 2030 the Commission invited the EU Member States to activate the national escape clause to accommodate increased defense expenditure within the SGP on March 19, 2025. The National Escape Clause allows an EU Member State to deviate from its net expenditure path as set by the Council in the context of its medium-term fiscal structural plan. The coordinated activation limits the deviation to up to a maximum of 1.5% of GDP for each year for a period of up to four years for defense related expenditure. According to the Commission's proposal, EU Member States' excess expenditure for defense takes into account the increase in defense expenditure since 2021. As of March 2026, the Council activated the flexibility in EU fiscal rules to increase defense spending for Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia, Slovenia, Germany and Austria. See also "—European Defense" and "—Public Finance—Germany's General Government Deficit/Surplus and General Government Gross Debt."

------

*Sources: European Commission, Economy and Finance, Economic and fiscal governance (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance_en); European Commission, Commission welcomes political agreement on a new economic governance framework fit for the future, press release of February 10, 2024 (https://ec.europa.eu/commission/presscorner/detail/en/ip_24_711); European Commission, Regulation of the European Parliament and the Council on the effective coordination of economic policies and the multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52023PC0240); European Commission, Vade Mecum on the Stability & Growth Pact 2019 edition, pages 25 and 44 (https://economy-finance.ec.europa.eu/system/files/2019-04/ip101_en.pdf); European Commission, Fiscal policy guidance for 2024: Promoting debt sustainability and sustainable and inclusive growth, press release of March 8, 2023 (https://ec.europa.eu/commission/presscorner/detail/%20en/ip_23_1410); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact_en); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact, Annual draft budgetary plans (DBPs) of euro area countries (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/annual-draft-budgetary-plans-dbps-euro-area-countries_en); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact, The preventive arm (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/preventive-arm_en); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact, The corrective arm / Excessive Deficit Procedure (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/corrective-arm-excessive-deficit-procedure_en); European Council, Council of the European Union, Statement of EU ministers of finance on the Stability and Growth Pact in light of the COVID-19 crisis, press release of March 23, 2020 (https://www.consilium.europa.eu/en/press/press-releases/2020/03/23/statement-of-eu-ministers-of-finance-on-the-stability-and-growth-pact-in-light-of-the-covid-19-crisis/); European Commission, 2022 European Semester - Spring Package, Communication from the Commission of May 23, 2022 (https://commission.europa.eu/system/files/2022-05/2022_european_semester_spring_package_communication_en.pdf); European Parliament, New EU fiscal rules approved by MEPs, press release of April 23, 2024 (https://www.europarl.europa.eu/news/en/press-room/20240419IPR20583/new-eu-fiscal-rules-approved-by-meps); European Council, Council of the European Union, Economic governance review: Council adopts reform of fiscal rules, press release of April 29, 2024 (https://www.consilium.europa.eu/en/press/press-releases/2024/04/29/economic-governance-review-council-adopts-reform-of-fiscal-rules/); EUR-Lex, Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (https://eur-lex.europa.eu/eli/reg/2024/1263/oj); EUR-Lex, Council Regulation (EU) 2024/1264 of 29 April 2024 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (https://eur-lex.europa.eu/eli/reg/2024/1264/oj); EUR-Lex, Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements for budgetary frameworks of the Member States (https://eur-lex.europa.eu/eli/dir/2024/1265/oj); European Commission, Commission unveils the White Paper for European Defence and the ReArm Europe Plan/Readiness 2030, press release of March 19, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_793); European Commission, Communication from the Commission (https://defence-industry-space.ec.europa.eu/document/download/a57304ce-1a98-4a2c-aed5-36485884f1a0_en?filename=Communication-on-the-national-escape-clause.pdf); European Council, Council of the European Union, National escape clause for defence expenditure (https://www.consilium.europa.eu/en/policies/national-escape-clause-for-defence-expenditure-nec/).* 

***Macroeconomic Imbalance Procedure***. Established in 2011, the macroeconomic imbalance procedure ("MIP") is a surveillance mechanism for the EU and the EU Member States that aims to identify potential economic risks early on, prevent the emergence of harmful macroeconomic imbalances and correct any existing excessive imbalances. EU Member States' medium-term fiscal-structural plans described above under "—Stability and Growth Pact" are required to ensure the delivery of investments and reforms to correct the imbalances identified under the MIP. The preventive arm of the procedure relies on an early warning system that uses a scoreboard of indicators and in-depth country reviews. This preventive arm allows the European Commission and the Council to provide preventive recommendations to the respective EU Member State at an early stage. In case of an EU Member State with excessive macroeconomic imbalances, the corrective arm may open an excessive imbalance procedure, under which the EU Member State concerned will have to submit a revised fiscal-structural plan and regular progress reports. The enforcement regime within the corrective arm comprises the option of imposing financial sanctions for Euro Area Member States, including fines of up to 0.1% of such Euro Area Member State's GDP, if a Euro Area Member State repeatedly does not comply with its obligations.

In the 2025 surveillance cycle, seven EU Member States, excluding Germany, were found to be experiencing imbalances or excessive imbalances. Consequently, during the 2026 surveillance cycle, these EU Member States, and additionally Estonia will be subject to an in-depth review in the context of the MIP (see also "—Stability and Growth Pact" and "—The Economy—International Economic Relations—Germany's Current Account Surplus and the Macroeconomic Imbalance Procedure").

*Sources: European Commission, Economy and Finance, Economic and fiscal governance, Macroeconomic Imbalance Procedure, Dealing with macroeconomic imbalances (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/macroeconomic-imbalance-procedure/dealing-macroeconomic-imbalances_en); European Commission, Publications, 2026 European Semester: Alert Mechanism report (https://commission.europa.eu/publications/2026-european-semester-alert-mechanism-report_en); European Commission, Regulation of the European Parliament and the Council on the effective coordination of economic policies and the multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52023PC0240).* 

***Financial Assistance in the EU***

EU countries experiencing or threatened by financing difficulties can request access to several financial assistance mechanisms. The main ones are described below.

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***Temporary Financial Stability Mechanism***. In May 2010, the EU and Euro Area Member States established a temporary stability mechanism to safeguard the financial stability amid severe tensions in euro area sovereign debt markets, consisting of the European Financial Stabilisation Mechanism ("EFSM") and the European Financial Stability Facility ("EFSF"). Through the EFSM the European Commission is allowed to borrow up to a total of EUR 60 billion on behalf of the EU under an implicit EU budget guarantee. The EFSF was created as a temporary institution and since July 1, 2013 no longer engages in new financing programs. As of March 2026, the EFSF had outstanding loans to Ireland, Portugal and Greece of approximately EUR 163 billion. Debt securities issued by the EFSF to finance these loans are backed by irrevocable and unconditional guarantees and over-guarantees extended by the Euro Area Member States. The Federal Republic accounts for approximately 29% of the guarantees according to the contribution key. The EFSF will be dissolved and liquidated when all financial assistance provided to Euro Area Member States and all funding instruments issued by the EFSF have been repaid in full.

*Sources: European Commission, Economy and Finance, EU financial assistance, How is financial assistance provided?(https://economy-finance.ec.europa.eu/eu-financial-assistance/how-financial-assistance-provided_en); European Commission, Economy and Finance, EU financial assistance, Euro area countries, European Financial Stabilisation Mechanism (EFSM) (https://economy-finance.ec.europa.eu/eu-financial-assistance/euro-area-countries/european-financial-stabilisation-mechanism-efsm_en); European Commission, Economy and Finance, EU financial assistance, Euro area countries, European Financial Stability Facility (EFSF) (https://economy-finance.ec.europa.eu/eu-financial-assistance/euro-area-countries/european-financial-stability-facility-efsf_en); European Stability Mechanism, Financial Assistance, Programme Database, Programme Overview (https://www.esm.europa.eu/financial-assistance/programme-database/programme-overview); European Stability Mechanism, Explainers, Guarantees by EFSF Countries (https://www.esm.europa.eu/about-us/explainers#guarantees-by-efsf-countries).* 

***European Stability Mechanism***. Since October 2012, the European Stability Mechanism ("ESM"), which was established as an intergovernmental organization under public international law by the Euro Area Member States, has been assisting in preserving the financial stability of the EMU. As of July 1, 2013, it assumed the tasks fulfilled by the EFSF and the EFSM and is currently the primary support mechanism for Euro Area Member States experiencing or threatened by severe financing problems, if such assistance is deemed essential to safeguard financial stability in the euro area as a whole. The ESM issues bonds or other debt instruments on the financial markets to raise capital to provide assistance, subject to certain conditions, to Euro Area Member States. Unlike the EFSF, which is based upon guarantees by Euro Area Member States, the ESM has total subscribed capital of EUR 708.5 billion provided by Euro Area Member States, which provides it with a lending capacity of EUR 500 billion. EUR 81 billion of the ESM's subscribed capital is in the form of paid-in capital with the balance of EUR 627.5 billion being callable capital. The contribution of each Euro Area Member State is based on the paid-in capital for the ECB. On this basis, the Federal Republic's contribution amounts to approximately 27% of the aggregate contributions to the ESM. The Federal Republic contributed approximately EUR 22 billion of paid-in capital to the ESM.

Financial assistance from the ESM is activated upon a request from a Euro Area Member State to the chairperson of the ESM's board of governors and is provided subject to strict conditions appropriate to the instrument chosen. The initial instruments available to the ESM have been modeled upon those available to the EFSF and include the extension of loans to a Euro Area Member State in financial difficulties, interventions in the primary and secondary debt markets, action based on a precautionary program, and the extension of loans to governments, or since December 2014 directly to affected financial institutions, for the purposes of recapitalizing financial institutions. Each instrument is to be linked to a memorandum of understanding which sets forth the conditions for financial support as well as the monitoring and surveillance procedures established to ensure the Euro Area Member State is progressing towards financial stability. In principle, decisions under the ESM are taken by mutual agreement. However, in the event that the European Commission and the ECB conclude that an urgent decision related to financial assistance is needed because the financial and economic sustainability of the euro area is threatened, the mutual agreement rule is replaced by a qualified majority of 85%. Given its voting rights of approximately 27%, the Federal Republic may veto any decision even under the emergency voting rule. As of March 2026, the ESM had loans in an aggregate principal amount of approximately EUR 72 billion outstanding to Spain, Cyprus and Greece.

*Sources: European Stability Mechanism, Who we are, History (https://www.esm.europa.eu/about-us/history); European Commission, Economy and Finance, EU financial assistance, Euro area countries, European Stability Mechanism (ESM) (https://economy-finance.ec.europa.eu/eu-financial-assistance/euro-area-countries/european-stability-mechanism-esm_en); European Stability Mechanism, Who we are (https://www.esm.europa.eu/about-us#headline-who_we_are); European Stability Mechanism, Explainers, The ESM, Capital Structure (https://www.esm.europa.eu/about-us/explainers#capital-structure); European Stability Mechanism, How we decide, ESM shareholders and their representatives in governing and oversight bodies (https://www.esm.europa.eu/about-us/governance#sharesandcapital); European Stability Mechanism, Explainers, The ESM, Basic information (https://www.esm.europa.eu/about-us/explainers#basic-information); European Stability Mechanism, Financial Assistance, Financial assistance instruments, Lending toolkit (https://www.esm.europa.eu/financial-assistance/lending-toolkit); European Stability Mechanism, Explainers, Lending, Policy conditions attached to loans (https://www.esm.europa.eu/about-us/explainers#are-policy-conditions-always-tied-to-esm-loans-); European Stability Mechanism, Explainers, The ESM, ESM decision making (https://www.esm.europa.eu/about-us/explainers#esm-decision-making); European Stability Mechanism, Financial Assistance, Programme Database, Programme Overview (https://www.esm.europa.eu/financial-assistance/programme-database/programme-overview).* 

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On January 27 and February 8, 2021, the Euro Area Member States signed an agreement amending the treaty establishing the ESM. The reform establishes a common backstop to the Single Resolution Fund ("SRF") in the form of a credit line from the ESM to replace the direct recapitalization instrument for financial institutions, providing a financial safety net for bank resolutions in the European banking union (the "Banking Union"), which will help to protect financial stability (see "—Monetary and Financial System—Financial System— European Financial System—European System of Financial Supervision and European Banking Union" for more information on the Banking Union and the SRF). The maximum amount of ESM loans to the SRF is set at EUR 68 billion. The credit line may only be used as a last resort and to the extent that it is fiscally neutral in the medium term, i.e., it is repaid through ex-post contributions by banks over a period of three to five years. Moreover, the revised ESM Treaty envisages the introduction of single-limb collective action clauses for bonds with maturities of more than a year issued by governments of Euro Area Member States, which, if required, would facilitate orderly and predictable sovereign debt restructuring. Furthermore, the reformed ESM Treaty enables the ESM to have a stronger role in future economic adjustment programs and crisis prevention. The reform clarified that ESM precautionary instruments provide support to Euro Area Member States with sound fundamentals that could be affected by an adverse shock beyond their control in order to safeguard the financial stability of the euro area as a whole. The enforcement of the reformed ESM Treaty however remains pending, until the parliaments of all Euro Area Member States have ratified the reformed ESM Treaty.

*Sources: ESM, About us, ESM Reform (https://www.esm.europa.eu/about-esm/esm-reform); ESM, About ESM, ESM Treaty Reform - Explainer (https://www.esm.europa.eu/about-esm/esm-treaty-reform-explainer#ui-id-5); European Union, Terms of Reference of the 2022 CAC (https://economic-financial-committee.europa.eu/system/files/2021-04/EA%20Model%20CAC%20-%20Draft%20Terms%20of%20Reference.pdf); ESM, ESM Treaty Reform – Explainer (https://www.esm.europa.eu/about-us/esm-reform/esm-treaty-reform-explainer); European Council, Council of the European Union, Documents & Publications, Agreement Amending the Treaty Establishing the European Stability Mechanism (ESM) (https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2019035&DocLanguage=en).* 

**Statistical Standards** 

***Statistical Standard for the National Accounts***

Since August 2014, the Federal Statistical Office has been calculating the German national accounts in accordance with the European System of National and Regional Accounts 2010 (ESA 2010) which, in turn, is based on the System of National Accounts (SNA 2008) of the United Nations. In 2024, a major revision of the National Accounts, harmonized Europe-wide, took place in Germany. The main purpose of the revision was to refine results by introducing new data sources, a new classification of private consumption expenditure and new calculation methods. The entire national accounting system was reviewed and revised and, where necessary, new findings were integrated into the calculations. To avoid breaks in time series, the results for Germany were recalculated from 1991 onwards. The revised results were published for the first time in July 2024.

*Sources: Statistisches Bundesamt, National Accounts, ESA 2010 methods and sources for the German GNI and its components, published on April 6, 2022 (https://www.destatis.de/EN/Themes/Economy/National-Accounts-Domestic-Product/Publications/Downloads-National-Accounts- Domestic-P<br>roduct/esa-2010-methods.html?nn=214136); Statistisches Bundesamt, National accounts, domestic product, Major Revision of National Accounts 2024<br> (https://www.destatis.de/EN/Themes/Economy/National-Accounts-Domestic-Product/InfoRevision2024.html).* 

***Statistical Standard for the Balance of Payments***

Since July 2014, the methodological concept of the German balance of payments statistics follows the sixth edition of the Balance of Payments and International Investment Position Manual ("BPM6"), the revised standard of the IMF. The application of BPM6 is binding for EU Member States by virtue of a regulation adopted by the European Commission. Balance of payments data since 1971 have been recalculated in accordance with BPM6. In July 2025 the IMF released the seventh edition of the Balance of Payments and International Investment Position Manual. Within the EU it is planned for its Member States to apply the new standards in the balance of payments in 2029.

*Source: Bundesbank, Statistics, External Sector, Balance of Payments, Methodological notes (https://www.bundesbank.de/en/statistics/external-sector/balance-of-payments/methodological-notes-794532); International Monetary Fund, Release of New Standards for Macroeconomic Statistics (BPM7) (https://www.imf.org/en/publications/policy-papers/issues/2025/07/10/release-of-new-standards-for-macroeconomic-statistics-bpm7-568453); Bundesbank, Update of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) (https://www.bundesbank.de/en/statistics/external-sector/external-sector/update-of-the-sixth-edition-of-the-balance-of-payments- <br>and-international-investment-position-manual-bpm6—845666).* 

***Statistical Disclosure Standards of the International Monetary Fund***

Since February 2015, the Federal Republic has met the Special Data Dissemination Standard Plus ("SDDS Plus") of the IMF relating to coverage, periodicity and timeliness of economic data. The SDDS Plus was created in 2012 as an extension of the existing Special Data Dissemination Standard. By providing comparable economic and financial data, it is designed to improve the transparency of the financial sector and its international interdependencies and thus contributes to the identification of risks at an early stage. Although adherence by member countries to the SDDS Plus is voluntary, it carries a commitment requiring members to observe the standard and to provide certain information to the IMF about their practices in disseminating economic and financial data.

*Source: Bundesbank, Statistics, Set of indicators, SDDS Plus (Special Data Dissemination Standard) (https://www.bundesbank.de/en/statistics/sets-of-indicators/sdds-plus/sdds-plus-795798).* 

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**THE ECONOMY** 

**Overview** 

Since 1945, the Federal Republic's economic system has developed into a social market economy, combining the free initiative of the individual with progressive social principles. The *Grundgesetz* guarantees freedom of private enterprise and private property, provided that these basic rights are not exercised against the public good. The state mainly has a regulatory function in the market economy, setting the general framework of conditions within which market processes take place.

**Key Economic Figures** 

The German economy is one of the world's largest economies, with an annual GDP of EUR 4,469.9 billion in 2025. In 2025, price-adjusted GDP increased by 0.2% against the backdrop of Russia's ongoing invasion of Ukraine and the tariffs imposed by the US. Compared to the level of 1991, which represents the first full year after German reunification on October 3, 1990, price-adjusted GDP increased by 48.3%. Productivity gains contributed to the growth in price-adjusted GDP since 1991, given that price-adjusted GDP per employee has risen by 25.4% since 1991. In calculating price-adjusted GDP, the Federal Statistical Office (*Statistisches Bundesamt*) uses a chain index based on the previous year's prices. In 2025, the GDP per capita at current prices was EUR 53,516 while the GDP per person employed at current prices was EUR 97,210.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Tables 2.1.1 and 2.1.4.* 

As in many advanced economies, the services sector of the Federal Republic has become the largest contributor to GDP (in terms of gross value added). In 2025, services accounted for 71.2% of gross value added, measured at current prices, compared to 62.2% in 1991. The two most important subsectors were "trade, transport, accommodation and food services," accounting for 16.6% in 2025, compared to 16.1% in 1991, and "public services, education, health," accounting for 20.5% of gross value added in 2025, compared to 16.3% in 1991. The production sector (excluding construction) generated 22.9% of gross value added compared to 30.6% in 1991. Construction contributed 4.9% to gross value added in 2025, compared to 6.1% in 1991, and agriculture, forestry and fishing accounted for 1.2% of gross value added in 2024, compared to 1.0% in 1991.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Tables 3.2.1* 

In 2025, private final consumption expenditure totaled 53.2%, gross capital formation amounted to 20.3% and government final consumption expenditure equaled 22.5%, in each case of GDP at current prices. Exports and imports of goods and services accounted for 40.4% and 38.1% of GDP at current prices, respectively. In 2022, Germany's trade surplus decreased substantially because of the deterioration of terms of trade as a result of Russia's invasion of Ukraine. In 2023, the trade surplus rebounded substantially and was almost as high as in 2021. In 2025, the trade balance (according to national accounts) showed a surplus equal to 2.4% of GDP (2024: 3.8% of GDP).

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Table 2.3.1.* 

Russia's invasion of Ukraine at the end of February 2022 and the subsequent extreme rise in energy prices and its knock-on effects on consumer price inflation have dampened economic activity in Germany. The tariffs imposed by the US on Germany since April 2025 have also had a noticeable negative impact. In 2025, annual price-adjusted GDP was 0.2% higher than in 2024. Household final consumption expenditure increased by a price-adjusted 1.6% compared to 2024. Exports decreased by 0.4%, while imports increased by 3.6%, all on a price-adjusted basis. Accordingly, the growth contribution of net exports was -1.5 percentage points. Gross fixed capital formation decreased by 0.2%, in price-adjusted terms. Government final consumption expenditure increased by 0.3% on a price-adjusted basis.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Tables 2.3.2.* 

The annual average rate of registered unemployment (as computed under the "national definition" of the Federal Employment Agency (*Bundesagentur für Arbeit*) increased from 6.0% in 2024 to 6.3% in 2025. Based on the internationally comparable method of calculation promulgated by the International Labour Organization ("ILO"), which is referred to as the "ILO definition," the annual average unemployment rate increased from 3.1% in 2024 to 3.5% in 2025. For an explanation of the differences between the national definition and the ILO definition, see "—Employment and Labor." Inflation as measured by the percentage change in the national consumer price index ("CPI") was 2.2% in 2025, the same as in 2024. General government gross debt stood at EUR 2,838.2 billion at year-end 2025, compared to EUR 2,693.8 billion at year-end 2024.

*Sources: Bundesagentur für Arbeit, Tabellen, Arbeitslosigkeit im Zeitverlauf: Entwicklung der Arbeitslosenquote (Jahreszahlen) 2025, Tabelle 2.1, (https://statistik.arbeitsagentur.de/SiteGlobals/Forms/Suche/Einzelheftsuche_Formular.html?nn=1610104&topic_f=laender-heft); Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (March 2026), Table 3.1.2 and Table 2.1.10; Deutsche Bundesbank, Time Series BBGFS1.A.BJ9059, General government debt as defined in the Maastricht Treaty - Germany – overall.* 

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The following table shows selected key economic figures for the Federal Republic for each of the years indicated.

KEY ECONOMIC FIGURES

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 |
|  | (EUR in billions, unless otherwise indicated) | (EUR in billions, unless otherwise indicated) | (EUR in billions, unless otherwise indicated) | (EUR in billions, unless otherwise indicated) | (EUR in billions, unless otherwise indicated) |
|  GDP - at current prices | 4469.9 | 4329.0 | 4219.3 | 3989.4 | 3682.3 |
| &nbsp;&nbsp;&nbsp;&nbsp; (change from previous year in %) | 3.3 | 2.6 | 5.8 | 8.3 | 6.7 |
|  GDP - price-adjusted, chain-linked index (2020=100), not adjusted for calendar effects | 104.6 | 104.4 | 104.9 | 105.8 | 103.9 |
| &nbsp;&nbsp;&nbsp;&nbsp; (change from previous year in %) | 0.2 | -0.5 | -0.9 | 1.8 | 3.9 |
|  GDP - price-adjusted, chain-linked index (2020=100), adjusted for calendar effects | 104.8 | 104.4 | 104.9 | 105.6 | 103.7 |
| &nbsp;&nbsp;&nbsp;&nbsp; (change from previous year in %) | 0.4 | -0.5 | -0.7 | 1.9 | 3.9 |
|  Unemployment rate (ILO definition) (in %)<sup>(1)</sup> | 3.5 | 3.1 | 2.8 | 2.9 | 3.3 |
|  Inflation (year-to-year change in the consumer price index (CPI) in %) | 2.2 | 2.2 | 5.9 | 6.9 | 3.1 |
|  Balance of payments - current account | 202.7 | 255.1 | 232.4 | 162.5 | 254.4 |
|  General government gross debt<sup>(2)</sup> | 2838.2 | 2693.8 | 2630.5 | 2569.0 | 2501.7 |

---

(1) Unemployed persons, available and seeking work.

(2) Definition according to Maastricht Treaty.

*Sources: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 - 4. Vierteljahr 2025 (February 2026), Tables 1.1 and 1.11; Statistisches Bundesamt, Consumer price indices, Consumer price index - overall index and by 12 divisions, Change on previous year (https://www.destatis.de/EN/Themes/Economy/Prices/Consumer-Price-Index/Tables/Consumer-prices-12-divisions.html#242118); Deutsche Bundesbank, Balance of payments statistics, 14-03-2025, Table I. Major items of the balance of payments (https://www.bundesbank.de/resource/blob/810958/da8cfebd71cf676ea6ee3046fd5f9fb2/472B63F073F071307366337C94F8C870/i-wichtige-posten-data.pdf); Deutsche Bundesbank, Statistics, General government debt as defined in the Maastricht Treaty - Germany - overall (https://www.bundesbank.de/dynamic/action/en/statistics/time-series-databases/time-series-databases/745582/745582?listId=www_v27_web011_21a&tsId=BBGFS1.A.BJ9059&dateSelect=2023).* 

**Economic Outlook** 

The economic situation in Germany has clouded over in recent months. At the beginning of the year, the economy already showed signs of cooling. By the end of the first quarter, the military conflict in the Middle East and the related restrictions on commercial shipping through the Strait of Hormuz had led to shortages and price increases for energy and other commodities, affecting businesses and private households in Germany. Against this background, the federal government now expects only a modest rise in real gross domestic product (GDP) of 0.5 percent for the current year. Assuming the conflict eases soon, these headwinds should gradually diminish later in the year, allowing fiscal impulses to become noticeable. Real GDP is projected to grow by 0.9 percent in 2027, and inflation is expected at 2.7 percent this year and 2.8 percent next year.

In addition to the conflict in the Middle East, international trade is also being burdened by protectionist measures and fragmentation. German export performance remains weak, partly due to reduced competitiveness. The recovery of the German economy is therefore being driven primarily by domestic demand. With rising real incomes, private consumption continues to support the German economy despite the erosion of purchasing power caused by energy price shocks resulting from the conflict in the Middle East. Fiscal impulses are likely to stimulate gross investment, while government spending, especially on infrastructure and defense, is likely to contribute to overall economic revival. Further economic development depends largely on how the conflict in the Middle East evolves and is subject to considerable uncertainty.

*Sources: Bundesministerium für Wirtschaft und Klimaschutz, Pressemitteilung, Geopolitische Krisen verzögern Erholung – Frühjahrsprojektion der Bundesregierung, April 22, 2026 (https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Pressemitteilungen/2026/04/geopolitische-krisen-verzoegern-erholung.html)* 

**General Economic Policy** 

The Federal Government views structural reforms as central to strengthening Germany's economic recovery and growth potential. To this end, it is pursuing six interrelated core priorities: First, cutting unnecessary bureaucracy to foster new economic dynamism, aiming for more efficient regulatory frameworks without lowering important standards. Second, safeguarding fiscal sustainability by prioritizing investments and reviewing subsidies for effectiveness. Third, strengthening intergenerational fairness by improving opportunities for upward mobility and participation, including for skilled workers from abroad. Fourth, promoting equal living conditions, especially by supporting structurally weak regions, to secure social cohesion and acceptance of the social market economy. Fifth, closer integration of economic and security policy and further development of industrial policy to increase resilience to international risks and technological autonomy. Sixth, strengthening Europe as a common economic area by removing market barriers, advancing trade agreements, and protecting against unfair practices.

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Given a sizeable investment backlog, a need to expand defense spending and a considerable underutilization of the economy, constitutional amendments and the establishment of the Special Fund for Infrastructure and Climate Neutrality (SVIK) in March 2025 have expanded fiscal room for maneuver. An investment initiative has been launched focusing on transport, digital, energy, and hospital infrastructure as well as housing. For 2026, significant increases in investment and various relief measures for energy and transmission costs are planned to provide cyclical stimulus. Improvements to the tax system and an investment-promoting package of measures are strengthening Germany as a business location and are intended to incentivize private investment. In parallel, reform commissions are being set up to further improve location conditions for businesses in a targeted way.

The Federal Government aims for clear, targeted, and efficient regulation and intends to regularly evaluate existing regulations to limit lawmaking processes to what is essential. Planning and permitting procedures are to be accelerated, for example through a reconfiguration of federal relations and a reform of procedural law. Regarding tax-funded social benefits, the government's Commission on Welfare State Reform has developed proposals for modernization and cutting red tape.

Public infrastructure is a decisive locational factor but in recent years has been burdened by deficiencies and investment backlogs. With the Special Fund for Infrastructure and Climate Neutrality, the federal government is providing €500 billion for the modernization of public infrastructure, thereby relying on comprehensive monitoring, expedited approvals, and partnerships with states and municipalities. In addition, private investment is to be stimulated, for example via the Germany Fund (Deutschlandfonds).

Regulation of new technologies must become more innovation friendly. The previously risk-averse approach has hampered innovation, particularly in key technologies such as artificial intelligence (AI) and genetic engineering, leading to value creation moving abroad. Startups face particular challenges, especially limited access to capital and relatively small capital markets by international standards. The Federal Government therefore aims to deepen the Capital Markets Union and provide startups with better access to venture capital.

A secure, affordable, and environmentally compatible energy supply remains essential; energy costs in Germany are still high by international standards and require adjustments for greater cost efficiency, digitalization, and more flexible electricity demand. Moreover, the ramp-up of the hydrogen market is being supported through public support for a hydrogen core-network and pragmatic regulation to strengthen investment and supply security.

The availability of qualified workers is also of central importance. A decline in the labor force due to demographic aging is dampening potential growth, while skills shortages and changing qualification requirements due to digitalization and AI pose additional challenges. The Federal Government is focusing on measures to increase employment, particularly among women, older people, and the unemployed, for example through the *Aktivrente* (active retirement), expanding childcare, and reforming basic income support. In addition, immigration from third countries is being specifically promoted through the establishment of a digital "Work-and-Stay Agency."

The tax and social contribution burden on labor in Germany is relatively high and, if it increases further, could impair the labor supply from inside and outside the country as well as competitiveness. The Federal Government is therefore focusing on sustainable financing of the social insurance systems and has appointed several expert commissions for this purpose. Measures such as the National Continuing Education Strategy and the Alliance for Initial and Continuing Training are being supported to provide more flexibility and productive adjustment in the labor market.

With regard to international order and security, Germany aims to assume a leading role within the EU, particularly in expanding free trade and trade relations. Agreements already concluded should be ratified promptly, and new partnerships—for example with India and ASEAN states—should be advanced. At the same time, trade barriers in the single market should be dismantled, the integration of the Capital Markets Union deepened, and a harmonized legal framework established to facilitate corporate growth. These measures strengthen resilience and growth by increasing the ability to absorb external and internal shocks.

The structural transformation of German industry is shaped by changing demand patterns and growing risks for economic security and supply chains. In principle, companies and businesses themselves are called upon to factor altered risk situations into their strategic decisions. However, some potential risks, from a macroeconomic perspective, far exceed the direct private costs. In such cases, the state bears responsibility—for example by protecting critical infrastructure, adopting EU preference arrangements for strategic sectors, and forging international raw materials partnerships. Energy cost relief and the national economic security strategy are central measures in this context as well.

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For regionally balanced economic development, the Federal Government is relying on the Joint Task "Improvement of Regional Economic Structures" (GRW), whose relaunch from 2026 will create additional investment incentives and simplify access to funding.

The Federal Government is committed to maintaining and strengthening global climate protection ambitions. Germany was among the 197 states at the World Climate Conference in Paris in 2015, which committed to limiting global warming to well below 2°C, preferably to 1.5°C, and to achieving greenhouse gas neutrality worldwide by the second half of the century. At the national level, the Federal Climate Protection Act (*Bundes-Klimaschutzgesetz*, "KSG") provides the central legal framework for climate protection policy in Germany. In terms of greenhouse gas reduction targets, the KSG prescribes a reduction target of at least 65% for 2030 compared to 1990 levels, an interim reduction target of at least 88% for 2040 and greenhouse gas neutrality by 2045; after 2050, negative emissions are to be achieved across all sectors. The Federal Government continues to rely on a mix of instruments with carbon pricing, as well as targeted relief for citizens and companies to cushion social hardships and measures to promote investment in climate-friendly alternatives. The focus is, on the one hand, on the targeted expansion of network infrastructure, such as heating and hydrogen network or electric vehicle charging infrastructure. In addition, the federal government is returning the revenue from CO2 pricing to citizens and businesses by, among other things, introducing unbureaucratic and socially tiered relief measures and subsidies for housing and mobility. Competitive disadvantages compared to countries with lower decarbonization efforts are to be limited by the EU carbon border adjustment mechanism, with Germany advocating for a more effective and less bureaucratic design.

Overall, the Federal Government is pursuing a reform agenda that reduces red tape, advances innovation and digitalization, modernizes infrastructure, and makes the energy supply more affordable. Finally, the labor market is being made more flexible and work incentives are being strengthened to offset negative effects from demographic change. The reform agenda aims to increase potential growth and competitiveness while aligning social, economic, and environmental goals.

*Sources: Bundesministerium für Wirtschaft und Klimaschutz, Annual Economic Report 2026 (https://www.bundeswirtschaftsministerium.de/mwg-internal/de5fs23hu73ds/progress?id=aHTlDxuZDqkQKZFCgMBpmgtSj8OC3n3khRsjQqCsHiE,&dl)* 

For further information on the Federal Republic's fiscal situation and prospects, see "—Public Finance—Germany's General Government Deficit/Surplus and General Government Gross Debt" and "—Public Finance—Fiscal Outlook." For information on government measures to stabilize Germany's financial system, see "—Monetary and Financial System—Financial System—German Financial System." For information on government budgets, see "—Public Finance."

**Gross Domestic Product** 

The following tables show the structure of the Federal Republic's GDP at current prices by use and origin for each of the years indicated along with changes over the respective preceding period.

STRUCTURE OF GDP — USE

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 | 2022 | 2021 | 2025 | 2024 | 2023 | 2022 |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) |
|  Domestic uses | 4364.6 | 4165.4 | 4051.7 | 3890.8 | 3493.8 | 4.8 | 2.8 | 4.1 | 11.4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Final private consumption | 2377.9 | 2283.0 | 2218.5 | 2094.0 | 1841.7 | 4.2 | 2.9 | 5.9 | 13.7 |
| &nbsp;&nbsp;&nbsp;&nbsp; Final government consumption | 1006.4 | 951.8 | 905.2 | 868.2 | 817.2 | 5.7 | 5.1 | 4.3 | 6.2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gross fixed capital formation | 908.0 | 885.7 | 894.1 | 861.8 | 780.0 | 2.5 | -0.9 | 3.8 | 10.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Machinery and equipment | 267.2 | 267.1 | 277.4 | 264.0 | 235.6 | 0.0 | -3.7 | 5.1 | 12.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Construction | 461.8 | 450.7 | 453.0 | 446.6 | 404.2 | 2.5 | -0.5 | 1.4 | 10.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other products | 179.0 | 168.0 | 163.7 | 151.2 | 140.1 | 6.6 | 2.6 | 8.3 | 7.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in inventories<sup>(1)</sup> | 72.4 | 45.0 | 33.9 | 66.8 | 54.9 |  |  |  |  |
|  Net exports<sup>(1)</sup> | 105.3 | 163.5 | 167.6 | 98.6 | 188.5 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Exports | 1807.4 | 1793.7 | 1812.9 | 1820.3 | 1565.7 | 0.8 | -1.1 | -0.4 | 16.3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Imports | 1702.1 | 1630.1 | 1645.3 | 1721.7 | 1377.2 | 4.4 | -0.9 | -4.4 | 25.0 |
|  **Gross domestic product** | **4469.9** | **4329.0** | **4219.3** | **3989.4** | **3682.3** | **3.3** | **2.6** | **5.8** | **8.3** |

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(1) Percentage changes are not presented due to the potentially changing signs of these net positions.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 4. Vierteljahr 2025 (February 2026), Tables 3.1 and 3.9.* 

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STRUCTURE OF GDP — ORIGIN

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 | 2022 | 2021 | 2025 | 2024 | 2023 | 2022 |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (change in %) | (change in %) | (change in %) | (change in %) |
|  Gross value added of all economic sectors: | 4044.8 | 3921.3 | 3853.9 | 3591.9 | 3294.1 | 3.1 | 1.7 | 7.3 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp; Agriculture, forestry and fishing | 39 | 39.6 | 39.2 | 39.7 | 27.8 | -1.6 | 1 | -1.2 | 42.9 |
| &nbsp;&nbsp;&nbsp;&nbsp; Production sector (excluding construction) | 924.7 | 916.1 | 943.4 | 845.8 | 764.2 | 0.9 | -2.9 | 11.5 | 10.7 |
| &nbsp;&nbsp;&nbsp;&nbsp; Construction | 199.9 | 193.2 | 187.2 | 173.9 | 162.2 | 3.5 | 3.2 | 7.6 | 7.3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Trade, transport, accommodation and food services | 673.3 | 657.3 | 647.1 | 641.9 | 545.8 | 2.4 | 1.6 | 0.8 | 17.6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Information and communication | 196.7 | 191.3 | 185.7 | 168.2 | 167.8 | 2.8 | 3 | 10.3 | 0.3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Financial and insurance services | 158.9 | 152.7 | 149.2 | 135 | 138.8 | 4.1 | 2.4 | 10.5 | -2.7 |
| &nbsp;&nbsp;&nbsp;&nbsp; Real estate activities | 392.4 | 387.3 | 374.4 | 346.1 | 339.7 | 1.3 | 3.4 | 8.2 | 1.9 |
| &nbsp;&nbsp;&nbsp;&nbsp; Business services | 493.6 | 480.1 | 465.2 | 429.7 | 397 | 2.8 | 3.2 | 8.3 | 8.2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Public services, education, health | 827.3 | 770.5 | 733.6 | 692 | 651.1 | 7.4 | 5 | 6 | 6.3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other services | 139.2 | 133.3 | 128.9 | 119.6 | 99.7 | 4.4 | 3.4 | 7.8 | 19.9 |
|  Taxes on products offset against subsidies on products | 425.1 | 407.7 | 365.4 | 397.5 | 388.3 | 4.3 | 11.6 | -8.1 | 2.4 |
|  **Gross domestic product** | **4469.9** | **4329.0** | **4219.3** | **3989.4** | **3682.3** | **3.3** | **2.6** | **5.8** | **8.3** |

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*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 4. Vierteljahr 2025 (February 2026), Tables 1.14 and 2.1.* 

**Sectors of the Economy** 

***Production Sector***

Following German reunification in 1990, industry in the eastern Länder (i.e., the territory of the former German Democratic Republic), has undergone a restructuring process. Today, the German production sector is characterized by a balanced mix of small, medium and large enterprises, and is almost entirely privately owned. Measured by its share in value added, 58.5% of the production sector is geographically concentrated in the western Länder of Bavaria, Baden-Württemberg and North Rhine-Westphalia. The main segments of the production sector relate to the manufacturing of motor vehicles, machinery and equipment, electrical and optical equipment, basic metals and fabricated metal products, as well as chemicals and chemical products. In 2025, the production sector's aggregate contribution to gross value added at current prices was 22.9% (excluding construction) and 27.8% (including construction), respectively. Its price- adjusted gross value added (excluding construction) decreased by 0.8% year-on-year in 2025.

*Sources: Volkswirtschaftliche Gesamtrechnungen der Länder, Reihe 1, Länderergebnisse Band 1 (February 2025), Table 2.3; Statistisches Bundesamt, Fachserie 18, Reihe 1.2 –4. Vierteljahr 2025 (February 2026), Tables 2.1 and 2.2.* 

OUTPUT IN THE PRODUCTION SECTOR <sup>(1)</sup>

(2021 = 100)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 | 2022 |
|  **Production sector, total** | **91.7** | **92.7** | **97.0** | **98.7** |
|  Industry <sup>(2)</sup> | 92.8 | 93.9 | 98.6 | 99.1 |
|  *of which:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Intermediate goods <sup>(3)</sup> | 84.7 | 86.1 | 90.7 | 96.3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital goods <sup>(4)</sup> | 99.4 | 100.5 | 106.4 | 101.1 |
| &nbsp;&nbsp;&nbsp;&nbsp; Durable goods <sup>(5)</sup> | 84.8 | 87.5 | 93.5 | 101.0 |
| &nbsp;&nbsp;&nbsp;&nbsp; Nondurable goods <sup>(6)</sup> | 95.3 | 94.7 | 95.6 | 100.1 |
|  Energy <sup>(7)</sup> | 83.6 | 82.3 | 84.8 | 98.7 |
|  Construction <sup>(8)</sup> | 90.9 | 92.5 | 95.6 | 96.7 |

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(1) Adjusted for working-day variations.

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(2) Manufacturing sector, unless assigned to the main grouping energy, plus mining and quarrying.

(3) Including mining and quarrying except energy-producing goods.

(4) Including manufacture of motor vehicles and components.

(5) Consumption goods that have a long-term use, such as furniture.

(6) Consumption goods that have a short-term use, such as food. Including printing and service activities related to
printing.

(7) Electricity, gas, steam and hot water supply, mining and quarrying of energy-producing materials, and especially
manufacture of refined petroleum products.

(8) Comprises the economic classifications "Site preparation" and "Building of complete
constructions or parts thereof; civil engineering."

*Source: Deutsche Bundesbank, Monatsbericht März 2025, Table XI.2.* 

***Services Sector***

As in most other industrialized countries, the services sector, which comprises "trade, transport, accommodation and food services," "information and communication," "financial and insurance services," "real estate activities," "business services," "public services, education, health" as well as "other services," has expanded in recent years and is currently the largest contributor to gross value added. In 2025, the services sector's aggregate contribution to gross value added at current prices was 71.2%, compared to 62.2% in 1991. Within the services sector, "public services, education, health" represented the largest subsector in terms of contribution to total gross value added at current prices, contributing 20.5% in 2025 after 16.3% in 1991.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 2025 (February 2026), Table 2.1.* 

**Employment and Labor** 

Labor market conditions deteriorated slightly in 2025 due to economic stagnation. In 2025, the average unemployment rate according to the national definition was 6.3%, compared to 6.0% in 2024. Under the ILO definition, the average unemployment rate was 3.5% in 2025 compared to 3.1% in 2024. The number of persons resident in Germany who were either employed or self-employed was 45.8 million in 2025, the same as in 2024.

*Sources: Bundesagentur für Arbeit, Tabellen, Arbeitslosigkeit im Zeitverlauf: Entwicklung der Arbeitslosenquote (Jahreszahlen) 2025, Tabelle 2.1, (https://statistik.arbeitsagentur.de/SiteGlobals/Forms/Suche/Einzelheftsuche_Formular.html?nn=1610104&topic_f=laender-heft); Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (March 2026), Table 3.1.2.* 

The following table presents data with respect to employment and unemployment for each of the years indicated. The ILO definition and the national definition of unemployment differ in various ways. Further, the national definition of unemployment is applied to administrative data whereas unemployment according to the ILO is measured using surveys.

EMPLOYMENT AND UNEMPLOYMENT

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 | 2022 | 2021 |
|  Employed (in thousands)–ILO definition | 45830 | 45830 | 45782 | 45469 | 44909 |
|  Unemployed (in thousands)–ILO definition <sup>(1)</sup> | 1652 | 1490 | 1342 | 1355 | 1517 |
|  Unemployment rate (in %)–ILO definition | 3.5 | 3.1 | 2.8 | 2.9 | 3.3 |
|  Unemployed (in thousands)–national definition <sup>(2)</sup> | 2948 | 2787 | 2609 | 2418 | 2613 |
|  Unemployment rate (in %)–national definition <sup>(3)</sup> | 6.3 | 6.0 | 5.7 | 5.3 | 5.7 |

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(1) Unemployed persons, available and seeking work.

(2) Registered unemployed persons, available and seeking work (but including persons working up to 15 hours per
week).

(3) As a percentage of the total work force (excluding armed forces).

*Sources: Bundesagentur für Arbeit, Monatsbericht zum Arbeits- und Ausbildungsmarkt: Dezember und das Jahr 2025, Table 9; Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 4. Vierteljahr 2025 (February 2026), Table 1.11.* 

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The following table presents data with respect to the employment rate broken down by gender and age for 2024

EMPLOYMENT RATE – BREAKDOWN BY GENDER AND AGE

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| | | | |
|:---|:---|:---|:---|
|  | 2025 | 2025 | 2025 |
| (Age in years) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Men | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Women |
|  15 to 19 | 28.5 | 30.0 | 26.8 |
|  20 to 24 | 70.6 | 72.1 | 69.0 |
|  25 to 29 | 81.9 | 84.0 | 79.7 |
|  30 to 34 | 83.9 | 88.7 | 78.8 |
|  35 to 39 | 85.1 | 89.7 | 80.3 |
|  40 to 44 | 86.1 | 89.7 | 82.5 |
|  45 to 49 | 87.2 | 89.8 | 84.5 |
|  50 to 54 | 85.8 | 88.4 | 83.2 |
|  55 to 59 | 83.3 | 86.4 | 80.2 |
|  60 to 64 | 67.5 | 71.6 | 63.5 |
|  65 to 69 | 22.8 | 26.3 | 19.7 |
|  15 to 64 | 77.2 | 80.2 | 74.1 |
|  65 and older | 10.2 | 13.1 | 7.8 |
|  **Total** | **59.8** | **64.4** | **55.5** |

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*Source: Statistisches Bundesamt, Erwerbsbeteiligung, Erwerbstätige und Erwerbstätigenquote nach Geschlecht und Alter, Ergebnis des Mikrozensus 2025 (https://www.destatis.de/DE/Themen/Arbeit/Arbeitsmarkt/Erwerbstaetigkeit/Tabellen/erwerbstaetige-erwerbstaetigenquote.html).* 

The following table presents data with respect to the structure of employment by economic sector for 2025 and 2015.

STRUCTURE OF EMPLOYMENT – ECONOMIC SECTORS

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| | | |
|:---|:---|:---|
|  | 2025 | 2015 |
|  | (Percent of total) | (Percent of total) |
|  Agriculture, forestry and fishing | 1.2 | 1.5 |
|  Production sector (excluding construction) | 17.2 | 18.7 |
|  *of which: manufacturing* | 15.8 | 17.4 |
|  Construction | 5.6 | 5.6 |
|  Trade, transport, accommodation and food services | 21.9 | 22.8 |
|  Information and communication | 3.4 | 2.8 |
|  Financial and insurance services | 2.4 | 2.7 |
|  Real estate activities | 1.1 | 1.1 |
|  Business services | 13.4 | 13.5 |
|  Public services, education, health | 26.9 | 24.3 |
|  Other services | 6.8 | 6.9 |
|  **Total (1)** | **100.0** | **100.0** |

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(1) Figures may not add up due to rounding.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (March 2026), Table 2.2.9.* 

The following table shows changes in the annual wage level per employee and unit labor costs per hour worked for each of the years indicated.

WAGE TRENDS AND LABOR COSTS

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 | 2022 | 2021 |
|  Gross wages and salaries per employee in EUR | 48017 | 45933 | 43674 | 41027 | 39317 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change from previous year in % | 4.5 | 5.2 | 6.5 | 4.3 | 3.3 |
|  Unit labor costs per hour worked Index (2020=100) | 122.5 | 117.2 | 111.0 | 103.2 | 99.4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change from previous year in % | 4.5 | 5.6 | 7.6 | 3.8 | -0.6 |

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*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 4. Vierteljahr 2025 (February 2026), Tables 2.17 and 2.20.* 

About one-seventh of the German work force consists of members of unions. The German Trade Union Federation (*Deutscher Gewerkschaftsbund*) serves as an umbrella organization for eight such unions. At the end of 2024, approximately 5.6 million persons were members of a union under the umbrella of the German Trade Union Federation, which is considerably less compared to the 11.8 million members in 1991, the first full year after German reunification. One major reason contributing to the strong decline since 1991 is the significant decline in manufacturing employment in the eastern Länder after reunification.

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Each member union typically covers employees of an entire industry, regardless of the precise type of work done by those employees (the "one union, one industry" principle). As a result, employers usually deal with only one negotiating partner on the labor side in each specific industry. The unions and employers of each specific industry enter into collective labor agreements (*Tarifverträge*) without government intervention. The collective labor agreements often apply to all employees of a given industry, regardless of whether or not a particular employee is a member of a union, so long as the employer is a member of the relevant association of employers, which is often the case. Despite their binding character, collective labor agreements in many cases contain opt-out clauses (*Öffnungsklauseln)* allowing for company-specific adjustments to be negotiated between the employer and the works council at the specific company. Moreover, there is a range of additional possibilities to deviate from these agreements. Many employers in the eastern Länder are not members of employers' associations, which means that wages are individually negotiated, often resulting in wage levels that are lower than those provided for by the collective labor agreements.

*Sources: Institut der deutschen Wirtschaft, IW-Kurzbericht 14/2026 (https://www.iwkoeln.de/fileadmin/user_upload/Studien/Kurzberichte/PDF/2026/IW-Kurzbericht_2026-Gewerkschaftlicher-Organisationsgrad.pdf); DGB, Mitgliederzahlen 2020-2024 (https://www.dgb.de/der-dgb/geschichte-des-dgb/mitgliederzahlen/), European Trade Union Institute, National Industrial Relations, Countries, Germany, Trade Unions (https://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany); Bundeszentrale für politische Bildung, kurz&knapp, Lexika, Handwörterbuch des politischen Systems, Tarifpolitik/Tarifautonomie<br> (https://www.bpb.de/kurz-knapp/lexika/handwoerterbuch-politisches-system/202193/tarifpolitik-tarifautonomie/).* 

**Social Security, Social Protection, and Social Policy** 

The comprehensive system of social security and protection in effect in the Federal Republic includes in particular health insurance, long-term care insurance, retirement and disability pensions, participation benefits and benefits for medical rehabilitation, protection against the effects of occupational accidents and diseases by means of the mandatory occupational accident insurance, unemployment benefits, compensation for workers in short-time work schemes (*Kurzarbeit*), family benefits, benefits and rehabilitation for persons with disabilities, allowances to orphans and to single persons with dependents, and the provision of general public assistance to persons in need. The majority of the German population is covered by mandatory statutory pensions and health insurance. Hospitals and institutions caring for children and handicapped persons are operated by municipalities, churches, charitable institutions, and private providers.

Most of these social services are mainly funded through social security contributions from employers and employees, and a smaller part is funded through direct contributions by the Federal Republic, the Länder, municipalities and other public institutions, depending notably upon whether the respective social service is provided by an insurance-based system funded through contributions or a social-assistance-like program funded through taxes.

The Federal Republic's statutory pension insurance system operates on a pay-as-you-go basis, with contributions from current employers and employees funding payments to current retired persons. Generally, most employed and some self-employed and other persons are subject to mandatory insurance in the statutory retirement system. Certain persons, including employed members of particular professions (including some freelance professions) may apply for exemption, while others, as in the case of civil servants, are automatically exempt from mandatory participation in the statutory pension insurance system. Instead, exempted persons have to contribute to professional or public pension schemes or, in the case of civil servants and similar groups, they will benefit from special pension schemes for civil servants. Furthermore, the Retirement Funds Act (*Altersvermögensgesetz)* aims to ensure the long-term viability of the statutory pension insurance system by decreasing payments from the statutory pension insurance while encouraging insured persons to also sign up for designated privately funded or occupational pension schemes, for which certain bonus payments and tax incentives are provided.

Statutory health insurance coverage must remain available to all persons fulfilling the applicable eligibility criteria. Within the statutory health insurance system, insured persons may choose among a large number of statutory health insurance funds that have developed historically. Persons whose gross income exceeds certain thresholds as well as civil servants, self-employed persons and members of certain professions may opt out of the statutory system and choose private health insurance coverage, which, in case of opting-out, is obligatory as well. Contributions to the statutory health insurance system are based solely on the insured person's income situation and are independent of the insured person's gender, age and medical risk. By contrast, contributions towards private health insurance coverage are mainly calculated based on age, medical risk and the desired level of coverage.

Pursuant to the Citizen's Benefit Act (*Bürgergeld-Gesetz*), basic income support for jobseekers underwent a reform with effect from January 1, 2023. The citizen's benefit (*Bürgergeld)* is a cash benefit which jobseekers and their families receive from job centers to ensure their ability to cover their essential living expenses. Pursuant to the reform, in order to provide a reliable safety net for claimants of the citizen's benefit, among others, the current rate of inflation will be taken into account to a greater extent in the annual process of reviewing citizen's benefit amounts.

------

In 2025, social security revenue, as shown in the national accounts, amounted to EUR 936.0 billion, and expenditure was EUR 937.7 billion. The social security budget thus incurred a deficit of EUR 1.7 billion in 2025, after a deficit of EUR 11.8 billion in 2024.

*Sources: Federal Ministry of Labour and Social Affairs, Citizen's benefits: Basic income support for jobseekers (https://www.bmas.de/SharedDocs/Downloads/EN/PDF-Publikationen/a430e-buergergeld-englisch-pdf.pdf? blob=publicationFile&v=5); Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (March 2026), Table 3.4.3.7.* 

In light of a changing population structure, the Federal Government has already implemented structural reforms to the statutory pension system in order to safeguard its long-term sustainability. In addition, the Federal Republic has implemented reforms of the statutory pension insurance, which, since 2012, have gradually raised the regular retirement age by two years to the age of 67. For example, the 1964 birth cohort will reach the regular retirement age of 67 in 2031.

To increase the sustainability of the health care system, the Federal Republic has implemented several structural reform measures to strengthen competition among providers in order to improve the efficiency and quality of health care services.

*Sources: Bundesministerium der Gesundheit, Themen, Krankenversicherung, Finanzierung, Gesundheitsfonds (https://www.bundesgesundheitsministerium.de/gesundheitsfonds.html); European Commission, Employment, Social Affairs & Inclusion, Germany - Pensions including survivors' pensions, Survivors' benefits<br> (https://ec.europa.eu/social/main.jsp?catId=1111&intPageId=4554&langId=en).* 

**International Economic Relations** 

International economic relations are of major importance to the German economy. In 2025, exports and imports of goods and services amounted to 40.4 % and 38.1 % of GDP at current prices, respectively. The Federal Republic supports the EU in pursuing a liberal foreign trade policy aimed at dismantling tariffs and other barriers to trade. The responsibility for trade matters (particularly WTO and free trade agreements) in the EU rests with the European Commission. For further information on the EU's responsibility for trade matters,<br> see "—General—The European Union and European Integration—Economic Integration."

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 2025 (February 2026), Table 3.1.* 

Because of the openness of the Federal Republic's economy, German growth and employment depend particularly on open markets and foreign trade. Accordingly, the Federal Government supports efforts to reduce trade barriers. The strengthening of the multilateral trading system, with the WTO at its center, is a priority both for Germany and the EU. Bilaterally, the Federal Government and the European Commission champion ambitious, balanced and comprehensive free trade agreements in order to strengthen the international competitiveness of the European economy and thus growth and employment in Europe, while also contributing to sustainable development. An example of these agreements is the EU-Mercosur Agreement, which was signed on 17 January 2026 in the form of a partnership agreement and a separate interim trade agreement, creating one of the largest free trade areas in the world with over 700 million people. In addition, the Federal Government strongly supports ongoing negotiations of the EU for free trade agreements with India, the ASEAN countries and others. At the same time, the EU should continue to make rigorous use of its instruments to protect against market-distorting trade practices – where this is in the interest of the overall economy.

*Sources: Bundesministerium für Wirtschaft und Klimaschutz, Annual Economic Report 2026 (https://www.bundeswirtschaftsministerium.de/mwg-internal/de5fs23hu73ds/progress?id=aHTlDxuZDqkQKZFCgMBpmgtSj8OC3n3khRsjQqCsHiE,&dl)* 

***Balance of Payments***

Germany's current account surplus fell sharply in 2025, dropping by €52 billion to €203 billion. In relation to GDP, the surplus decreased by 1<sup>1</sup>⁄<sub>2</sub> percentage points to 4<sup>1</sup>⁄<sub>2</sub>% of GDP in 2025, reaching its second-lowest level in 20 years. The main factor behind this was a smaller surplus in the trade in goods. The main reason for the decline in the goods trade surplus was a significant increase in goods imports across the board. Imports from outside the euro area—including China—rose particularly sharply. Trade with China thus accounted for the bulk of the decline in the current account balance.

*Source: Deutsche Bundesbank, Monatsbericht März 2026, Chapter: Die deutsche Zahlungsbilanz für das Jahr 2025.* 

According to data prepared by the Deutsche Bundesbank, applying the annual averages of a broad monthly indicator of Germany's price competitiveness compared to 60 trading partners based on consumer price indices, Germany's price competitiveness has been relatively stable since 1999, fluctuating within a range of approximately 10% of the average indicator value in the period from 1999 to 2025. In 2025, price competitiveness decreased somewhat compared to 2024, the indicator increased by 1.2%. The euro appreciated against the U.S. dollar by 4.4%. Variations in the exchange rates should be viewed in light of the fact that the Euro Area Member States account for a major part of German exports (39% in 2025).

------

*Source: Deutsche Bundesbank, Monatsbericht März 2026, Statistical Annex, Tables XII.3, XII.9 XII.11.* 

The following table shows the Federal Republic's balance of payments for each of the years indicated.

BALANCE OF PAYMENTS (BALANCES)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 | 2022 | 2021 |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) |
|  Current account |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade in goods (1) | 184186 | 236745 | 225374 | 125694 | 187660 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Services (2) | -73520 | -70658 | -60939 | -33722 | 3833 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Primary income | 160774 | 158358 | 134424 | 138965 | 122860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Secondary income | -68698 | -69331 | -66418 | -68397 | -59947 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total current account** | **202743** | **255115** | **232441** | **162541** | **254406** |
|  Capital account (3) | -28231 | -22235 | -23643 | -20043 | -3480 |
|  Financial account |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net German investment abroad (increase: +) | 802629 | 517531 | 301104 | 318021 | 816110 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net foreign investment in Germany (increase: +) | 539441 | 268148 | 112972 | 151667 | 611042 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net financial account**<br> **(net lending: + / net borrowing: -)** | **263188** | **249383** | **188133** | **166354** | **205068** |
|  Net errors and omissions (4) | 88676 | 16503 | -20666 | 23856 | -45858 |

---

(1) Including supplementary trade items.

(2) Including the freight and insurance costs of foreign trade.

(3) Including net acquisition/disposal of non-produced non-financial assets.

(4) Statistical errors and omissions, resulting from the difference between the balance on the financial account and
the balances on the current account and the capital account.

*Source: Deutsche Bundesbank, Balance of payments statistics, 13-03-2026, Table I. Major items of the balance of payments (https://www.bundesbank.de/resource/blob/810958/da8cfebd71cf676ea6ee3046fd5f9fb2/472B63F073F071307366337C94F8C870/i-wichtige-posten-data.pdf); Deutsche Bundesbank, Balance of payments statistics, 13-03-2026, Table IV. Financial account 1. Overview a) Total (https://www.bundesbank.de/resource/blob/811000/c16ebc6097db0e247730f33f2018a01e/472B63F073F071307366337C94F8C870/iv-kapitalbilanz-data.pdf).* 

***Balance of Trade***

The following tables show information relating to foreign trade of the Federal Republic for each of the years indicated.

TRADE IN GOODS (1)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2025 | 2024 | 2024 | 2023 | 2023 | 2022 | 2022 | 2021 | 2021 |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) |
|  Exports of goods |  | 1354309 |  | 1361557 |  | 1399779 |  | 1401388 |  | 1221066 |
|  Imports of goods |  | 1170123 |  | 1124811 |  | 1174405 |  | 1275694 |  | 1033406 |
|  **Trade balance** |  | **184,186** |  | **236,745** |  | **225,374** |  | **125,694** |  | **187,660** |

---

(1) Including supplementary trade items.

*Source: Deutsche Bundesbank, Balance of payments statistics, 11-04-2025, Table I. Major items of the balance of payments (https://www.bundesbank.de/resource/blob/810958/da8cfebd71cf676ea6ee3046fd5f9fb2/472B63F073F071307366337C94F8C870/i-wichtige-posten-data.pdf).* 

In 2024 the Federal Republic's principal export goods were: (1) motor vehicles, trailers and semi-trailers, (2) machinery and equipment, (3) computer, electronic and optical products and (3) chemicals and chemical products. The principal import goods were: (1) motor vehicles, trailers and semi-trailers (2) computer, electronic and optical products, (3) electrical equipment and (4) machinery and equipment. The Federal Republic has relatively few resources of industrial raw materials. As a result, it largely depends on imports to satisfy its demand for raw materials. This dependence on foreign supplies is particularly significant in the case of metals such as copper, tungsten, niobium, rare earth, rock phosphate, lithium carbonate, bauxite, manganese, titanium, and tin. The Federal Republic imports about 68% of its energy requirements, including 98% of its oil and 95% of its natural gas requirements.

*Sources: Statistisches Bundesamt, Statistischer Bericht Außenhandel - Dezember 2025 (February 2026), Tables 51000-05 and 51000-06 (https://www.destatis.de/DE/Themen/Wirtschaft/Aussenhandel/Publikationen/Downloads-Aussenhandel/statistischer-bericht-aussenhandel- 2070100251125.xlsx?__blob=publicationFile&v=2); Bundesanstalt für Geowissenschaften und Rohstoffe, Deutschland – Rohstoffsituation 2024 (https://www.bgr.bund.de/DE/Themen/Rohstoffe/Downloads/Downloads-MR/rohsit-2024.html)* 

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***Germany's Current Account Surplus and the Macroeconomic Imbalance Procedure***

Within the framework of the Macroeconomic Imbalance Procedure (MIP), in November 2025, the European Commission published the Alert Mechanism Report 2026. It notes that Germany's current account surplus remained elevated in 2024, reflecting persistently weak domestic demand, but is on a decreasing trend due to a significant worsening of export performance. Productivity has stagnated and competitiveness indicators are mixed, with unit labor costs growth slightly above the euro area average but the real effective exchange rate appreciation in line with the euro area average in 2024. House prices decreased slightly in 2024 but there are signs of housing supply constraints. The scoreboard reading for Germany shows that three indicators were beyond their indicative thresholds in 2024, namely the export performance against advanced economies, unit labor costs, and – albeit only narrowly – government debt. However, no in-depth review of Germany will be conducted in 2026 as Germany was not identified as experiencing excessive imbalances.

The Federal Government supports the European Commission in the implementation of the MIP. However, the Federal Government points out that German foreign direct investments abroad increase the current account balance, as does the interest and capital income generated from past foreign direct investments. Furthermore, the current account surplus is the result of market-based decisions by companies and individuals that determine supply and demand. The German economy's specialization in the export of capital goods also plays a key role in the high surplus. Finally, an increase in public investment and defense spending after the reforms of the German debt brake in March 2025 will further reduce the current account surplus over the next years.

For general information on the MIP, see "—General—The European Union and European Integration—EU Economic Governance— Macroeconomic Imbalance Procedure."

*Sources: European Commission, Report from the Commission to the European Parliament, the Council, the European Central Bank and the European Economic and Social Committee, Alert Mechanism Report 2026, November 2025 (https://commission.europa.eu/document/download/59b1f3b6-c752-4a86-937e-c09597b3d1c5_en?filename=COM_2025_956_1_EN.pdf); European Commission, Commission Staff Working Document Accompanying the document, Alert Mechanism Report 2026, November 2025 (https://commission.europa.eu/document/download/7e90444e-12c2-4702-b60e-719eb04b5eb3_en?filename=SWD_2025_956_1_EN.pdf); Bundesministerium der Finanzen, Monatsbericht des BMF März 2017, Analysen und Berichte, Der deutsche Leistungsbilanzsaldo – Entwicklung und wirtschaftspolitische Implikationen (https://www.bundesfinanzministerium.de/Monatsberichte/2017/03/Inhalte/Kapitel-3-Analysen/3-2-Der-deutsche-Leistungsbilanzsaldo.html).* 

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COMPOSITION OF EXPORTED AND IMPORTED GOODS

---

| | | |
|:---|:---|:---|
|  | 2025 | 2025 |
|  | Imports | Exports |
|  | (Percent of total) | (Percent of total) |
|  Products of agriculture and hunting | 3.1 | 0.7 |
|  Products of forestry | 0.1 | 0 |
|  Fish and products of fishing | 0.1 | 0 |
|  Coal and lignite | 0.3 | 0 |
|  Crude petroleum and natural gas | 4.7 | 0.1 |
|  Metal ores | 0.7 | 0 |
|  Other mining and quarrying products | 0.1 | 0.1 |
|  Food products | 5.9 | 5.3 |
|  Beverages | 0.6 | 0.5 |
|  Tobacco products | 0.4 | 0.2 |
|  Textiles | 0.9 | 0.7 |
|  Wearing apparel | 3 | 1.6 |
|  Leather and related products | 1.3 | 0.9 |
|  Wood and of products of wood and cork, except furniture; articles of straw and plaiting materials | 0.6 | 0.5 |
|  Paper and paper products | 1.2 | 1.4 |
|  Coke and refined petroleum products | 1.8 | 1.2 |
|  Chemicals and chemical products | 7.4 | 8.6 |
|  Basic pharmaceutical products and pharmaceutical preparations | 5.9 | 7.5 |
|  Rubber and plastic products | 3 | 3.4 |
|  Other non-metallic mineral products | 0.9 | 1.1 |
|  Basic metals | 5.4 | 5 |
|  Fabricated metal products, except machinery and equipment | 2.9 | 3.2 |
|  Computer, electronic and optical products | 10.5 | 8.7 |
|  Electrical equipment | 8.3 | 7.1 |
|  Machinery and equipment not elsewhere classified | 7.6 | 13.7 |
|  Motor vehicles, trailers and semi-trailers | 10.9 | 16.3 |
|  Other transport equipment | 3.4 | 3.7 |
|  Furniture | 1 | 0.7 |
|  Energy | 0.6 | 0.4 |
|  Other goods | 7.3 | 7.2 |
|  **Total** | **100.0** | **100.0** |

---

*Source: Statistisches Bundesamt, Außenhandel – Statistischer Bericht – Dezember 2025 (25.02.2026), Tables 51000-05, 51000-06 (https://www.destatis.de/DE/Themen/Wirtschaft/Aussenhandel/Publikationen/Downloads-Aussenhandel/statistischer-bericht-aussenhandel-2070100251125.html); calculation of percentages by KfW based on import and export values in EUR thousands, respectively; figures may not add up to total due to rounding.* 

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FOREIGN TRADE (SPECIAL TRADE) BY GROUPS OF COUNTRIES AND COUNTRIES (1)

---

| | | | |
|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) |
|  Exports to: |  |  |  |
|  **Total** | **1563965** | **1549577** | **1575209** |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | 147063 | 161427 | 157930 |
| &nbsp;&nbsp;&nbsp;&nbsp; France | 117228 | 115151 | 119825 |
| &nbsp;&nbsp;&nbsp;&nbsp; The Netherlands | 112426 | 109343 | 111835 |
| &nbsp;&nbsp;&nbsp;&nbsp; China (2) | 81267 | 89934 | 97346 |
| &nbsp;&nbsp;&nbsp;&nbsp; Italy | 83461 | 80271 | 85403 |
| &nbsp;&nbsp;&nbsp;&nbsp; United Kingdom | 79859 | 80324 | 78427 |
| &nbsp;&nbsp;&nbsp;&nbsp; Austria | 79982 | 76440 | 80355 |
| &nbsp;&nbsp;&nbsp;&nbsp; Switzerland | 73848 | 67964 | 66780 |
| &nbsp;&nbsp;&nbsp;&nbsp; Belgium/Luxembourg | 65443 | 65077 | 67497 |
| &nbsp;&nbsp;&nbsp;&nbsp; New industrial countries and emerging markets of Asia (3) | 55010 | 58590 | 60971 |
| &nbsp;&nbsp;&nbsp;&nbsp; Spain | 59135 | 53758 | 54037 |
| &nbsp;&nbsp;&nbsp;&nbsp; Japan | 21015 | 21572 | 20238 |
|  Imports from: |  |  |  |
|  **Total** | **1362315** | **1306690** | **1357465** |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; China (2) | 170951 | 156847 | 156831 |
| &nbsp;&nbsp;&nbsp;&nbsp; The Netherlands | 96613 | 93049 | 102911 |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | 94270 | 91828 | 94634 |
| &nbsp;&nbsp;&nbsp;&nbsp; Italy | 72541 | 67232 | 71323 |
| &nbsp;&nbsp;&nbsp;&nbsp; France | 69113 | 66928 | 69872 |
| &nbsp;&nbsp;&nbsp;&nbsp; New industrial countries and emerging markets of Asia (3) | 62379 | 62083 | 66716 |
| &nbsp;&nbsp;&nbsp;&nbsp; Switzerland | 55543 | 52582 | 51757 |
| &nbsp;&nbsp;&nbsp;&nbsp; Belgium/Luxembourg | 50906 | 50897 | 56141 |
| &nbsp;&nbsp;&nbsp;&nbsp; Austria | 53702 | 51953 | 53744 |
| &nbsp;&nbsp;&nbsp;&nbsp; Spain | 39122 | 39470 | 38636 |
| &nbsp;&nbsp;&nbsp;&nbsp; United Kingdom | 38577 | 36183 | 36770 |
| &nbsp;&nbsp;&nbsp;&nbsp; Japan | 22073 | 22591 | 25568 |

---

(1) Exports (f.o.b.) by country of destination, imports (c.i.f.) by country of origin. Special trade consists mainly
of goods that are imported into the Federal Republic for use, consumption, adaptation or processing, as well as goods that are produced, manufactured, adapted or processed in the Federal Republic and subsequently exported.

(2) Excludes Hong Kong.

(3) Includes Brunei Darussalam, Hong Kong, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and
Thailand.

*Source: Deutsche Bundesbank, Monatsbericht März 2026, Table XII.3.* 

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***Foreign Direct Investment***

The following table presents data with respect to foreign direct investment stocks at year-end 2023.

FOREIGN DIRECT INVESTMENT STOCKS AT YEAR-END 2023

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Outward (1) | Outward (1) | Inward (2) | Inward (2) |  |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) |  |
|  **Total (3)** |  | **1617.5** |  | **726.1** |  |
|  *Selected countries and regions* |  |  |  |  |  |
|  European Union |  | 618.3 |  | 431.9 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: European Monetary Union* | | *460.1* | | *403.4* | |
|  United Kingdom |  | 100.3 |  | 52.5 |  |
|  Switzerland |  | 3.4 |  | 51.0 |  |
|  Russia |  | 7.7 |  | 1.9 |  |
|  United States |  | 436.3 |  | 89.9 |  |
|  Canada |  | 24.4 |  | 1.5 |  |
|  Central America |  | 30.5 |  | 12.2 |  |
|  South America |  | 38.8 |  | 2.6 |  |
|  Asia |  | 235.4 |  | 59.6 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: China* | | *115.8* | | *4.5* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: India* | | *25.4* | | *0.6* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: Japan* | | *16.3* | | *33.7* | |
|  Australia |  | 23.1 |  | 3.3 |  |
|  Africa |  | 13.0 |  | 2.6 |  |
|  *Selected economic sectors of investment object* |  |  |  |  |  |
|  Manufacturing |  | 396.2 |  | 162.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: Chemicals and chemical products* | | *92.3* | | *21.6* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: Pharmaceutical products* | | *46.8* | | *17.9* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: Machinery and equipment* | | *45.1* | | *20.3* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: Motor vehicles, trailers and semi-trailers* | | *107.9* | | *7.5* | |
|  Electricity, gas, steam and air conditioning supply |  | 13.0 |  | 40.4 |  |
|  Wholesale and retail trade; repair of motor vehicles and motor cycles |  | 46.2 |  | 71.7 |  |
|  Information and communication |  | 11.4 |  | 49.6 |  |
|  Financial and insurance activities |  | 820.0 |  | 262.7 |  |
|  Real estate activities |  | 6.0 |  | 38.5 |  |
|  Professional, scientific and technical activities |  | 268.4 |  | 55.3 |  |

---

(1) German foreign direct investment abroad.

(2) Foreign direct investment in Germany.

(3) Primary and secondary direct investment (consolidated).

*Source: Deutsche Bundesbank, Direktinvestitionsstatistiken, II. Bestandsangaben über Direktinvestitionen (nach dem Erweiterten Richtungsprinzip) (https://www.bundesbank.de/de/statistiken/aussenwirtschaft/direktinvestitionen/direktinvestitionsstatistiken-804078), Tables 1I.1.b, II.2.b.* 

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**MONETARY AND FINANCIAL SYSTEM** 

**The ESCB and the Eurosystem** 

The ESCB comprises the ECB and the national central banks of all EU Member States, while the Eurosystem consists only of the ECB and the national central banks of the Euro Area Member States.

The Eurosystem is responsible for the single monetary policy for the euro area. Its decision-making bodies are the Governing Council and the Executive Board of the ECB. The national central banks of the EU Member States that are not part of the Eurosystem are represented in the General Council of the ECB, but have no voting right in the decision-making process, particularly with respect to monetary policy. The ESCB's primary objective is to maintain price stability. Without prejudice to this objective, the ESCB supports the general economic policies of the EU.

The Deutsche Bundesbank – Germany's national central bank within the ESCB – has the responsibility of implementing the single monetary policy in Germany and continues to perform various other tasks, including operating cashless payment systems, cash management and playing an important role in banking and financial market supervision, as further described below under the caption "— Financial System."

*Sources: European Central Bank, Annual Report 2016, pages 101-107 (https://www.ecb.europa.eu/pub/pdf/annrep/ar2016en.pdf); European Central Bank, About us, Our Organisation: ECB, ESCB and the Eurosystem (https://www.ecb.europa.eu/ecb/orga/escb/html/index.en.html); Deutsche Bundesbank, Tasks (https://www.bundesbank.de/en/tasks).* 

**Monetary Policy** 

***Monetary Policy Instruments of the ESCB and the ECB***

To achieve its operational goals, the ESCB conducts open market operations, offers standing facilities and requires credit institutions to maintain minimum reserves in accounts with the ESCB. Open market operations play an important role in the ESCB's monetary policy for the purposes of steering interest rates and managing the liquidity situation in the market. Available open market operations are short-term and longer-term reverse transactions, outright transactions, the issuance of debt certificates or foreign exchange swaps, and the collection of fixed-term deposits. Standing facilities are designed to provide or absorb overnight liquidity, and the imposition of minimum reserve requirements allows the ESCB to stabilize money market interest rates, create (or enlarge) a structural liquidity shortage. In addition, the ECB can also provide forward guidance, i.e., it can provide information about its future monetary policy intentions, based on its assessment of the outlook for price stability. In March 2024, the ECB completed the review of its operational framework for the implementation of monetary policy. The Governing Council agreed to continue to provide liquidity through a broad mix of instruments, including short-term and longer-term refinancing operations and, at a later stage, structural longer- term credit operations and a structural portfolio of securities.

*Sources: European Central Bank, Monetary policy & markets, Instruments, The Eurosystem's instruments (https://www.ecb.europa.eu/mopo/implement/html/index.en.html); European Central Bank, Monetary policy & markets, Decisions, statements & accounts (https://www.ecb.europa.eu/mopo/decisions/html/index.en.html).* 

***Monetary Policy Strategy and Prices***

The ECB presented its updated monetary strategy in June 2025, following the revision in 2021. Its primary goal is to maintain medium-term price stability, which is defined as a year-on-year increase in the harmonized index of consumer prices for the euro area of 2%. The 2% target is symmetric. This means that the ECB considers negative and positive deviations from the target to be equally undesirable. Appropriately forceful or persistent monetary policy action in response to large, sustained deviations of inflation from the target in either direction is required, to avoid deviations becoming entrenched through de-anchored inflation expectations. ECB policy rates are considered to be the primary monetary instrument, but the choice of other policy tools such as asset purchasing programs can also be appropriate, particularly when policy rates are close to the lower bound or to preserve the functioning of monetary policy transmission. To respond flexibly to new challenges, the Governing Council may create new policy instruments. The use of all policy instruments is to be subjected to a comprehensive proportionality assessment. The Governing Council seeks to achieve price stability over the medium term. This allows for short-term deviations of inflation from its target, provides the necessary flexibility and makes it possible to take other considerations into account. Monetary policy decisions, including the evaluation of the proportionality of its decisions and potential side effects, are based on two interdependent analyses: (1) analysis and assessment of short-to medium- term developments in inflation, economic growth and employment (economic analysis); and (2) analysis of the transmission of monetary policy to the economy and financial developments (monetary and financial analysis). Scenario and sensitivity analysis are used to take into account not only the most likely path for inflation and the economy but also related risks and uncertainties.

*Sources: European Central Bank, Monetary policy & markets, Monetary policy strategy, The ECB's monetary policy strategy statement (2025) (The ECB's monetary policy strategy statement (2025); European Central Bank, Economic Analysis* 

*(https://www.ecb.europa.eu/mopo/devel/ecana/html/index.en.html); European Central Bank, Monetary and financial analysis* 

*(https://www.ecb.europa.eu/mopo/devel/monan/html/index.en.html).* 

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The following table shows price trends in Germany for the periods indicated.

PRICE TRENDS

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 |
|  | (change from previous year in %) | (change from previous year in %) | (change from previous year in %) | (change from previous year in %) | (change from previous year in %) |
|  Harmonized index of consumer prices (HICP) | 2.3 | 2.5 | 6.0 | 8.7 | 3.2 |
|  Consumer price index (CPI) | 2.2 | 2.2 | 5.9 | 6.9 | 3.1 |
|  Index of producer prices of industrial products sold on the domestic market (1) | -1.2 | -1.8 | 0.2 | 29.8 | 9.6 |

---

(1) Excluding value-added tax.

*Source: Statistisches Bundesamt, Preise, Verbraucherpreisindizes, Harmonisierter Verbraucherpreisindex, Jahresdurchschnitte, Veränderung zum Vorjahr (https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Verbraucherpreisindex/Tabellen/Harmonisierter-Verbraucherpreisindex.html); Statistisches Bundesamt, Preise, Verbraucherpreisindizes, Verbraucherpreise, Jahresdurchschnitte, Veränderung zum Vorjahr (https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Verbraucherpreisindex/Tabellen/Verbraucherpreise-12Kategorien.html); Deutsche Bundesbank, Monatsbericht Dezember 2023, Table XI.7; Deutsche Bundesbank, Monatsbericht Februar 2026, Table XI.7.* 

**Official Foreign Exchange Reserves** 

The following table shows the breakdown of the Federal Republic's official foreign exchange reserves as of the end of the years indicated.

OFFICIAL FOREIGN EXCHANGE RESERVES OF THE FEDERAL REPUBLIC (1)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, | As of December 31, | As of December 31, |
|  | 2025 | 2024 | 2023 | 2022 | 2021 |
|  | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) | (EUR in millions) |
|  Gold | 395215 | 270580 | 201335 | 184036 | 173821 |
|  Special drawing rights | 46528 | 50888 | 48766 | 48567 | 46491 |
|  Foreign currency balances | 31851 | 33970 | 33376 | 34404 | 32649 |
|  Reserve position in the IMF | 8201 | 8267 | 8782 | 9480 | 8426 |
|  **Total** | **481795** | **363705** | **292259** | **276488** | **261387** |

---

(1) External position of the Deutsche Bundesbank in the EMU. Assets and liabilities vis-à-vis all EMU member countries and non-EMU member countries.

*Source: Deutsche Bundesbank, Monatsbericht Februar 2026, Table XII.7.* 

The Federal Republic's foreign reserve assets are managed by the Deutsche Bundesbank. Upon joining the monetary union, Euro Area Member States transferred foreign reserve assets consisting of foreign currency reserves and gold to the ECB in proportion to their share in the subscribed capital. At the end of 2025, the ECB's reserves amounted to a euro equivalent of EUR 116.8 billion. Bulgaria's adoption of the euro on 1 January 2026 was accompanied by an obligation for the Bulgarian National Bank to transfer additional foreign reserve assets amounting to EUR 1.48 billion to the ECB. The ECB manages the foreign reserve assets transferred to it. The foreign reserve assets not transferred to the ECB continue to be held and managed by the national central banks of the Euro Area Member States. In order to ensure consistency within the single monetary and foreign exchange policies of the EMU, the ECB monitors and coordinates market transactions conducted with those assets.

*Sources: European Central Bank, Annual Report 1998, page 74 (https://www.ecb.europa.eu/pub/pdf/annrep/ar1998en.pdf); European Central Bank, Annual Accounts 2025, 1.3.1 Balance Sheet* 

*(https://www.ecb.europa.eu/press/annual-reports-financial-statements/annual/annual-accounts/html/ecb.annualaccounts2025~ba3b593c99.en.html#toc16);European Central Bank, Decision (EU) 2026/115 as of December 31, 2025* 

*(https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202600115#ntr11-L_202600115EN.000101-E0011).* 

------

**External Positions of Banks** 

The following table shows the external assets and liabilities of the Deutsche Bundesbank and the banks (monetary financial institutions) of the Federal Republic as of the end of each of the years indicated.

EXTERNAL FINANCIAL ASSETS AND LIABILITIES BY SECTOR

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2025 | 2024 | 2024 | 2023 | 2023 | 2022 | 2022 | 2021 | 2021 |  |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) |  |
|  Deutsche Bundesbank |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Assets |  | 1556.4 |  | 1464.4 |  | 1455.8 |  | 1617.1 |  | 1592.8 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *of which: clearing accounts within ESCB (1)* | | *1023.5* | | *1046.3* | | *1093.4* | | *1269.1* | | *1260.7* | |
| &nbsp;&nbsp;&nbsp;&nbsp; Liabilities (2) |  | 702.7 |  | 732.2 |  | 779.8 |  | 919.4 |  | 1009.5 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net position |  | 833.7 |  | 741.2 |  | 675.9 |  | 697.6 |  | 583.3 |  |
|  Banks |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans to foreign banks |  | 1410.4 |  | 1305.9 |  | 1166.9 |  | 926.6 |  | 1100.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans to foreign non-banks |  | 1198.2 |  | 1066.7 |  | 960.4 |  | 913.7 |  | 871.2 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans from foreign banks |  | 990.4 |  | 962.3 |  | 923.8 |  | 998.4 |  | 914.6 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans from foreign non-banks |  | 435.5 |  | 403.2 |  | 380.6 |  | 370.3 |  | 288.2 |  |

---

(1) Consists mainly of net claims from the interbank payment system for the real-time processing of cross-border
transfers throughout the EMU (TARGET2).

(2) Including estimates of currency in circulation abroad.

*Source: Deutsche Bundesbank, Monatsbericht März 2026, Tables IV.4 and XII.7.* 

**Foreign Exchange Rates and Controls** 

Since its introduction in 1999, the euro has become the second most widely used currency internationally. It is recognized by the IMF as a freely usable currency. Neither currency transactions nor capital market transactions require licenses or other permissions. However, in both cases entities or individuals providing related services on a commercial basis must be licensed. Gold may be imported and exported freely, subject only to the levy of VAT on some transactions.

*Sources: International Monetary Fund, Selected Decisions and Selected Documents of the IMF, Forty-Fourth Issue—Freely Usable Currencies, as updated December 31, 2024 (https://www.elibrary.imf.org/downloadpdf/display/book/9798229008341/9798229008341.pdf); Bank for International Settlements, Triennial Central Bank Survey, OTC Foreign exchange turnover in April 2025, September 2025, Table "OTC foreign exchange turnover by instrument, currency, counterparty and country", page 1 (https://www.bis.org/statistics/rpfx25_fx_annex.pdf); Bundesanstalt für Finanzdienstleistungsaufsicht, Banken, Finanzdienstleister und Wertpapierinstitute, Markteintritt, Wertpapierdienstleistungen, as updated on September 12, 2024 (https://www.bafin.de/DE/Aufsicht/BankenFinanzdienstleister/Markteintritt/Wertpapierdienstleistungen/wertpapierdienstleistungen_node.html#doc19645032bodyText1); Bundesanstalt für Finanzdienstleistungsaufsicht, Banken, Finanzdienstleister und Wertpapierinstitute, Markteintritt, Finanzdienstleistungen, as updated on November 11, 2025 (https://www.bafin.de/DE/Aufsicht/BankenFinanzdienstleister/Markteintritt/Finanzdienstleistungen/finanzdienstleistungen_artikel.html); International Monetary Fund, Annual Report on Exchange Arrangements and Exchange Restrictions 2023, published on December 19, 2024, page 1890 (https://www.elibrary.imf.org/display/book/9798400260391/9798400260391.xml?cid=lk-com-dsp-imf.org).* 

The following table shows the annual average exchange rates for selected currencies in relation to the euro for the years indicated.

ANNUAL AVERAGE EXCHANGE RATES OF THE EURO (1)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | 2025 | 2024 | 2023 | 2022 | 2021 |
|  U.S. dollars per euro | 1.1300 | 1.0824 | 1.0813 | 1.0530 | 1.1827 |
|  Pound sterling per euro | 0.85679 | 0.84662 | 0.86979 | 0.85276 | 0.85960 |
|  Japanese yen per euro | 169.04 | 163.85 | 151.99 | 138.03 | 129.88 |
|  Swiss franc per euro | 0.9370 | 0.9526 | 0.9718 | 1.0047 | 1.0811 |
|  Chinese yuan per euro | 8.1185 | 7.7875 | 7.6600 | 7.0788 | 7.6282 |

---

(1) Calculated from daily values.

*Source: Deutsche Bundesbank, Monatsbericht Februar 2026, Table XII.9.* 

------

**Financial System** 

***German Financial System***

***Overview***. As of December 31, 2025, 1,256 monetary financial institutions in Germany reported an aggregate balance sheet total of EUR 10,998 billion to the Deutsche Bundesbank. According to the Deutsche Bundesbank's classification, these institutions included:

&nbsp;&nbsp;&nbsp;&nbsp;• 227 commercial banks, with an aggregate balance sheet total of EUR 5,273.2 billion;

&nbsp;&nbsp;&nbsp;&nbsp;• 342 savings banks, with an aggregate balance sheet total of EUR 1,619.5 billion;

&nbsp;&nbsp;&nbsp;&nbsp;• the six regional institutions of those savings banks, including DekaBank Deutsche Girozentrale (the central asset
managing institution of the German savings banks) and five Landesbanken (German public law financial institutions traditionally focusing on the banking business for and in the Land in which they operate), with an aggregate balance sheet total of EUR
906 billion;

&nbsp;&nbsp;&nbsp;&nbsp;• 17 special-purpose credit institutions, including KfW, KfW IPEX-Bank, promotional banks of the federal states
(Landesförderinstitute), and, since July 2016, DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main (DZ Bank), the only remaining central institution of German credit cooperatives, with an aggregate balance sheet total of EUR
1,524 billion;

&nbsp;&nbsp;&nbsp;&nbsp;• 645 credit cooperatives, with an aggregate balance sheet total of EUR 1,237.8 billion;

&nbsp;&nbsp;&nbsp;&nbsp;• 6 mortgage banks, with an aggregate balance sheet total of EUR 177.2 billion;

&nbsp;&nbsp;&nbsp;&nbsp;• 13 building and loan associations, with an aggregate balance sheet total of EUR 260.3 billion; and

&nbsp;&nbsp;&nbsp;&nbsp;• 131 subsidiaries and branches of foreign banks located in the Federal Republic with an aggregate balance sheet
total of EUR 2,116 billion. These institutions, which are majority-owned by foreign banks, are also included in the totals of the other categories of banks listed above.

*Source: Deutsche Bundesbank, Monthly Report February 2026, Table IV.2 (https://publikationen.bundesbank.de/caas/v1/media/988404/data/825f9fcee0b314336d07b4f8cecbb07b)* 

The KWG currently regulates all banks except for the Deutsche Bundesbank and KfW (although it does regulate KfW IPEX-Bank).

Many important provisions of the KWG have become applicable by analogy to KfW with effect from January 1, 2016. For more information on the application of the KWG to KfW, see "KfW—General—Supervision and Regulation—Regulation." German commercial banking institutions operate as "universal" banks and are not restricted by law or otherwise from offering a complete range of diverse financial services.

***Supervision***. BaFin is responsible for the integrated supervision of financial services. Its primary objective is to ensure the proper functioning, stability and integrity of Germany as a financial center in the context of European integration and international cooperation, as well as to strengthen collective consumer protection through its regulatory actions. BaFin, which is subject to the legal and technical oversight of the Federal Ministry of Finance, operates exclusively in the public interest. It aims to counteract risks to the assets entrusted to financial institutions, including banks and insurance companies (solvency supervision), and to safeguard fair and transparent conditions in the markets (market supervision). In addition, BaFin has an investor protection role in that it seeks to prevent unauthorized financial business from being carried out.

The Deutsche Bundesbank is closely involved in the ongoing supervision of credit institutions by BaFin and has been assigned a substantial number of the ongoing operational tasks in banking supervision. Furthermore, until December 31, 2025, the German Federal Agency for Financial Market Stabilization (*Bundesanstalt für Finanzmarktstabilisierung*, or "FMSA") supervised two wind-up institutions, Erste Abwicklungsanstalt and FMS Wertmanagement, as well as Portigon AG (the legal successor of former Landesbank WestLB, which is in the process of being wound-up), all of which were founded under its auspices in order to stabilize the financial market (see "—Wind-up Institutions"). On January 1, 2026, legal supervision was transferred to the Federal Ministry of Finance.

In November 2014, the SSM – as one of the pillars of the Banking Union – became operational. Under the SSM, the ECB is the central prudential supervisor of financial institutions in the euro area as well as in non-euro area EU Member States that choose to join the SSM. The ECB directly supervises the most significant banks, while the national supervisors continue to monitor the remaining banks. The ECB and the national supervisors work closely together to ensure the banks' compliance with EU banking regulations and to be able to address issues early on.

------

In order to facilitate the timely identification of macroprudential risks to financial stability, the Financial Stability Committee (*Ausschuss für Finanzstabilität*, or "FSC"), which consists of representatives of the Federal Ministry of Finance, the Deutsche Bundesbank and BaFin, was established in March 2013 based on the Financial Stability Act (*Gesetz zur Überwachung der Finanzstabilität, Finanzstabilitätsgesetz*). On basis of the Financial Stability Act and due to its macroeconomic and financial market expertise, the Deutsche Bundesbank is responsible for contributing towards safeguarding financial stability and tasked with analyzing all relevant factors in order to identify threats to financial stability. If appropriate, the Deutsche Bundesbank may propose and submit warnings or recommendations for corrective measures to the FSC, which may pass resolutions with respect thereto and publish them if appropriate. The recipients of such warnings or recommendations are required to report on the implementation of corrective measures. In addition, the FSC is tasked with discussing issues relevant for financial stability, coordinating and strengthening the cooperation of its members during times of crisis, discussing how to deal with warnings or recommendations issued by the European Systemic Risk Board ("ESRB") and reporting to the Bundestag on a yearly basis.

For instance, based on the assessment of the risk situation in Germany as well as the development of supporting indicators, BaFin decided to increase the ratio of the national anticyclical capital buffer to 0.75% from the first quarter of 2022 onwards. The associated requirements for hard equity became applicable as of February 1, 2023. In January 2026, BaFin confirmed that the national anticyclical capital buffer of 0.75% remains appropriate. BaFin decided on April 30, 2025 to lower the sectoral systemic risk buffer for residential mortgage loans from 2 % to 1 % as of May 1, 2025. Vulnerabilities in the German residential real estate market have eased in an orderly manner but have not yet completely dissolved. In light of the changed risk environment, the FSC welcomed the decision of BaFin.

*Sources: Bundesministerium der Justiz, Gesetz über das Kreditwesen (https://www.gesetze-im-internet.de/kredwg/index.html); Federal Financial Supervisory Authority, BaFin, Functions & history (https://www.bafin.de/EN/DieBaFin/AufgabenGeschichte/aufgabengeschichte_node_en.html); Deutsche Bundesbank, Tasks, Banking supervision (https://www.bundesbank.de/en/tasks/banking-supervision); Federal Financial Supervisory Authority, BaFin, Supervisory Guideline — Guideline on carrying out and ensuring the quality of the ongoing monitoring of credit and financial services institutions by the Deutsche Bundesbank, May 21, 2013, revised on December 19, 2016. (https://www.bafin.de/SharedDocs/Veroeffentlichungen/EN/Aufsichtsrecht/Richtlinie/rl_130521_aufsichtsrichtlinie_en.html); Federal Agency for Financial Market Stabilisation, FMSA (https://www.fmsa.de/en/); Portigon AG: Unternehmensinformationen (https://www.portigon.de/portigon-ag/unternehmensinformationen.html); European Union, EUR-Lex, Single supervisory mechanism (https://eur-lex.europa.eu/EN/legal-content/glossary/single-supervisory-mechanism.html); Deutsche Bundesbank, Tasks, Financial and monetary system, Financial and monetary stability, Macroprudential surveillance by the G-FSC (https://www.bundesbank.de/en/tasks/financial-and-monetary-system/financial-and-monetary-stability/macroprudential-surveillance-g-fsc-/macroprudential-surveillance-by-the-g-fsc-625732); Federal Financial Supervisory Authority, BaFin, Law & Regulation, Allgemeinverfügung zur Anordnung eines Kapitalpuffers für systemische Risiken nach § 10e Kreditwesengesetz published on April 30, 2025 (https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Aufsichtsrecht/Verfuegung/vf_250430_allgvfg_kapitalpuffer.html?nn=19659504); Federal Financial Supervisory Authority, BaFin, Companies, Banks & financial services providers, Capital requirements, Countercyclical capital buffer, updated on January 1, 2026 (https://www.bafin.de/EN/Aufsicht/BankenFinanzdienstleister/Eigenmittelanforderungen/Kapitalpuffer/antizyklischer_kapitalpuffer_artikel_en.html),. German Financial Stability Committee welcomes the Federal Financial Supervisory Authority's decision to reduce the sectoral sys-temic risk buffer to 1% (https://www.afs-bund.de/afs/Content/EN/News/FSC-activities/2025/2025-04-30-reduce-sectoral-systemic-risk-buffer.html).* 

***Bank Recovery and Resolution***. Between January 1, 2015, and December 31, 2017, the FMSA (see "—Supervision") acted as the German national resolution authority for banks. The FMSA was thus responsible for the recovery and resolution of all banks in Germany under the European Bank Recovery and Resolution Directive ("BRRD"), which were not directly supervised by the ECB within the framework of the SSM (see "—European Financial System—European System of Financial Supervision and European Banking Union"). The BRRD was adopted in May 2014 to provide authorities with comprehensive and effective arrangements to deal with failing banks at the national level and with cooperation arrangements to tackle cross-border banking failures. The BRRD includes rules to set up national resolution funds, which must be established by each EU Member State, and it requires banks to prepare recovery plans to overcome financial distress. Since the establishment of the SRF at the European level in 2016, the contributions raised by the national resolution authorities of participating Member States have in great part been transferred to the SRF pursuant to the intergovernmental agreement on the transfer and mutualisation of contributions to the SRF.

On January 1, 2018, FMSA's duties deriving from its role as the national resolution authority were integrated into BaFin as a new and independently operating division. At the same time, FMSA's responsibilities of administering and managing the Financial Market Stabilization Fund ("*Sondervermögen Finanzmarktstabilisierungsfonds*," or "FMS") were incorporated into the Federal Republic of Germany – Finance Agency (*Bundesrepublik Deutschland – Finanzagentur GmbH*). The FMS was originally created during the financial crisis on October 17, 2008. Until the Single Resolution Mechanism ("SRM") became fully operational on January 1, 2016, and functionally replaced the FMS, the latter was responsible for stabilizing German banks by extending guarantees and injecting capital. All guarantees granted were repaid without any default. Capital measures provided by the FMS amounting to EUR 13.1 billion were still outstanding as of December 31, 2024.

------

For more information on the SRF and the SRM, see "—European Financial System—European System of Financial Supervision and European Banking Union."

*Sources: Federal Financial Supervisory Authority, Companies, Bank resolution (https://www.bafin.de/EN/Aufsicht/Abwicklung/Aufgaben_NAB_node_en.html); Federal Financial Supervisory Authority, Companies, Banks & financial services providers, Measures, Recovery and resolution (https://www.bafin.de/EN/Aufsicht/BankenFinanzdienstleister/Massnahmen/SanierungAbwicklung/sanierung_abwicklung_node_en.html); European Commission, Banking & insurance, Banking regulation, Bank recovery and resolution (https://finance.ec.europa.eu/banking/banking-regulation/bank-recovery-and-resolution_en); Bundesministerium der Jusitz und für Verbraucherschutz, Verordnung über die Erhebung der Beiträge zum Restrukturierungsfonds für Kreditinstitute (https://www.gesetze-im-internet.de/rstruktfv_2015/index.html#BJNR126800015BJNE000200000); Council of the European Union, Agreement on the Transfer and Mutualisation of Contributions to the Single Resolution Fund (https://data.consilium.europa.eu/doc/document/ST%208457%202014%20INIT/EN/pdf); FSMA – Federal Agency for Financial Market Stabilisation (https://www.fmsa.de/en/); Bundesrepublik Deutschland – Finanzagentur GmbH, FMS, Financial Market Stabilisation Fund (https://www.deutsche-finanzagentur.de/en/stabilisation-measures/financial-market-stabilisation-fund/overview)* 

***Wind-up Institutions***. In the wake of the global financial crisis, two wind-up institutions (*Abwicklungsanstalten*) for troubled German banks were established. The first wind-up institution, Erste Abwicklungsanstalt, was established in December 2009 to liquidate a portfolio of EUR 77.5 billion assumed from WestLB. It assumed a second portfolio consisting of an asset portfolio worth EUR 72.3 billion and a trading portfolio with a market value of approximately EUR 52.1 billion following the restructuring of WestLB. As of September 30, 2025, the combined portfolios had been reduced to EUR 8.0 billion.

The second wind-up institution, FMS Wertmanagement, assumed a portfolio of EUR 175.7 billion from Hypo Real Estate Group in October 2010 to support restructuring efforts. In December 2014, FMS Wertmanagement acquired DEPFA Bank plc ("DEPFA"), which, as of December 31, 2013, had consolidated total assets amounting to EUR 49.1 billion from Hypo Real Estate Holding AG. In November 2021, FMS Wertmanagement closed the sale of DEPFA to BAWAG P.S.K. AG. As of December 31, 2025, FMS Wertmanagement's portfolio had a nominal value of EUR 36,6billion.

*Sources: Erste Abwicklungsanstalt, Geschäftsbericht 2025 (https://aa1.de/wp-content/uploads/2026/04/GB-2025_de.pdf); FMS Wertmanagement AöR, Annual Report 2025 (https://www.fms-wm.de/images/GB%20Unterseite/GB%202025/Geschaftsbericht%20FMS-WM%2031.12.2025.pdf.* 

***European Financial System***

***European System of Financial Supervision and European Banking Union***. The European system of financial supervision became operational on January 1, 2011. At the macro-financial level, the ESRB was established, which provides macro-prudential oversight of the financial system. The ESRB's role is to monitor and assess potential risks to the stability of the financial system. If necessary, it will issue risk warnings and recommendations for remedial action and will monitor their implementation. The ESRB is chaired by the President of the ECB.

At the micro-financial level, three supervisory authorities were established:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the European Banking Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the European Insurance and Occupational Pensions Authority; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the European Securities and Markets Authority.

The three European Supervisory Authorities ("ESAs") cooperate with the supervisory authorities of the EU Member States. National authorities are responsible for the day-to-day supervision of individual financial institutions, whereas the ESAs are responsible for ensuring that a single set of harmonized rules and consistent supervisory practices are applied by supervisory authorities of the EU Member States. The ESAs have, for example, the power to settle disputes among national financial supervisors by imposing legally binding mediation and to impose temporary bans on risky financial products or activities.

One of the key elements of the Banking Union, which was established in the wake of the European sovereign debt crisis, is the SSM composed of the ECB and the national supervisory authorities of participating EU Member States, which, as of March 2026, are the Euro Area Member States. The main aims of the SSM, which became operational in November 2014, are to contribute to the safety and soundness of credit institutions and the stability of the European financial system and to ensure consistent supervision. In its role within the SSM, the ECB directly supervises 112 significant banks and banking groups, which represent over 80 % of the total assets on the aggregated balance sheets of all credit institutions under its supervision. For the remaining banks, the ECB is responsible for setting and monitoring the supervisory standards and for working closely with the national competent authorities in the supervision of these banks.

Another key element of the Banking Union is the SRM which was established by a regulation adopted in July 2014 and became fully operational starting January 1, 2016 with the purpose of ensuring the orderly resolution of failing banks. The SRM consists of the Single Resolution Board ("SRB") and the national resolution authorities of participating Member States. The SRB has broad powers in cases of bank resolution and manages the SRF. The SRB is responsible for the planning and resolution phases of failures of cross-border banks and banks directly supervised by the ECB, while national resolution authorities are responsible for all other banks under the BRRD. However, the SRB will always be responsible if the resolution of a bank requires access to the SRF. The SRF was built up over a period of eight years since 2016 and reached its target level of at least 1% of the amount of covered deposits of all credit institutions authorized in all the participating EU Member States at the end of 2023. As of December 31, 2025, the financial means available in the SRF amounted to EUR 81 billion, which are fully mutualized between participating EU Member States. The SRB continues to assess on an annual basis whether the available financial means have diminished below the target level of at least 1% in the relevant contribution period. In such event, further contributions to the SRF may be required. Banks have been making annual contributions to the SRF calculated on the basis of their liabilities, excluding own funds and covered deposits, and adjusted for risk. Companies defined in article 2 paragraph 5 of the EU Capital Requirements Directive IV (CRD IV), including KfW, are not required to contribute to the fund. As part of its pending reform, the ESM would be given the function of a backstop for the SRF. The backstop would be provided through public funds to offer immediate support and confidence to the market and would almost double the size of the SRF. The funds would have to be repaid by all banks of the Banking Union in the following years.

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In response to the global economic and financial crisis, regulatory authorities and central banks launched a comprehensive regulatory reform program. As a result, in December 2010, the Basel Committee on Banking Supervision launched a first package, typically referred to as Basel III, of new standards on bank capital adequacy and liquidity to enhance the banking regulatory framework. In order to implement Basel III into EU law, previous EU capital requirement directives were replaced by the Capital Requirements Regulation (CRR), a regulation establishing prudential requirements, and the Capital Requirements Directive IV (CRD IV), a directive governing access to deposit-taking activities, both of which entered into force on January 1, 2014 and have since been gradually implemented in the EU Member States. Further measures were implemented by changes to CRR and CRD adopted by the European legislators in 2019 as described below. A second reform package was endorsed by the Basel Committee on Banking Supervision in December 2017 to finalize the post-crisis reforms. It aims to reduce excessive variability in the calculation of risk-weighted assets. In October 2021, the European Commission presented legislative proposals for further amendments to the CRR and CRD, and to finalize the implementation of the Basel III regulatory reforms in the EU as described below.

In May 2019, European legislators adopted a package of revised rules aimed at reducing risks in the EU banking sector. Most new rules started to apply in mid-2021. The package comprised two regulations and two directives, relating to bank capital requirements (amendments to CRR (CRR II) and CRD (CRD V)) and the recovery and resolution of banks in difficulty (amendments to BRRD and the Single Resolution Mechanism Regulation (SRMR)) and implemented reforms agreed at the international level following the 2007-2008 financial crisis to strengthen the banking sector and to address outstanding challenges to financial stability. Among the core measures agreed to reduce risk in the banking system, the package enhances the framework for bank resolution. It requires global-systemically important institutions (G-SIIs) to have more loss-absorbing and recapitalization capacity by setting the minimum requirements with respect to the amount and quality of own funds and eligible liabilities (MREL) to ensure an effective and orderly "bail-in" process. It also provides provisional safeguards and possible additional actions for resolution authorities. Additionally, the package strengthens bank capital requirements to reduce incentives for excessive risk taking, by including a binding leverage ratio, a binding net stable funding ratio, and setting risk sensitive rules for trading in securities and derivatives.

In December 2023, the final elements for the implementation of Basel III in the EU were agreed by the Council and Parliament. The amended CRR rules (CRR III) and the provisions of the renewed CRD (CRD VI) entered into force on in 2024. One of the main elements of the banking package is the introduction of the output floor, which works as a lower limit on the capital requirements that banks calculate when using their internal models and aims to reduce the excessive variability of banks' capital requirements, as calculated with internal models. The legislative package also implements the Basel standard in relation to credit risks, market risks and operational risks, while taking into account specific features of the EU banking sector. Furthermore, the amendment strengthens the provisions related to environmental, social and governance risks as well as the rules applicable to the suitability of bank managers and key function holders (ie., the fit and proper assessment). While most of the Basel III requirements set out in the amended CRR and CRD became applicable from January 1, 2025, the European Commission has, by means of a delegated act, postponed the application of the market risk rules under the Fundamental Review of the Trading Book until January 1, 2027. This decision was justified by delays or deviations in the Basel III implementation by other major global jurisdictions.

*Sources: European Commission, Regulation, Supervision, European system of financial supervision (https://finance.ec.europa.eu/regulation-and-supervision/european-system-financial-supervision_en); European Central Bank, About, European System of Financial Supervision (https://www.bankingsupervision.europa.eu/about/esfs/html/index.en.html); Federal Financial Supervisory Authority, European Supervision, Microprudential Supervision (https://www.bafin.de/EN/Internationales/EuropaeischeAufsicht/Mikro/mikro-aufsicht_node_en.html;jsessionid=0B170CB0AAF147A286FA5A3057404506.internet971); European Commission, Banking & insurance, Banking Union (https://finance.ec.europa.eu/banking/banking-union_en); European Council, Council of the European Union, Policies, Banking Union (https://www.consilium.europa.eu/en/policies/banking-union/); European Central Bank, ECB assumes responsibility for euro area banking supervision, press release of November 4, 2014 (https://www.ecb.europa.eu/press/pr/date/2014/html/pr141104.en.html); European Central Bank, About, Single Supervisory Mechanism (https://www.bankingsupervision.europa.eu/about/thessm/html/index.en.html); European Central Bank - Banking Supervision, List of supervised entities (https://www.bankingsupervision.europa.eu/ecb/pub/pdf/ssm.listofsupervisedentities202602.en.pdf?ff15bbcb3c1ce8605c4f52f5cf24d5ac); Single Resolution Board, About, The SRB in the Banking Union, Single Resolution Mechanism (https://www.srb.europa.eu/en/content/single-resolution-mechanism-srm); European Commission, Single Resolution Mechanism to come into effect for the Banking Union, press release of December 31, 2015 (https://ec.europa.eu/commission/presscorner/detail/en/IP_15_6397); Single Resolution Board, Resolution, What is a bank resolution?, Banks under the SRB's remit (https://www.srb.europa.eu/en/content/banks-under-srbs-remit); Single Resolution Board, The Single Resolution Fund (https://www.srb.europa.eu/en/single-resolution-fund); Single Resolution Board, News and Media, For the third year, the SRB will not impose Single Resolution Fund levies , press release of February 13, 2026 (https://www.srb.europa.eu/en/content/third-year-srb-will-not-impose-single-resolution-fund-levies); Bundesministerium der Justiz, Gesetz zur Errichtung eines Restrukturierungsfonds für Kreditinstitute (https://www.gesetze-im-internet.de/rstruktfg/); European Stability Mechanism, About us, ESM Reform (https://www.esm.europa.eu/about-esm/esm-reform); European Banking Authority, Activities, Implementing Basel III in Europe, The Basel framework: the global regulatory standards for banks (https://www.eba.europa.eu/activities/basel-framework-global-regulatory-standards-banks); Bank for International Settlements, Committees & associations, Basel Committee on Banking Supervision, Basel III: Finalising Post-Crisis Reforms (https://www.bis.org/bcbs/publ/d424.htm); European Council, Council of the European Union, Banking Union: Council adopts measures to reduce risk in the banking system, press release of May 14, 2019 (https://www.consilium.europa.eu/en/press/press-releases/2019/05/14/banking-union-council-adopts-measures-to-reduce-risk-in-the-banking-system/); European Commission, Banking Package 2021: new EU rules to strengthen banks' resilience and better prepare for the future, press release of October 27, 2021 (https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_21_5401/IP_21_5401_EN.pdf); European Commission, Latest updates on the banking package, supplementary information of December 14, 2023 (https://finance.ec.europa.eu/news/latest-updates-banking-package-2023-12-14_en); European Council, Council of the European Union, Basel III reforms: new EU rules to increase banks' resilience to economic shocks, press release of May 30, 2025 (https://www.consilium.europa.eu/en/press/press-releases/2024/05/30/basel-iii-reforms-new-eu-rules-to-increase-banks-resilience-to-economic-shocks/); European Commission, Commission seeks input on Basel III market risk rules for banks, News Article of November 6, 2025 (https://finance.ec.europa.eu/news/commission-seeks-input-basel-iii-market-risk-rules-banks-2025-11-06_en).* 

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**Securities Market** 

The Federal Republic's securities market is among Europe's largest. Trading in listed securities is not legally or otherwise confined to the stock exchanges. It is estimated, however, that most transactions in equity securities are executed through stock exchanges. By contrast, debt securities, although typically listed, are predominantly traded over-the-counter.

Highly developed secondary markets, combined with the distribution capabilities of an extensive network of financial institutions, provide the basis for the Federal Republic's position in the world's capital markets. Equity and debt issues are generally underwritten and distributed through banking syndicates, which typically include commercial banks as well as certain regional and specialized institutions. In Germany, the regulated securities markets are situated in Berlin, Dusseldorf, Frankfurt am Main, Hamburg, Hanover, Munich and Stuttgart. Additional regulated financial markets include the European Energy Exchange in Leipzig, an energy and energy-related commodities exchange, and the Eurex Terminbörse in Frankfurt am Main, a derivatives exchange market. All of the above are recognized as regulated markets of the EU according to Article 56 of Directive 2014/65/EU on Markets in Financial Instruments and comply with globally accepted regulatory standards.

Based on total turnover on German securities exchanges, the Frankfurt Stock Exchange, operated by Deutsche Börse AG, is by far the most important stock exchange in the Federal Republic.

*Sources: European Union, Directive 2014/65/EU of May 15, 2014 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014L0065); European Securities and Markets Authority, MiFID/UCITS/AIFMD/EUSEF/EUVECA/ECSPR entities (https://registers.esma.europa.eu/publication/searchRegister?core=esma_registers_upreg); Deutsche Börse Group, Markets & Services, Trading, Frankfurt Stock Exchange, The Frankfurt Stock Exchange (https://www.deutsche-boerse.com/dbg-en/markets-services/trading/frankfurt-stock-exchange/management-board).* 

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**PUBLIC FINANCE** 

**Receipts and Expenditures** 

The Federal Government, each of the Länder governments and each of the municipalities (Gemeinden) have separate budgets. The federal budget is the largest single public budget.

The fiscal year of the Federal Republic is the calendar year. The annual federal budget is passed by an act of Parliament. On the basis of a proposal prepared by the Ministry of Finance, the Federal Government introduces the federal budget bill to the Parliament, generally in the summer of each year. The proposal has to pass through three Bundestag sessions, the budget committee of the Bundestag, and the Bundesrat, which deliberates on the proposal twice. The final vote on the proposal is taken by the Bundestag in its third session.

In addition to the federal, Länder and municipal budgets, there are separate budgets for the social security funds and various special funds (*Sondervermögen*) of the federal administration and the Länder, as well as other extra-budgetary entities at all levels of government that are created for specific public purposes. General government, as defined in the national accounts, comprises all these different levels of government activity.

Total consolidated general government revenue, as presented in the national accounts, amounted to EUR 2,140.2 billion in 2025, with tax revenue of EUR 1,031.543 billion and net social contributions of EUR 822.9 billion.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (February 2026), Table 3.4.3.2.* 

In 2025, VAT and the taxes on income and wealth, as presented in the national accounts, amounted to EUR 310.6 billion and EUR 571.4 billion, respectively. These joint taxes are distributed among the Federal Government, the Länder governments and municipal authorities, according to predetermined formulae. In addition to joint taxes, the Federal Government, the Länder governments and the municipal authorities each levy special taxes, for example, on tobacco and beer.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (February 2026), Table 3.4.3.16.* 

Consolidated general government expenditure in 2025, as presented in the national accounts, amounted to a total of EUR 2,259.3 billion. The most significant consolidated general government expenditures were monetary social benefits (EUR 749.5 billion), social benefits in kind (EUR 414.9 billion) and employee compensation (EUR 384.3 billion). Other significant consolidated general government expenditures included intermediate consumption (EUR 289.1 billion), gross capital formation (EUR 144.8 billion), subsidies (EUR 53.9 billion) and interest on public debt (EUR 49.5 billion).

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (February 2026), Table 3.4.3.2.* 

GENERAL GOVERNMENT ACCOUNTS (1)

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 |  |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) |  |
|  Federal Government, Länder governments and municipalities |  |  |  |  |  |  |  |  |  |  |  |
|  Revenue |  | 1355.8 |  | 1305.5 |  | 1253.1 |  | 1239.9 |  | 1155.7 |  |
|  *of which: Current taxes (2)* | | *1.031.5* | | *996.6* | | *962.0* | | *965.4* | | *896.7* | |
|  Expenditure |  | 1473.2 |  | 1409.0 |  | 1367.1 |  | 1324.8 |  | 1274.7 |  |
|  **Balance** |  | **-117.4** |  | **-103.5** |  | **-114.0** |  | **-84.9** |  | **-119.1** |  |
|  Social security funds |  |  |  |  |  |  |  |  |  |  |  |
|  Revenue |  | 936.0 |  | 865.6 |  | 827.9 |  | 812.4 |  | 781.7 |  |
|  Expenditure |  | 937.7 |  | 877.5 |  | 819.1 |  | 803.6 |  | 779.3 |  |
|  **Balance** |  | **-1.7** |  | **-11.8** |  | **8.8** |  | **8.8** |  | **2.4** |  |
|  General government |  |  |  |  |  |  |  |  |  |  |  |
|  Revenue |  | 2140.2 |  | 2024.4 |  | 1926.2 |  | 1863.1 |  | 1749.2 |  |
|  Expenditure |  | 2259.3 |  | 2139.7 |  | 2031.4 |  | 1939.2 |  | 1865.8 |  |
|  **Balance** |  | **-119.1** |  | **-115.3** |  | **-105.2** |  | **-76.1** |  | **-116.6** |  |

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(1) Definition according to the national accounts.

(2) Excluding taxes of domestic sectors paid to EU.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 - 2025 (March 2026), Tables 3.4.3.2, 3.4.3.3 and 3.4.3.7.* 

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FEDERAL GOVERNMENT ACCOUNTS (1)

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 |  |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) |  |
|  Revenue |  | 593.0 |  | 580.3 |  | 551.0 |  | 534.2 |  | 505.7 |  |
|  *of which: Current taxes (2)* | | *485.7* | | *471.5* | | *450.9* | | *449.0* | | *422.3* | |
|  Expenditure |  | 672.5 |  | 641.2 |  | 643.7 |  | 645.3 |  | 637.8 |  |
|  **Balance** |  | **-79.6** |  | **-60.9** |  | **-92.7** |  | **-111.2** |  | **-132.1** |  |

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(1) Definition according to the national accounts.

(2) Excluding taxes of domestic sectors paid to EU.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 - 2025 (March 2026), Table 3.4.3.4.* 

GENERAL GOVERNMENT EXPENDITURE: BREAKDOWN BY FUNCTIONS (1)

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) |
|  General public services | 284.0 | 277.9 | 256.3 | 232.9 | 219.5 |
|  Defense | 68.8 | 58.6 | 52.7 | 46.1 | 41.9 |
|  Public order and safety | 74.4 | 70.7 | 67.8 | 63.0 | 60.8 |
|  Economic affairs | 248.0 | 234.6 | 246.6 | 223.2 | 240.4 |
|  Environmental protection | 24.6 | 24.5 | 23.2 | 20.5 | 20.0 |
|  Housing and community amenities | 20.5 | 20.5 | 18.3 | 18.8 | 15.4 |
|  Health | 354.4 | 329.3 | 312.2 | 329.2 | 313.3 |
|  Recreation, culture and religion | 47.1 | 46.0 | 42.1 | 39.8 | 37.4 |
|  Education | 207.3 | 194.6 | 187.9 | 174.0 | 163.7 |
|  Social protection | 930.4 | 883.2 | 824.4 | 791.8 | 753.4 |
|  **Total expenditure** | **2259.3** | **2139.7** | **2031.4** | **1939.2** | **1865.8** |

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(1) Definition according to the national accounts.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 - 2025 (March 2026), Table 3.4.3.11.* 

**Germany's General Government Deficit/Surplus and General Government Gross Debt** 

Germany's General Government Deficit/Surplus and General Government Gross Debt

For purposes of the EU Member States' reports to the European Commission under the EDP, the general government or "Maastricht" deficit/surplus refers to the difference between consolidated public sector revenue and consolidated public sector expenditure and is the balancing item "net borrowing/net lending" of the general government (central government, state government, local government and social security funds) as defined in ESA 2010. After seven annual surpluses in a row, the German general government budget balance turned negative in 2020 due to the impact of the COVID-19 pandemic. Following a general government deficit of 4.4% in 2020, 3.2% in 2021, 1.9% in 2022, 2.5% in 2023, 2.7% in 2024, the German general government deficit amounted to EUR 119.1 billion or again 2.7% of nominal GDP in 2025, which, for the fourth year in a row, was below the EU's 3% reference value for the general government deficit. The German general government gross debt-to-GDP ratio increased from 62.2% in 2024 to 63.5 in 2025, which is above the EU's respective reference value of 60%.

On March 23, 2020, the respective Ministers of Finance of the EU Member States agreed with the assessment of the European Commission that the condition for the use of the general escape clause under the SGP – a severe economic downturn in the euro area or the EU as a whole – had been fulfilled. The activated general escape clause allowed Germany and the other EU Member States to depart from the budgetary requirements that would normally apply under the European fiscal framework to tackle the economic consequences of the COVID-19 pandemic. The general escape clause continued to apply in 2023, against the backdrop of the economic consequences of Russia's invasion of Ukraine but was deactivated at the end of 2023 in line with the fiscal policy guidance for 2024 published by the European Commission on March 8, 2023.

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*Sources: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 4. Vierteljahr 2025 (February 2026), Table 1.10; EUR-lex, Consolidated Version of the Treaty on the Functioning of the European Union (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02016E/TXT-20200301&from=EN); Deutsche Bundesbank, General government debt as defined in the Maastricht Treaty as a % of GDP - Germany – overall (https://www.bundesbank.de/dynamic/action/en/statistics/time-series-databases/time-series-databases/745582/745582?tsId=BBGFS1.A.BJ9959&listId=www_v27_web011_21a&dateSelect=2023); European Council, Council of the European Union, Statement of EU ministers of finance on the Stability and Growth Pact in light of the COVID-19 crisis, press release of March 23, 2020 (https://www.consilium.europa.eu/en/press/press-releases/2020/03/23/statement-of-eu-ministers-of-finance-on-the-stability-and-growth-pact-in-light-of-the-covid-19-crisis/); European Commission, Fiscal policy guidance for 2024: Promoting debt sustainability and sustainable and inclusive growth, press release of March 8, 2023 (https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1410); Deutsche Bundesbank, German general government debt up in 2025 by €144 billion to €2.8 trillion; debt ratio up from 62.2% to 63%, press release of March 31, 2026 (https://www.bundesbank.de/en/press/press-releases/deutsche-staatsschulden-992720).* 

On March 19, 2025 the European Commission published a White Paper for European Defense and the ReArm Europe Plan/Readiness 2030, a package designed to increase Europe's own defense capabilities rapidly and substantially against the backdrop of the changed security situation in Europe. Among other things, the European Commission invites EU Member States to activate the national escape clause of the SGP with respect to additional defense expenditure of up to 1.5% of GDP each year for a period of four years. The activation of the national escape clause allows Germany and the other EU Member States to increase their defense expenditure accordingly without triggering an EDP. On April 30, 2025 the European Commission confirmed that Germany is among the EU Member States that have submitted a request to activate the national escape clause (NEC). The NEC was finally activated on October 10, 2025 by the Council of the EU. For further information, see also "General—The European Union and European Integration—EU Economic Governance—Stability and Growth Pact."

*Source: European Commission, Commission unveils the White Paper for European Defence and the ReArm Europe Plan/Readiness 2030, press release of March 19, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_793); European Commission, 12 Member States request activation of the national escape clause in a coordinated move to boost defense spending, press release of April 30, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1121); Council of the EU, Economic governance: Council approves Germany's fiscal expenditure path and its flexibility to increase defence spending, press release of October 10, 2025 (https://www.consilium.europa.eu/en/press/press-releases/2025/10/10/economic-governance-council-approves-germany-s-fiscal-expenditure-path-and-its-flexibility-to-increase-defence-spending/)* 

The following table shows historical information on the Federal Republic's general government deficit/surplus and debt as a percentage of GDP.

THE FEDERAL REPUBLIC'S FISCAL MAASTRICHT CRITERIA

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 |
|  | (% of GDP) | (% of GDP) | (% of GDP) | (% of GDP) | (% of GDP) |
|  General government deficit (-) / surplus (+) | -2.7 | -2.7 | -2.5 | -1.9 | -3.2 |
|  General government gross debt | 63.5 | 62.2 | 62.3 | 64.4 | 67.9 |

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*Sources: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 – 4. Vierteljahr 2025 (February 2026), Table 1.10; Deutsche Bundesbank, Time series BBK01.BJ9959: General government debt as defined in the Maastricht Treaty as a % of GDP - Germany - overall (https://www.bundesbank.de/dynamic/action/en/statistics/time-series-databases/time-series-databases/745582/745582?tsId=BBGFS1.A.BJ9959&listId=www_v27_web011_21a&dateSelect=2023).* 

**Germany's constitutional budget rule** 

As regards national fiscal rules, the German constitutional budget rule known as the "debt brake" (*Schuldenbremse*) provides for a structural budget deficit of no more than 0.35% of GDP at the federal level and – prior to the reform in March 2025 – structurally balanced Länder budgets. The Bundestag suspended the debt brake for the years 2020, 2021, 2022 and 2023 in order to enable the financing of governmental measures taken in connection with the COVID-19 pandemic and Russia's invasion of Ukraine. For the federal budget for 2024, however, the regular debt ceiling of the debt brake applied again. In response to Russia's invasion of Ukraine, the Federal Government established a Special Fund for the Federal Armed Forces (*Sondervermögen Bundeswehr*) with its own credit authorization of up to EUR 100 billion on a one-off basis in 2022. This one-off credit authorization is exempted from the debt brake. The Special Fund has been used to supplement the defense section of the Federal Budget to achieve the guideline of the NATO of spending at least 2% of GDP each year on defense.

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*Sources: Bundesministerium der Finanzen, Fiskalregeln (https://www.bundesfinanzministerium.de/Web/DE/Themen/Oeffentliche_Finanzen/Stabilitaetspolitik/Fiskalregeln/fiskalregeln.html); Bundesministerium der Finanzen, Kompendium zur Schuldenregel des Bundes (Schuldenbremse), February 25, 2022 (https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Oeffentliche_Finanzen/Schuldenbremse/kompendium-zur-schuldenbremse-des-bundes.pdf?__blob=publicationFile&v=1); Bundesministerium der Finanzen, BMF-Monatsbericht September 2021, Abrechnung der grundgesetzlichen Regel zur Begrenzung der Neuverschuldung 2020 (https://www.bundesfinanzministerium.de/Monatsberichte/2021/09/Downloads/monatsbericht-2021-09-deutsch.pdf?__<br>blob=publicationFile&v=1);Bundesministerium der Finanzen, BMF-Monatsbericht September 2022, Abrechnung der grundgesetzlichen Regel zur Begrenzung der Neuverschuldung (Schuldenbremse) 2021 (https://www.bundesfinanzministerium.de/Monatsberichte/2022/09/Downloads/monatsbericht-2022-09-deutsch.pdf?__blob=publicationFile&v=1);Bundesministerium der Finanzen, BMF-Monatsbericht September 2023, Abrechnung der grundgesetzlichen Regel zur Begrenzung der Neuverschuldung (Schuldenbremse) 2022 (https://www.bundesfinanzministerium.de/Monatsberichte/2023/09/Downloads/monatsbericht-2023-09-deutsch.pdf?__blob=publicationFile&v=1); Bundesministerium der Finanzen, BMF-Monatsbericht September 2024, Abrechnung der Schuldenbremse 2023 (https://www.bundesfinanzministerium.de/Monatsberichte/Ausgabe/2024/09/Inhalte/Kapitel-3-Analysen/3-2-abrechnung-der-schuldenbremse-2023.html); Bundesministerium der Finanzen, BMF-Monatsbericht Februar 2024, Sollbericht 2024: Ausgaben und Einnahmen des Bundeshaushalts (https://www.bundesfinanzministerium.de/Monatsberichte/Ausgabe/2024/02/Inhalte/Kapitel-3-Analysen/3-1-sollbericht-2024.html); Bundesministerium der Finanzen, Sondervermögen Bundeswehr: Investitionen in unsere Freiheit, press release of March 16, 2022 (https://www.bundesfinanzministerium.de/Content/DE/Pressemitteilungen/Finanzpolitik/2022/03/2022-03-16-sondervermoegen-bundeswehr.html? cms_pk_kwd=16.03.2022_Sonderverm%C3%B6gen+Bundeswehr+Investitionen+in+unsere+Freiheit&cms_pk_campaign=Newsletter-16.03.2022); Deutscher Bundestag, Dokumente, Textarchiv, 2022, Grundgesetzänderung für das Sondervermögen beschlossen (https://www.bundestag.de/dokumente/textarchiv/2022/kw22-de-grundgesetzaenderung-897760); Bundesrat, Bundesrat kompakt – Das Wichtigste zur Sitzung, Ausgewählte Tagesordnungspunkte der 1022. Sitzung am 10.06.2022, Bundeswehrsondervermögen – Mindestlohn – Rente – Pflegebonus, TOP 24A Bundeswehr (https://www.bundesrat.de/DE/plenum/bundesrat-kompakt/22/1022/1022-node.html).* 

In view of the changed security situation in Europe and the corresponding need for significantly higher defense expenditure, Germany decided to reform the debt brake. The reform exempts defense-related expenditure (including civil protection, intelligence services, cyber security and support for countries which are attacked in violation of international law) which in total exceeds 1% of GDP from the debt ceiling of the debt brake; allows the Länder to run structural budget deficits of 0.35% of GDP, in line with the debt rules that apply to the Federal Government (instead of the previously-required structurally balanced budgets of the Länder); and establishes the Special Fund for Infrastructure and Climate Neutrality (*Sondervermögen für Infrastruktur und Klimaneutralität*; the "Special Fund")). To finance additional infrastructure investments by the Federal Government and the Länder in key areas such as energy and transport infrastructure and education over 12 years, the Special Fund has its own one-off credit authorization of up to EUR 500 billion, which is exempt from the limits of the debt brake. The resources from the Special Fund can be drawn down only if they are used in addition to the investments in the federal budget. To ensure this, the investment ratio in the federal budget must not fall below an appropriate level. An amount of EUR 100 billion from the Special Fund will be allocated to the Climate and Transformation Fund (KTF), with a further EUR 100 billion being made available to the Länder. The reform of the debt brake was approved by the Bundestag on March 18, 2025 and by the Bundesrat on March 24, 2025, in each case with the majority of at least two thirds, the majority necessary to amend the Grundgesetz. Following publication in the Federal Law Gazette (*Bundesgesetzblatt*), the reform came into force on March 25, 2025.

*Sources: Deutscher Bundestag, 20. Wahlperiode, Gesetzentwurf der Fraktionen der SPD und CDU/CSU, Entwurf eines Gesetzes zur Änderung des Grundgesetzes, Drucksache 20/15096, 10.03.2025 (https://dserver.bundestag.de/btd/20/150/2015096.pdf); Deutscher Bundestag, 20. Wahlperiode, Beschlussempfehlung und Bericht des Haushaltsausschusses (8.Ausschuss) a) zu dem Gesetzentwurf der Fraktionen der SPD und CDU/CSU – Drucksache 20/15096 – Entwurf eines Gesetzes zur Änderung des Grundgesetzes (Artikel 109, 115 und 143h) b) zu dem Gesetzentwurf der Fraktion BÜNDNIS 90/DIE GRÜNEN – Drucksache 20/15098 – Entwurf eines Gesetzes zur Änderung des Grundgesetzes (Artikel 109 und 115) c) zu dem Gesetzentwurf der Fraktion der FDP – Drucksache 20/15099 – Entwurf eines Gesetzes zur Errichtung eines Verteidigungsfonds für Deutschland und zur Änderung des Grundgesetzes (Artikel 87a), Drucksache 20/15117, 16.03.2025 (https://dserver.bundestag.de/btd/20/151/2015117.pdf); Deutscher Bundestag, Haushalt, Mehrheit für Reform der Schuldenbremse: 512 Abgeordnete stimmen mit Ja (https://www.bundestag.de/dokumente/textarchiv/2025/kw12-de-sondersitzung-1056916); Bundesrat, Bundesrat KOMPAKT Das Wichtigste zur Sitzung, Ausgewählte Tagesordnungspunkte der 1052. Sitzung am 21.03.2025, Bundesrat macht Weg frei für Sondervermögen und Lockerung der Schuldenbremse (https://www.bundesrat.de/DE/plenum/bundesrat-kompakt/25/1052/1052-pk.html); Bundesgesetzblatt, Gesetz zur Änderung des Grundgesetzes (Artikel 109, 115 und 143h), BGBl. 2025 / Nr. 94 vom 24.03.2025 (https://www.recht.bund.de/bgbl/1/2025/94/VO.html); Bundesministerium der Finanzen, Das Sondervermögen für Infrastruktur und Klimaneutralität<br> (https://www.bundesfinanzministerium.de/Web/DE/Themen/Oeffentliche_Finanzen/SVIK/sondervermoegen-infrastruktur-klimaneutralitaet.html).* 

**Fiscal Outlook** 

Based on the reformed rules of the SGP, which came into force in 2024, the EU Member States must present a general government net expenditure path for the coming years in so-called medium-term fiscal-structural plans ("MTPs"). These MTPs are assessed by the European Commission. Once the MTPs have been adopted by the Council, the net expenditure path is considered a binding fiscal commitment, which is used to monitor compliance with the fiscal requirements of the reformed SGP. On July 16, 2025, the federal cabinet adopted the German medium-term fiscal-structural plan for the years from 2025 to 2029. This is Germany's first medium-term fiscal-structural plan. It includes a fiscal commitment for the years from 2025 to 2029 that is expressed in terms of a net expenditure path, that is, maximum permissible growth rates for net nationally financed primary expenditure. On October 10, 2025, the Council of the EU approved Germany's fiscal expenditure path.

*Source: Federal Ministry of Finance, German Medium-Term Fiscal-Structural Plan<br> (https://www.bundesfinanzministerium.de/Content/EN/Standardartikel/Press_Room/Publications/Brochures/medium-term-fiscal-structural-plan.html), Council of the EU, Economic governance: Council approves Germany's fiscal expenditure path and its flexibility to increase defense spending, press release of October 10, 2025 (https://www.consilium.europa.eu/en/press/press-releases/2025/10/10/economic-governance-council-approves-germany-s-fiscal-expenditure-path-and-its-flexibility-to-<br>increase-defence-spending/).* 

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The following table presents the European Commission's projection for key fiscal indicators in the years 2026 and 2027, as set out in the European Commission's Autumn Forecast 2024, compared to the results for these key fiscal indicators in the years 2023 to 2025. The Autumn Forecast was published in November 2025.

GENERAL GOVERNMENT BUDGETARY PROSPECTS (1)

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2027 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2026 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 |
|  | (% of GDP) | (% of GDP) | (% of GDP) | (% of GDP) | (% of GDP) |
|  Revenue | 47.7 | 47.4 | 47.9 | 46.8 | 45.7 |
|  Expenditure | 51.5 | 51.4 | 50.5 | 49.4 | 48.1 |
|  **General government deficit (-) / surplus (+)** | **-3.8** | **-4.0** | **-2.7** | **-2.7** | **-2.5** |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expenditure | 1.2 | 1.2 | 1.1 | 1.1 | 0.9 |
| &nbsp;&nbsp;&nbsp;&nbsp; Primary balance (2) | -2.6 | -2.8 | -1.6 | -1.6 | -1.6 |
|  **General government gross debt** | **67.0** | **65.2** | **63.5** | **62.2** | **62.3** |

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(1) Figures may not add up due to rounding.

(2) General government deficit (-) / surplus (+) excluding interest expenditure.

*Source: European Commission, European Economic Forecast, Autumn 2025 (https://economy-finance.ec.europa.eu/mwg-internal/de5fs23hu73ds/progress?id=2gLThP61PTnuhCIO6FsSOSHUbocHPzjX2aqXS9ioDH8,&dl), Tables 32-36 and 40; Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2024 (March 2025), Tables 2.1.12; Deutsche Bundesbank, Time series BBGFS1.A.BK9190; BBGFS1.A.BK9182; BBK01.BJ9959 (https://www.bundesbank.de/dynamic/action/en/statistics/time-series-databases/time-series-databases/743796/743796?openNodeId=1749498&treeAnchor=FINANZEN).* 

**Tax Structure** 

***Income Tax***

Significant sources of revenue for the general government are the various types of income taxes. Income taxation for employees and self-employed persons is based on a progressive tax scale with marginal tax rates ranging from 14% to 45% subject to the amount of taxable income. Employees pay taxes on their income from employment in the form of wage taxes. Self-employed persons typically pay estimated taxes during the year before filing their annual income tax return. Income generated by partnerships (*Personengesellschaften*) is not subject to tax at the partnership level, but at the level of the partners. The partners pay tax on this income according to their individual income tax brackets.

Income generated by corporations is subject to corporate income tax (*Körperschaftsteuer*) at a flat rate of 15%.

Capital income received by domestic taxpayers (all types of income from capital as well as private shareholders' net gains from sales of shares in corporations) is subject to a final uniform tax rate of 25% (*Abgeltungsteuer*), taking into consideration an allowance (*Sparerpauschbetrag*) of EUR 1,000 (EUR 2,000 for married couples).

In addition to the various types of income tax, a solidarity surcharge of 5.5% is imposed on the applicable income tax liability. From January 1, 2021, onwards, the additional tax burden resulting from the solidarity surcharge has been abolished for approximately 90% of income taxpayers for the benefit of low and middle incomes.

*Sources: Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Einkommensteuergesetz (https://www.gesetze-im-internet.de/estg/index.html); Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Körperschaftsteuergesetz (https://www.gesetze-im-internet.de/kstg_1977/index.html); Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Solidaritätszuschlaggesetz 1995, § 4 Zuschlagssatz (https://www.gesetze-im-internet.de/solzg_1995/__4.html); Bundesministerium der Finanzen, Monatsbericht Januar 2024, Analysen und Berichte, Die wichtigsten steuerlichen Änderungen 2024 (https://www.bundesfinanzministerium.de/Monatsberichte/Ausgabe/2024/01/Inhalte/Kapitel-3-Analysen/3-1-wichtigste-steuerliche-aenderungen-2024.html).* 

***VAT and Consumption Taxes***

VAT serves as a significant source of revenue. VAT is a general consumption tax that is imposed on the value of most goods and services. The standard rate applicable to most goods and services is 19%. Certain items that are classified as necessities, such as food (except food and beverages in restaurants) and books, are subject to a reduced rate of 7%.

Against the backdrop of Russia's invasion of Ukraine and rising energy prices, the VAT rate for the supply of gas via the natural gas grid and district heating was temporarily reduced from 19% to 7% from October 1, 2022 until March 31, 2024. Similarly, initially in connection with the COVID-19 pandemic, the VAT rate for restaurant and catering services was temporarily reduced from 19% to 7% from July 1, 2020 until December 31, 2023. The reduced VAT rate for restaurant and catering services, but excluding beverages, was re-introduced on January 1, 2026.

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In addition to the VAT, there are specific consumption taxes. The most significant specific consumption taxes relate to energy and tobacco.

*Sources: Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Umsatzsteuergesetz (https://www.gesetze-im-internet.de/ustg_1980/index.html); Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Umsatzsteuergesetz, § 12 Steuersätze (https://www.gesetze-im-internet.de/ustg_1980/__12.html); Die Bundesregierung, Im Bundesrat beschlossen – Umsatzsteuer auf Gas wird reduziert, published on October 26, 2022 (https://www.bundesregierung.de/breg-de/aktuelles/steuersenkung-gas-2125486); Bundesministerium der Justiz, Energiesteuergesetz (https://www.gesetze-im-internet.de/energiestg/); Bundesministerium der Justiz, Tabaksteuergesetz (https://www.gesetze-im-internet.de/tabstg_2009/index.html); Bundesministerium der Finanzen, Die wichtigsten steuerlichen Änderungen 2026 (https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/das-aendert-sich-2026.html).* 

***Energy Taxation and Emissions Trading***

In addition to its primary purpose of revenue generation, the energy tax regime also aims to encourage energy conservation and to mitigate climate change by providing incentives for a reduction of carbon emissions. Furthermore, it aims to allocate the burden of taxes and contributions more equally among labor, capital and natural resources. Key points of this tax regime are an electricity tax and a energy tax on motor fuels and heating fuels. The electricity tax rate is EUR 20.50 per megawatt-hour. The energy tax rates vary depending on the specific energy product, e.g., 654.50 EUR/1000 l for petrol containing sulfur at a maximum of 10 mg/kg and 470.40 EUR/1000 l for diesel fuel containing sulfur at a maximum of 10 mg/kg.

In addition to the EU's Emissions Trading System (ETS) for carbon emissions applied to the manufacturing and energy industries, Germany has introduced a national ETS for carbon emissions of the transportation and buildings sector from 2021 onwards, starting with a price on carbon emissions initially set at EUR 25 per ton in 2021, EUR 30 per ton in 2022 and rising incrementally thereafter. However, following Russia's invasion of Ukraine and its impact on energy prices for households and companies, the projected price increase on carbon emissions was temporarily adjusted to EUR 30 per ton in 2023 for one year (EUR 5 less per ton than previously planned) but then returned to the originally planned price path from 2024 onwards. In 2026, allowances will be auctioned within a price range of EUR 55 (minimum) to EUR 65 (maximum) per ton of carbon emissions. From 2028 on, the price of CO<sub>2</sub> will be determined by market forces in the emissions certificates market under the European emissions trading system. with certificates being auctioned off to fuel sellers.

*Sources: Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Stromsteuergesetz (https://www.gesetze-im-internet.de/stromstg/index.html); Bundesministerium der Justiz, Stromsteuergesetz, § 3 Steuertarif (https://www.gesetze-im-internet.de/stromstg/__3.html); Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Energiesteuergesetz (https://www.gesetze-im-internet.de/energiestg/), Bundesministerium der Justiz und für Verbraucherschutz, Bundesamt für Justiz, Energiesteuergesetz, § 2 Steuertarif (https://www.gesetze-im-internet.de/energiestg/__2.html), The Federal Government, Effectively reducing CO2 emissions (https://www.bundesregierung.de/breg-en/issues/climate-action/effectively-reducing-co2-1795850); Federal Ministry for Economic Affairs and Climate Action, Robert Habeck: "We are taking a more cautious approach to carbon pricing, reducing the burden on households and companies" – 2023 increase in carbon price postponed, press release of October 28, 2022 (https://www.bmwk.de/Redaktion/EN/Pressemitteilungen/2022/10/20221028-robert-habeck-we-are-taking-a-more-cautious-approach-to-carbon-pricing-reducing-the-burden-on-households-and-companies.html); Die Bundesregierung, Der Klima und Transformationsfonds 2024 – Entlastung schaffen, Zukunftsinvestitionen sichern, Transformation gestalten, December 22, 2023 (https://www.bundesregierung.de/breg-de/aktuelles/der-klima-und-transformationsfonds-2024-2250738), Bundesministerium für Wirtschaft und Energie, Energie, Der CO2 Preis: Wichtiger Beitrag zum Klimaschutz (https://www.energiewechsel.de/KAENEF/Redaktion/DE/Dossier/co2-preis.html); European Commission, ETS2 Buildings, road transport and additional sectors (https://climate.ec.europa.eu/eu-action/carbon-markets/ets2-buildings-road-transport-and-additional-sectors_en#:~:text=The%20ETS2%20will%<br>20become%20fully,monitor%20and%20report%20their%20emissions).* 

***Trade Tax***

Trade tax (*Gewerbesteuer*) is levied at the municipal level and is imposed on businesses and their objective earning power. The trade tax rate varies and depends on the municipality that levies the tax. Basis of assessment are the profits of a business enterprise as determined under income tax law or corporation tax law, increased or decreased by certain adjustments. The result is multiplied by the basic federal rate (*Gewerbesteuermesszahl*) to achieve the base amount for the trade tax (*Steuermessbetrag*), which is then multiplied by the municipal multiplier (*Hebesatz*). Beyond a required minimum level of 200% for the municipal multiplier, municipalities have discretion to fix the municipal tax collection rate. Based on a weighted average municipal multiplier of 406.67% in 2023 the average trade tax rate in 2023 amounted to 14.23%.

*Sources: Bundesministerium der Justiz und für Verbraucherschutz, Gewerbesteuergesetz<br> (https://www.gesetze-im-internet.de/gewstg/index.html); Bundesministerium der Finanzen, Die wichtigsten Steuern im internationalen Vergleich 2024, Ausgabe 2025, Übersicht 4, page 14 (https://www.bundesfinanzministerium.de/Content/DE/Downloads/Broschueren_Bestellservice/steuern-im-internationalen-vergleich-2024.pdf?__blob=publicationFile&v=8).* 

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The following table provides an overview of the annual tax revenues of the general government divided by categories for each of the years indicated, as presented in the national accounts.

TAXES (1)

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 |  |
|  | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) | (EUR in billions) |  |
|  Current taxes |  | 1031.5 |  | 996.6 |  | 962.0 |  | 965.4 |  | 896.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Taxes on production and imports |  | 460.1 |  | 443.8 |  | 428.7 |  | 434.3 |  | 410.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which: VAT* | | *310.6* | | *298.8* | | *291.5* | | *292.2* | | *260.3* | |
| &nbsp;&nbsp;&nbsp;&nbsp; Current taxes on income and wealth |  | 571.4 |  | 552.8 |  | 533.3 |  | 531.1 |  | 486.1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which: Wage tax* | | *302.6* | | *287.3* | | *274.7* | | *273.9* | | *257.1* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Assessed income tax* | | *75.1* | | *71.5* | | *70.2* | | *79.2* | | *68.4* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Non-assessed taxes on earnings* | | *58.5* | | *58.1* | | *49.1* | | *41.2* | | *39.4* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Corporate tax* | | *42.9* | | *44.6* | | *48.5* | | *49.8* | | *44.3* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Trade tax (Gewerbesteuer)* | | *76.2* | | *75.3* | | *75.0* | | *71.0* | | *61.1* | |
|  Capital taxes |  | 15.4 |  | 10.0 |  | 9.3 |  | 9.2 |  | 9.8 |  |
|  **Tax revenue of general government** |  | **1047.0** |  | **1006.6** |  | **971.3** |  | **974.6** |  | **906.5** |  |
|  Taxes of domestic sectors to EU |  | 5.9 |  | 5.6 |  | 5.6 |  | 6.7 |  | 5.3 |  |
|  **Taxes** |  | **1052.9** |  | **1012.2** |  | **977.0** |  | **981.3** |  | **911.8** |  |

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(1) Definition according to the national accounts.

*Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 - 2025 (March 2026), Table 3.4.3.16.* 

**Government Participations** 

The Federal Republic and its various special funds held direct participations in 117 public and private enterprises as of December 31, 2024.

The following table shows information on the Federal Republic's significant direct and indirect majority and minority participations (including those held through special funds) as of December 31, 2024.

PARTICIPATIONS OF THE FEDERAL REPUBLIC

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| | | |
|:---|:---|:---|
| Enterprises | Total nominal capital<br>of enterprise | Participation of the<br>Federal Republic |
|  | (EUR in millions) | (%) |
|  Significant majority participations: |  |  |
|  Deutsche Bahn AG | 2150 | 100.0 |
|  KfW Kreditanstalt für Wiederaufbau | 3750 | 80.0 |
|  Hypo Real Estate Holding GmbH (1) | 112 | 100.0 |
|  Uniper SE (2) | 416 | 99.1 |
|  SEFE Securing Energy for Europe GmbH (3) | 226 | 100.0 |
|  Significant minority participations exceeding 25%: |  |  |
|  Deutsche Telekom AG | 12765 | 27.8 |
|  Flughafen München GmbH | 307 | 26.0 |

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(1) Participations held by a special fund.

(2) Held indirectly through UBG Uniper Beteiligungsholding GmbH.

(3) Held indirectly through SEEHG Securing Energy for Europe Holding GmbH.

*Source: Bundesministerium der Finanzen, Beteiligungsbericht des Bundes 2024 (https://www.bundesfinanzministerium.de/Content/DE/Downloads/Broschueren_Bestellservice/beteiligungsbericht-des-bundes-2024.pdf?__blob=publicationFile&v=4).* 

------

In December 2022, following approval by the European Commission under EU state aid rules, the Federal Government acquired 99.1% of the share capital of energy company Uniper SE ("Uniper") with the aim of securing the energy supply in Germany. Unless otherwise approved by the European Commission, the Federal Government is obliged to reduce its stake in Uniper to a maximum of 25% plus one share by 2028 at the latest. Uniper provides critical energy infrastructure in Germany and plays a key role in the supply of electricity and natural gas. As a result of Russia's invasion of Ukraine and the subsequent halt in the supply of Russian natural gas to Germany, Uniper faced existential difficulties. Due to Uniper's central role for the energy supply in Germany, the Federal Government decided on initial support measures in July 2022, which were adapted based on further developments in September 2022. In this context, Uniper had already received substantial support from KfW in the form of credit lines. Funds provided by KfW were since substituted by equity and repaid in part. Another company that was transferred to state ownership as a measure to safeguard energy security in Germany is SEFE. The European Commission confirmed these capital measures under state aid rules in December 2022. Specifically, the European Commission authorized the Federal Government to inject EUR 6.3 billion of additional equity into the company by substituting an existing KfW loan subject to certain competition-related conditions.

*Sources: Bundesministerium der Finanzen, Bundesministerium für Wirtschaft und Klimaschutz, Einstieg des Bundes bei Energieversorger Uniper SE vollzogen, joint press release of December 22, 2022 (https://www.bundesfinanzministerium.de/Content/DE/Pressemitteilungen/Finanzpolitik/2022/12/2022-12-22-einstieg-bund-bei-uniper-vollzogen.html); Federal Ministry for Economic Affairs and Climate Action, European Commission approves equity capital for reorientation of SEFE, press release of December 20, 2022 (https://www.bmwk.de/Redaktion/EN/Pressemitteilungen/2022/12/20221220-european-commission-approves-equity-capital-for-reorientation-of-sefe.html).* 

**Direct Debt of the Federal Government** 

As of December 31, 2024, the principal amount of the Federal Government's direct debt totaled EUR 1,828.6 billion . For further information on the principal amount of the outstanding direct debt, see "Tables and Supplementary Information—I. Direct Debt of the Federal Government— Summary of the Principal Amount of the Outstanding Direct Debt of the Federal Government."

The Federal Government raises funds primarily through the issuance of bonds and notes. Euro-denominated bonds and notes issued by the Federal Republic are evidenced by book entry and no certificates are issued.

In addition to its own direct debt obligations, the Federal Government and its special funds had outstanding guarantees in an aggregate amount of EUR 621.5 billion as of December 31, 2024. Of this amount, EUR 111.0 billion were outstanding in the form of export credit insurance, which is handled by HERMES on behalf of and for the account of the Federal Government. Furthermore, EUR 22.4 billion of the aggregate amount were outstanding in the form of a guarantee for a loan to Greece according to the German Financial Stability Act, and EUR 86.8 billion of the aggregate amount were outstanding in the form of a guarantee for the European Stability Mechanism.

*Source: Bundesministerium der Finanzen, Finanzbericht 2026, Übersicht 8.1.3, pages 295-296. (https://www.bundesfinanzministerium.de/Content/DE/Downloads/Broschueren_Bestellservice/finanzbericht-2026.html).* 

For more detailed information regarding the Federal Government's debt and guarantees, see "—Tables and Supplementary Information."

For information on the Federal Government's liability as of December 31, 2025 for capital subscriptions to various international financial organizations, see the table "—Tables and Supplementary Information—III. Liabilities to International Financial Organizations."

------

**TABLES AND SUPPLEMENTARY INFORMATION** 

I. DIRECT DEBT OF THE FEDERAL GOVERNMENT

SUMMARY OF THE PRINCIPAL AMOUNT OF THE OUTSTANDING

DIRECT DEBT OF THE FEDERAL GOVERNMENT

---

| | |
|:---|:---|
|  | Aggregate<br>principal amount<br>outstanding as of<br>December 31, 2025 |
|  | (EUR in millions) |
|  Federal Bonds *(Bundesanleihen)* | 1311500 |
|  Federal Notes *(Bundesobligationen)* | 270500 |
|  Federal Treasury Notes *(Bundesschatzanweisungen)* | 146500 |
|  Treasury Discount Paper *(Unverzinsliche Schatzanweisungen)* | 96000 |
|  Inflation-linked Securities *(Inflationsindexierte Bundeswertpapiere)* | 66250 |
|  Green Federal Bonds *(Grüne Bundesanleihen)* | 63000 |
|  Green Five-year Federal Notes *(Grüne Bundesobligationen)* | 16250 |
|  Borrowers' note loans *(Schuldscheindarlehen)* | 3895 |
|  Old debt (1) | 3584 |
|  Repurchased debt | -196609 |
|  **Total** | **1780870** |

---

(1) Mainly equalization and covering claims of the Deutsche Bundesbank, other banks and insurance companies in
connection with the currency reform of 1948.

*Source: Monthly Report of the Federal Ministry of Finance, January 2026, Table "Entwicklung der Kreditaufnahme des Bundes ohne Darlehensfinanzierung im Dezember 2025", page 62, and table "Entwicklung von Umlaufvolumen und Eigenbestände an Bundeswertpapieren im Dezember 2025", page 64* 

*(https://www.bundesfinanzministerium.de/Content/DE/Downloads/Broschueren_Bestellservice/Monatsberichte/2026/monatsbericht-2026-01.html).* 

------

DEBT TABLES

1. FEDERAL BONDS (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  6.5% Bonds of the Federal Republic of 1997 | 6.50 | 1997 | 2027 | 13750 |
|  5.625% Bonds of the Federal Republic of 1998 | 5.625 | 1998 | 2028 | 17000 |
|  4.75% Bonds of the Federal Republic of 1998 | 4.75 | 1998 | 2028 | 13750 |
|  6.25% Bonds of the Federal Republic of 2000 | 6.25 | 2000 | 2030 | 11750 |
|  5.5% Bonds of the Federal Republic of 2000 | 5.50 | 2000 | 2031 | 21500 |
|  4.75% Bonds of the Federal Republic of 2003 | 4.75 | 2003 | 2034 | 24500 |
|  4% Bonds of the Federal Republic of 2005 | 4.00 | 2005 | 2037 | 28250 |
|  4.25% Bonds of the Federal Republic of 2007 | 4.25 | 2007 | 2039 | 19250 |
|  4.75% Bonds of the Federal Republic of 2008 | 4.75 | 2008 | 2040 | 23000 |
|  3.25% Bonds of the Federal Republic of 2010 | 3.25 | 2010 | 2042 | 22000 |
|  2.5% Bonds of the Federal Republic of 2012 | 2.50 | 2012 | 2044 | 34500 |
|  2.5% Bonds of the Federal Republic of 2014 | 2.50 | 2014 | 2046 | 36250 |
|  0.5% Bonds of the Federal Republic of 2016 | 0.50 | 2016 | 2026 | 33500 |
|  0% Bonds of the Federal Republic of 2016 | 0.00 | 2016 | 2026 | 32500 |
|  0.25% Bonds of the Federal Republic of 2017 | 0.25 | 2017 | 2027 | 30500 |
|  0.5% Bonds of the Federal Republic of 2017 | 0.50 | 2017 | 2027 | 32500 |
|  1.25% Bonds of the Federal Republic of 2017 | 1.25 | 2017 | 2048 | 41000 |
|  0.5% Bonds of the Federal Republic of 2018 | 0.50 | 2018 | 2028 | 28500 |
|  0.25% Bonds of the Federal Republic of 2018 | 0.25 | 2018 | 2028 | 28500 |
|  0.25% Bonds of the Federal Republic of 2019 | 0.25 | 2019 | 2029 | 29500 |
|  0.00% Bonds of the Federal Republic of 2019 | 0.00 | 2019 | 2029 | 29500 |
|  0.00% Bonds of the Federal Republic of 2019 | 0.00 | 2019 | 2050 | 45500 |
|  0.00% Bonds of the Federal Republic of 2020 | 0.00 | 2020 | 2030 | 28000 |
|  0.00% Bonds of the Federal Republic of 2020 | 0.00 | 2020 | 2035 | 23750 |
|  0.00% Bonds of the Federal Republic of 2020 | 0.00 | 2020 | 2027 | 22000 |
|  0.00% Bonds of the Federal Republic of 2020 | 0.00 | 2020 | 2030 | 33500 |
|  0.00% Bonds of the Federal Republic of 2021 | 0.00 | 2021 | 2028 | 27000 |
|  0.00% Bonds of the Federal Republic of 2021 | 0.00 | 2021 | 2031 | 28000 |
|  0.00% Bonds of the Federal Republic of 2021 | 0.00 | 2021 | 2031 | 32000 |
|  0.00% Bonds of the Federal Republic of 2021 | 0.00 | 2021 | 2036 | 27250 |
|  0.00% Bonds of the Federal Republic of 2021 | 0.00 | 2021 | 2052 | 34500 |
|  0.00% Bonds of the Federal Republic of 2022 | 0.00 | 2022 | 2032 | 31000 |
|  1.70% Bonds of the Federal Republic of 2022 | 1.70 | 2022 | 2032 | 28000 |
|  1.00% Bonds of the Federal Republic of 2022 | 1.00 | 2022 | 2038 | 31250 |
|  2.10% Bonds of the Federal Republic of 2022 | 2.10 | 2022 | 2029 | 26000 |
|  1.80% Bonds of the Federal Republic of 2022 | 1.80 | 2022 | 2053 | 33500 |
|  2.30% Bonds of the Federal Republic of 2023 | 2.30 | 2023 | 2033 | 38250 |
|  2.60% Bonds of the Federal Republic of 2023 | 2.60 | 2023 | 2033 | 30500 |
|  2.40% Bonds of the Federal Republic of 2023 | 2.40 | 2023 | 2030 | 28000 |
|  2.20% Bonds of the Federal Republic of 2024 | 2.20 | 2024 | 2034 | 35000 |
|  2.50% Bonds of the Federal Republic of 2024 | 2.50 | 2024 | 2054 | 26500 |
|  2.60% Bonds of the Federal Republic of 2024 | 2.60 | 2024 | 2041 | 18000 |
|  2.60% Bonds of the Federal Republic of 2024 | 2.60 | 2024 | 2034 | 35000 |
|  2.50% Bonds of the Federal Republic of 2025 | 2.50 | 2025 | 2035 | 35000 |
|  2.50% Bonds of the Federal Republic of 2025 | 2.50 | 2025 | 2032 | 11000 |
|  2.60% Bonds of the Federal Republic of 2025 | 2.60 | 2025 | 2035 | 33500 |
|  2.90% Bonds of the Federal Republic of 2025 | 2.90 | 2025 | 2056 | 18000 |
|  **Total Federal Bonds** |  |  |  | **1311500** |

---

(1) Federal Bonds (*Bundesanleihen*) are evidenced by book entry, and no certificates are issued. Maturities
are 7 to 30 years. No redemption prior to maturity; including principal strips.

------

2. GREEN FEDERAL BONDS (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  0.00% Green Bonds of the Federal Republic of 2020 | 0.00 | 2020 | 2030 | 11000 |
|  0.00% Green Bonds of the Federal Republic of 2021 | 0.00 | 2021 | 2031 | 9500 |
|  0.00% Green Bonds of the Federal Republic of 2021 | 0.00 | 2021 | 2050 | 12750 |
|  2.30% Green Bonds of the Federal Republic of 2023 | 2.30 | 2023 | 2033 | 12000 |
|  1.80% Green Bonds of the Federal Republic of 2023 | 1.80 | 2023 | 2053 | 12000 |
|  2.50% Green Bonds of the Federal Republic of 2025 | 2.50 | 2025 | 2035 | 5750 |
|  **Total Green Federal Bonds** |  |  |  | **63000** |

---

(1) Federal Bonds (*Bundesanleihen*) are evidenced by book entry, and no certificates are issued. Maturities
are 7 to 30 years. No redemption prior to maturity; including principal strips.

3. INFLATION-LINKED SECURITIES (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  0.50% Inflation-linked Bonds of the Federal Republic of 2014 | 0.50 | 2014 | 2030 | 22150 |
|  0.10% Inflation-linked Bonds of the Federal Republic of 2015 | 0.10 | 2015 | 2026 | 19200 |
|  0.10% Inflation-linked Bonds of the Federal Republic of 2015 | 0.10 | 2015 | 2046 | 14250 |
|  0.10% Inflation-linked Bonds of the Federal Republic of 2021 | 0.10 | 2021 | 2033 | 10650 |
|  **Total Inflation-linked Securities** |  |  |  | **66250** |

---

(1) Inflation-linked Securities (*Inflationsindexierte Bundeswertpapiere*) are evidenced by book entry, and no
certificates are issued. Maturities are 5 to 30 years. No redemption prior to maturity.

4. FEDERAL NOTES (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  0.00% Bonds of 2021-Series 183 | 0.00 | 2021 | 2026 | 28000 |
|  0.00% Bonds of 2021-Series 184 | 0.00 | 2021 | 2026 | 24000 |
|  0.00% Bonds of 2022-Series 185 | 0.00 | 2022 | 2027 | 22000 |
|  1.30% Bonds of 2022-Series 186 | 1.30 | 2022 | 2027 | 30000 |
|  2.20% Bonds of 2023-Series 187 | 2.20 | 2023 | 2028 | 25000 |
|  2.40% Bonds of 2023-Series 188 | 2.40 | 2023 | 2028 | 29500 |
|  2.10% Bonds of 2024-Series 189 | 2.10 | 2024 | 2029 | 25000 |
|  2.50% Bonds of 2024-Series 190 | 2.50 | 2024 | 2029 | 24000 |
|  2.40% Bonds of 2025-Series 191 | 2.40 | 2025 | 2030 | 32000 |
|  2.20% Bonds of 2025-Series 192 | 2.20 | 2025 | 2030 | 31000 |
|  **Total Federal Notes** |  |  |  | **270500** |

---

(1) Federal Notes (*Bundesobligationen*) are evidenced by book entry, and no certificates are issued.
Maturities are approximately five years. No redemption prior to maturity.

5. GREEN FEDERAL NOTES (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  1.30% Green Bonds of 2022 | 1.30 | 2022 | 2027 | 9750 |
|  2.10% Green Bonds of 2024 | 2.10 | 2024 | 2029 | 6500 |
|  **Total Federal Notes** |  |  |  | **16250** |

---

(1) Federal Notes (*Bundesobligationen*) are evidenced by book entry, and no certificates are issued.
Maturities are approximately five years. No redemption prior to maturity.

------

6. FEDERAL TREASURY NOTES (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  2.50% Notes of 2024 | 2.50 | 2024 | 2026 | 19000 |
|  2.90% Notes of 2024 | 2.90 | 2024 | 2026 | 19000 |
|  2.70% Notes of 2024 | 2.70 | 2024 | 2026 | 19000 |
|  2,00% Notes of 2024 | 2.00 | 2024 | 2026 | 19000 |
|  2.20% Notes of 2025 | 2.20 | 2025 | 2027 | 18500 |
|  1.70% Notes of 2025 | 1.70 | 2025 | 2027 | 18000 |
|  1.90% Notes of 2025 | 1.90 | 2025 | 2027 | 19000 |
|  2.00% Notes of 2025 | 2.00 | 2025 | 2027 | 15000 |
|  **Total Federal Treasury Notes** |  |  |  | **146500** |

---

(1) Federal Treasury Notes (*Bundesschatzanweisungen*) are evidenced by book-entry, and no certificates are
issued. Maturities are two years. No redemption prior to maturity.

7. TREASURY DISCOUNT PAPER (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  Treasury Discount Paper | 1.80 to 2.40 | 2025 | 2026 | 96000 |

---

(1) Treasury Discount Papers (*Unverzinsliche Schatzanweisungen*) are issued at a discount and repaid at par
value on the maturity date. No interest payments are made during the term of the paper. The papers are auctioned and intended for institutional investors. Currently, the initial maturity is twelve months. No redemption is permitted prior to
maturity.

(2) Reflects annual interest rate paid to the holder by way of the initial issue discount. No redemption is
permitted prior to maturity.

8. BORROWERS' NOTE LOANS (1)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  Borrower's note loans (*Schuldscheindarlehen*) | 3.50 to 5.05 | 2003 to 2007 | 2026 to 2037 | 3895 |

---

(1) Borrowers' note loans (*Schuldscheindarlehen*) are an instrument of the German capital market where
the lending entity, generally an institutional investor, receives a certificate evidencing its loan to the borrower and the term of such loans. The certificate generally authorizes at least three assignments. No redemption is permitted prior to
maturity.

*Source for Debt Table 1 to 8: Federal Republic of Germany – Finance Agency, "German Government Securities and Financing Instruments"* 

*<u>(https://www.deutsche-finanzagentur.de/fileadmin/user_upload/Institutionelle-investoren/berichtswesen/einzelaufstellung_en.xlsx).</u>* 

9. OTHER LIABILITIES

---

| | | | | |
|:---|:---|:---|:---|:---|
| Title | Interest rate | Year of issue | Maturity | Aggregate<br>principal amount<br>outstanding as of<br>December 2025 |
|  | (% per annum) |  |  | (EUR in millions) |
|  Old debt (1) | 0.00 to 3.00 | Various | Various | 3584 |

---

(1) Includes mainly equalization and covering claims of the Deutsche Bundesbank, other banks and insurance companies
in connection with the currency reform of 1948 as well as liabilities of the Federal Government to repay amounts received from the *Investitionshilfeabgabe*, a special duty levied on income, the proceeds of which were to be used to promote
investments.

*Source: Bundesministerium der Finanzen, Monatsbericht Januar 2026, Table "Entwicklung der Kreditaufnahme des Bundes (Haushalt und Sondervermögen ohne Darlehensfinanzierung) im Dezember 2025", page 62 (https://www.bundesfinanzministerium.de/Monatsberichte/Ausgabe/2026/01/Inhalte/Kapitel-3-Wirtschafts-und-Finanzlage/3-4-kreditaufnahme-des-bundes.html - doc514026bodyText2).* 

------

II. GUARANTEES BY THE FEDERAL GOVERNMENT (1)

---

| | | |
|:---|:---|:---|
|  | Aggregate principal<br>amount outstanding as<br>of December, 31 | Aggregate principal<br>amount outstanding as<br>of December, 31 |
| Purpose of Guarantees | 2024 | 2023 |
|  | (EUR in millions) | (EUR in millions) |
|  Export finance loans (including rescheduled loans) (2) | 111034 | 113080 |
|  Untied loans; direct foreign investments by German companies; Loans of the European Investment Bank to non-EU borrowers | 38988 | 39757 |
|  Loans in connection to market organization and stocking measures | 0 | 0 |
|  Loans to domestic corporations and for projects of other domestic purpose | 225667 | 355654 |
|  Contributions to international financing institutions | 80603 | 75512 |
|  Co-financing of bilateral projects of German financial co-operation | 32588 | 31603 |
|  Successor agencies to *Treuhandanstalt* | 1009 | 1009 |
|  Interest compensation guarantees | 1500 | 1500 |
|  **Total guarantees pursuant to the 2020 German Budget Act** | **504890** | **631614** |
|  Guarantee for a loan to Greece according to the German Financial Stability Act | 22400 | 22400 |
|  Loan guarantees under the Act on Guarantees pertaining to the European Financial Stability Facility | 86778 | 89152 |
|  Warranties in connection with the SURE-Warranty Act as of July 10, 2020 | 6384 | 6384 |
|  Warranties in connection with the Law on Insolvency Protection through Travel Protection Funds (*Reisesicherungsfondsgesetz* - RSG) of June 25, 2021. | 0 | 0 |
|  **Total guarantees** | **620451** | **749550** |

---

(1) Does not include guarantees under the KfW Law with respect to money borrowed, bonds issued and derivative
transactions entered into by KfW. For information relating to KfW's borrowings, see "KfW—Business—Financial Markets—Funding."

(2) Includes export finance loans extended by KfW IPEX-Bank guaranteed by the Federal Republic through HERMES, the
official German export credit insurer. For information relating to loans extended by KfW IPEX-Bank benefiting from HERMES coverage, see "KfW—Business—Export and Project Finance (KfW IPEX- Bank)—Business."

*Source: Bundesministerium der Finanzen, Finanzbericht 2026, Overview 8.1.3, page 295* 

*<u>(https://www.bundesfinanzministerium.de/Content/DE/Downloads/Broschueren_Bestellservice/finanzbericht-2026.html).</u>* 

------

SUBSCRIPTIONS OR COMMITMENTS BY THE FEDERAL REPUBLIC

TO INTERNATIONAL ORGANIZATIONS AS OF END OF DECEMBER 2025

---

| | | |
|:---|:---|:---|
| Name of organization | Subscription or<br>commitment by the<br>Federal Republic (1) | Amount paid in |
|  | (EUR in millions) | (EUR in millions) |
|  IMF (2) | 37277.2 | 37277.2 |
|  International Bank for Reconstruction and Development (IBRD) (3) | 14304.7 | 1043.5 |
|  International Development Association (IDA) (3) | 30577.6 | 30577.6 |
|  International Finance Corporation (IFC) (3) | 1261.39 | 1261.39 |
|  European Investment Bank (EIB) (4) | 48539.2 | 4329.4 |
|  African Development Bank (AfDB) (3) | 11950.4 | 408.2 |
|  African Development Fund (AfDF) (3) | 5100.5 | 4888.7 |
|  Asian Development Bank (AsDB) (3) | 5764.4 | 288.3 |
|  Asian Development Fund (AsDF) (3) | 1927.0 | 1834.6 |
|  Inter-American Development Bank (IDB) (3) | 3242.6 | 233.2 |
|  Inter-American Investment Corporation (IIC) (3) | 26.1 | 26.1 |
|  Fund for Special Operations (FSO) (3) |  |  |
|  International Fund for Agricultural Development (IFAD) (3) | 776.8 | 683.4 |
|  Caribbean Development Bank (CDB) (3) | 102.6 | 22.63 |
|  Special Development Fund of the Caribbean Development Bank (SDF) (3) | 119.2 | 116.2 |
|  European Bank for Reconstruction and Development (EBRD) (4)(5) | 2655.96 | 553.97 |
|  Council of Europe Development Bank (CEB) (4)(6) | 1689.63 | 209.85 |
|  Asian Infrastructure Investment Bank (AIIB) (3) | 4484.2 | 896.8 |

---

(1) Subscriptions are in part committed in USD, SDR or EUR. SDR or EUR commitments are converted to USD at year-end exchange rates, except that certain SDR commitments are converted at the fixed conversion rate of SDR 1 = USD 1.39959.

(2) Quota in SDR: 26,634.4 Mio. SDR. As of December 31, 2025, 1 SDR is valued at USD 1.369500. Source:
computation provided by the Ministry of Finance based on data provided by the IMF; the subscription (quota) is fully paid in by the Deutsche Bundesbank. The foreign currency part of the quota (25% of the subscription) and the Deutsche
Bundesbank's further contributions to the IMF's financing are part of the foreign currency reserves of the Deutsche Bundesbank.

(3) Source: computation provided by the Ministry of Finance and the Ministry for Economic Cooperation and
Development.

(4) Source: computation provided by the Ministry of Finance based on euro exchange rate of the European Central Bank
of EUR 1 per USD 1.0389 in effect on December 31, 2024.

(5) Capital increase pending completion. The Federal Republic committed to the subscription of new shares in an
amount of EUR 343.6 million/USD 356.966 million.

(6) Capital increase pending completion. The Federal Republic committed to new paid-in capital of EUR 50.168 million/USD 52.120 million for 2025 and 2026.

## Ex-99.E

**Exhibit (e)**![LOGO](g109115dsp013.jpg)

Combined Management Report

------

Financial Report > <u>Combined Management Report</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **[Basic information on KfW Group](#ex99_e114871_1)** | **3** |
| [KfW's business model](#ex99_e114871_2) | 3 |
| [Group structure](#ex99_e114871_3) | 6 |
| [Strategic objectives 2029](#ex99_e114871_4) | 7 |
| [Internal management system](#ex99_e114871_5) | 8 |
| [Alternative key financial figures used](#ex99_e114871_6) | 10 |
| **[Economic report](#ex99_e114871_7)** | **12** |
| [General economic environment](#ex99_e114871_8) | 12 |
| [Development of KfW Group](#ex99_e114871_9) | 14 |
| [Development of the KfW Group earnings position](#ex99_e114871_10) | 18 |
| [Development of net assets of KfW Group](#ex99_e114871_11) | 22 |
| [Development of the KfW Group financial position](#ex99_e114871_12) | 24 |
| **[Risk report](#ex99_e114871_13)** | **26** |
| [Overview of key indicators](#ex99_e114871_14) | 26 |
| [Current developments](#ex99_e114871_15) | 28 |
| [Basic principles and objectives of risk management](#ex99_e114871_16) | 29 |
| [Organisation of risk management and monitoring](#ex99_e114871_17) | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Risk management bodies and responsibilities](#ex99_e114871_18) | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Credit Risk Committee](#ex99_e114871_19) | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Market Price Risk Committee](#ex99_e114871_20) | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Non-Financial Risk Committee](#ex99_e114871_21) | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Internal capital adequacy assessment process](#ex99_e114871_22) | 33 |
| [Risk management approach of KfW Group (overview)](#ex99_e114871_23) | 32 |
| [Types of risk](#ex99_e114871_24) | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Credit risk](#ex99_e114871_25) | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Portfolio structure](#ex99_e114871_26) | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Equity investment risk](#ex99_e114871_27) | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Market price risk](#ex99_e114871_28) | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Liquidity risk](#ex99_e114871_29) | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Internal liquidity adequacy assessment process](#ex99_e114871_30) | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Operational risk](#ex99_e114871_31) | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Reputational risk](#ex99_e114871_32) | 52 |
| [Additional internal control procedures](#ex99_e114871_33) | 52 |
| **[Forecast and opportunity report](#ex99_e114871_34)** | **54** |
| [General economic environment and development trends](#ex99_e114871_35) | 54 |
| [New business projections of KfW Group](#ex99_e114871_36) | 57 |
| [Funding projections](#ex99_e114871_37) | 60 |
| [Earnings projections](#ex99_e114871_38) | 61 |
| [Overall conclusion](#ex99_e114871_39) | 61 |

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The figures in tables were calculated exactly and added up.

Figures presented may not add to totals because of independent rounding.

Actual zero amounts and amounts rounded to zero are presented as EUR 0 million.

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## Basic information on KfW Group
The KfW management report is combined with the group's management report in accordance with Section 315 (5) in conjunction with Section 298 (2) of the German Commercial Code (*Handelsgesetzbuch – "HGB"*). The combined management report is included in the KfW Group financial report and is submitted to the German Company Register for publication.

The KfW annual financial statements prepared in accordance with HGB and the group financial report are also available online at www.kfw.de.

Information on KfW as the parent company can be found under a separate section, "Notes to the KfW annual financial statements prepared in accordance with the German Commercial Code".

The KfW consolidated financial statements were prepared in accordance with the provisions of Section 315e HGB in conjunction with the International Financial Reporting Standards (IFRS) as applicable within the European Union. With the exception of the HGB information in the section "Notes to the KfW annual financial statements prepared in accordance with HGB", all financial figures in this combined management report, including the comparative figures for the previous year, are reported in accordance with IFRS.

**KfW's business model** 

KfW is a promotional bank of the Federal Republic of Germany in the legal form of a public law institution. The Federal Government owns 80% of KfW's share capital, 33% of which are attributable to the ERP Special Fund (*ERP-Sondervermögen*). The German federal states own the remaining 20%. KfW is subject to the Law Concerning KfW (*KfW-Gesetz – "KfW Law"*), which defines its functions and sets out the requirements for KfW's operating activities. This set of functions is defined in Article 2 of the KfW Law and represents the implementation of Understanding II, which was reached with the European Commission. KfW's functions include the carrying out of promotional business, related transactions and mandated transactions. Because of its special business model, comparing KfW with commercial banks is possible only to a very limited extent.

KfW's primary and core statutory objective is its promotional business, in accordance with Article 2 (1) of the KfW Law. It consists of promotional measures, particularly in the form of financing for SMEs, the professions and business start-ups, venture capital, housing, environmental protection, infrastructure, technical progress and innovation, internationally agreed promotional programmes and development cooperation (Article 2 (1) no. 1 of the KfW Law). The promotional business also involves financing regional and local authorities and special-purpose associations under public law (*öffentlich-rechtliche Zweckverbände*), measures with purely social objectives and for the promotion of education. Moreover, project financing is part of KfW's promotional business, insofar as it is co-financed by European financing institutions in the interest of the European community, as is export financing outside the European Union ("EU")/European Economic Area ("EEA") or in countries with official status as candidates for EU accession, provided that such funding is carried out on a syndicated basis or that there is insufficient financing available in the relevant countries (Article 2 (1) nos. 2 to 4 of the KfW Law). KfW's promotional business is conducted pursuant to a state mandate in accordance with Article 2 (1) no. 1 of the KfW Law. KfW is entitled to conduct other business pursuant to Article 2 (1) nos. 2 to 4, and in particular Article 2 (3) of the KfW Law also under its own responsibility.

A significant portion of promotion, particularly in the areas of SMEs, start-ups, venture capital, technical progress and innovation, is covered by European Recovery Program ("ERP") promotion carried out by KfW. The ERP Special Fund contributed funds to KfW's equity, which was recognised under the Capital reserve as ERP promotional reserves. ERP promotion is executed based on the approaches in the annual ERP Economic Planning Acts (*ERP-Wirtschaftsplangesetz*). The ERP Special Fund is the largest shareholder based on KfW's total capital ratio, due to the contribution of ERP promotional reserves.

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Where these operations are directly related to the fulfilment of its promotional tasks, KfW may also conduct additional transactions in accordance with Article 2 (3) of the KfW Law (related transactions). These include strategic equity investments at KfW's own risk, KfW's refinancing and treasury management measures as well as refinancing of KfW IPEX-Bank GmbH ("KfW IPEX-Bank") in line with market conditions. KfW may engage in other transactions only to the extent that these are expressly mandated by the German Federal Government on a case-by-case basis if there is a public interest in accordance with Article 2 (4) of the KfW Law (mandated transactions). Pursuant to Article 2 (3) sentence 3 of the KfW Law, KfW is expressly prohibited from engaging in financial commission business and deposit business with the general public. It therefore refinances its lending business via the capital markets, primarily by issuing bonds.

In structuring its business activities, KfW follows the principle of subsidiarity and functions as a countercyclical bank offering structure and stability. It is therefore primarily active in the areas where market mechanisms alone would lead to socially or economically disadvantageous results. KfW's offering is designed to avoid distorting the market. Generating profit is merely a secondary objective. KfW's business model as a promotional bank without a primary profit-making objective and without a trading book is a key factor in its fundamentally conservative risk culture.

In accordance with the retention requirement (Article10 (1) of the KfW Law), there is no distribution of net profit to KfW shareholders. The annual net profit resulting after depreciation, amortisation and provisions is allocated to a statutory reserve. These funds are available to strengthen the binding regulatory capital ratios and can be re-deployed for promotional purposes subject to these ratios being met. The funds, therefore, remain in the promotional cycle.

In carrying out its transactions, KfW is subject to the requirement of competitive neutrality in cooperating with commercial banks. The remit as defined in the KfW Law in implementation of Understanding II reached with the European Commission ensures that KfW does not enter into significant competition with commercial banks. An on-lending principle is generally applied in the core domestic promotional business areas (Article 3 (1) of the KfW Law). Derogations therefrom may be made with approval of the Board of Supervisory Directors. The on-lending principle means that credit institutions or other financing institutions are involved in granting financing, enabling final borrowers to receive KfW loans in the legal form of loans from their own primary bank, which in turn refinances such operations via KfW. Therefore, KfW does not need to operate a branch network to sell its products. The on-lending principle applies exclusively in the promotional areas pursuant to Article 2 (1) no. 1 a) to f) of the KfW Law, with the particular exception of financing for municipalities, for purely social purposes and for education.

Funding on the money and capital markets has a material impact on the group's business activities. KfW's creditworthiness, which is assessed by rating agencies, is key to its funding conditions. Based on what is referred to as institutional liability (*Anstaltslast*), the Federal Republic of Germany is obligated to safeguard or maintain KfW's economic basis, thereby ensuring KfW's ability to function. In addition to institutional liability, it is necessary to mention the comprehensive liability of the German Federal Government under Article 1a of the KfW Law, which extends to loans taken out and bonds issued by KfW, forward transactions structured as fixed transactions, the rights conferred by options and other loans to KfW, and loans to third parties insofar as they are expressly guaranteed by KfW.

The guarantee of the Federal Republic pursuant to Article 1a of the KfW Law along with the ownership structure result in KfW's classification as a "public sector entity" in accordance with Article 4 (1) no. 8 CRR. This makes it possible to use the exemption under Article 116 (4) CRR, by which creditors of exposures to KfW can apply a risk weight of 0% to an instrument covered by the federal guarantee.

KfW is subject to legal supervision by the Federal Government exercised by the Federal Ministry of Finance in consultation with the Federal Ministry for Economic Affairs and Energy. As a public-law institution, KfW is subject to regular audits by the Federal Audit Office. With regard to compliance with the applicable provisions of banking supervisory law applicable in accordance with the KfW Regulation, KfW is subject to supervision by the

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German Federal Financial Supervisory Authority (*Bundesanstalt für Finanzdienstleistungsaufsicht – "BaFin"*) and the Bundesbank. However, KfW is neither a credit institution nor a financial services institution within the meaning of the German Banking Act (*Kreditwesengesetz, "KWG"*) nor a credit institution within the meaning of CRD V.

The responsible bodies at KfW (the Board of Supervisory Directors and the Presidial and Nomination Committee) deal with the strategy documents, particularly the business strategy including strategic objectives, as well as the strategic guidelines and the group business sector planning, based on the KfW Law and KfW Bylaws. The legal supervisor is also regularly involved in dealing with the strategy documents and other important matters.

As the promotional bank of the Federal Republic of Germany and the federal states, KfW bears particular responsibility for the sustainable impacts of its financing activities. KfW's business strategy and sustainability strategy are therefore closely aligned with one another. KfW plays a leading role with a particular view to the forward-looking transformation of the economy and the financial market towards greenhouse gas neutrality. KfW works in accordance with its broad statutory remit, with a primary focus on "climate and environment" and "digitalisation and innovation" in line with the guiding principle: "Boost competitiveness and resilience". To ensure a sustainable impact, KfW endeavours to combine the economic, environmental and social dimensions of sustainability in all promotional areas.

As the promotional bank of the Federal Republic of Germany, KfW supports private individuals, businesses, municipalities, and developing countries and emerging economies with low-interest loans, grants and advisory services. In addition to promotional lending business, equity financing constitutes another key component of KfW's promotional business. KfW primarily refinances its promotional activities through two sources, the most important being funds raised on the money and capital markets. In this context, KfW benefits from its triple A credit rating and the very favourable terms associated with it (market funds). Moreover, the Federal Government makes federal budget funds available to KfW, for instance in the context of promotion in development cooperation, which KfW passes on to the relevant customers. The business refinanced using budget funds is generally recognised as trust activities as it is conducted on behalf of the Federal Government. KfW also received funds from the government-owned Economic Stabilisation Fund (WSF) in addition to refinancing via market and budget funds for selected mandated transactions pursuant to Article 2 (4) of the KfW Law and following consultation with the Federal Government. There is the option of follow-on financing via the WSF.

KfW passes on its refinancing advantage to borrowers as part of the promotional lending business carried out under its statutory promotional mandate in accordance with Article 2 (1) No. 1 of the KfW Law. In the domestic business sectors, KfW also grants additional subsidies in the form of interest rate reductions affecting its own earnings position in certain programmes. These, along with other promotional contributions, such as incentives to on-lending banks to process microloans, constitute promotional expense. Moreover, KfW grants loans on behalf of the Federal Government, in domestic promotion in particular, in which the government makes budget funds available as earmarked promotional contributions in the form of interest rate reductions, repayment bonuses and/or assumption of risks for targeted promotion of political objectives. In addition, KfW awards grants on behalf of the Federal Government and using federal budget funds, primarily in domestic promotion and development cooperation. The specific structure of the promotional programmes is set out in special federal laws, policies and budgetary decisions. Transactions in which the Federal Republic of Germany has an interest can be carried out as mandated transactions in accordance with Article 2 (4) of the KfW Law.

KfW has equity, comprising share capital, the reserve from the ERP Special Fund, capital reserves and retained earnings. This equity is primarily for KfW's promotional capacity, as it serves to hedge the risks generally associated with promotional activities and the banking business. Any profits generated are channelled into KfW's reserves and thus also indirectly boost its promotional business.

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**Group structure** 

In line with its products and services, KfW Group is divided into the following business sectors: Mittelstandsbank & Private Kunden (*SME Bank* & *Private Clients*), Individualfinanzierung & Öffentliche Kunden (*Customised Finance* & *Public Clients*), KfW Capital, KfW Development Bank, DEG, Export and project finance, Financial markets and Head office, to which the main products and services are attributed as follows:

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| | |
|:---|:---|
| **Business sectors** | **Products/services** |
|  | – Start-up financing |
|  | – Financing of general corporate investments and investments |
| Mittelstandsbank & Private Kunden | in innovation, energy and environmental protection |
| (*SME Bank* & *Private Clients*) | – Education financing |
| | – Financing for housing construction, conversion and refurbishment |
|  | – Financing of municipal and social infrastructure |
| Individualfinanzierung & Öffentliche | – Customised corporate financing with equity and debt capital |
| Kunden | – Customised financing of banks and promotional institutions of the federal |
| (*Customised Finance* & *Public Clients*) | states |
| | – Mandated transactions for energy suppliers (debt capital) |
| KfW Capital | – Investments in German and European venture capital and venture debt funds |
| KfW Capital | – Co-investments in start-ups (via special purpose vehicles) |
| Export and project finance | – Financing of German and European export activities |
| Export and project finance | – Financing of projects and investments which are of special interest |
| Export and project finance | for Germany and Europe |
| KfW Development Bank | – Promotion of developing countries and emerging economies with |
| KfW Development Bank | standard loans/grants refinanced through federal budget funds and |
| KfW Development Bank | promotional/development loans from market funds raised by KfW |
| <br> DEG | <br> – Private enterprise financing in developing countries and emerging economies |
| Financial markets | – Securities and money market investments |
| Financial markets | – Holding arrangements for the Federal Republic of Germany |
| Financial markets | – Transactions mandated by the Federal Government, loan granted to Greece |
| Financial markets | – Funding |
| Head office | – Central interest rate and currency management |
| Head office | – Strategic equity investments |

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In addition to KfW (that is, the business sectors Mittelstandsbank & Private Kunden (*SME Bank* & *Private Clients*), Individualfinanzierung & Öffentliche Kunden (*Customised Finance* & *Public Clients*), KfW Development Bank, Financial markets and Head office), the group includes six consolidated subsidiaries. The main operational subsidiaries are KfW IPEX-Bank (responsible for the business sector Export and project finance), DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) and KfW Capital GmbH & Co. KG (KfW Capital).

KfW IPEX-Bank addresses the global lending business in Export and project finance that is not part of KfW's promotional activities and that is subject to competition in the financial services sector. In addition to its own market business, KfW IPEX-Bank manages the fiduciary business conducted on behalf of and for the account of KfW under an agency agreement. KfW IPEX-Bank is subject to the KWG and banking supervisory regulations. As a consequence of its total assets exceeding EUR 30 billion and its classification as a significant entity, its supervisory authority changed from BaFin and the Bundesbank to the European Central Bank in 2025.

DEG is one of the largest European development finance institutions for long-term financing in the private sectors of developing countries and emerging economies. DEG's objective is to achieve a developmental impact within the meaning of the Sustainable Development Goals (SDGs) of the United Nations' 2030 Agenda through reliable, long-term financing and advisory services for private-sector entities.

KfW Capital, represented by KfW Capital Verwaltungs GmbH, is responsible for equity financing as part of the domestic promotional business. KfW Capital is an institutional investor that invests in venture capital and venture debt funds related to Germany at all stages and across all sectors. In addition to its own market business conducted at its own risk, KfW Capital manages Federal Government funds on a fiduciary basis. KfW Capital also functions as KfW's agent for KfW's equity investments in funds, which it enters into on a fiduciary basis for the Federal Government in the context of the Future Fund (*Zukunftsfonds*).

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**Composition of KfW Group Total assets (IFRS, before consolidation)** 

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| | | |
|:---|:---|:---|
|  | **Total assets as<br>of 31 Dec. 2025** | **Total assets as<br>of 31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| KfW, Frankfurt am Main, Germany | 535339 | 540309 |
| **Subsidiaries** |  |  |
| KfW IPEX-Bank GmbH, Frankfurt am Main, Germany | 40504 | 38337 |
| DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, Cologne, Germany | 8889 | 9156 |
| KfW Beteiligungsholding GmbH, Frankfurt am Main, Germany | 4116 | 3521 |
| KfW Capital GmbH & Co. KG, Frankfurt am Main, Germany | 1809 | 1287 |
| Interkonnektor GmbH, Frankfurt am Main, Germany | 236 | 249 |
| KfW IPEX-Bank Asia Ltd., Singapore (IPEX Asia) | 16 | 16 |
| **Investments accounted for using the equity method** | **Total assets as<br>of 30 Sep. 2025** | **Total assets as<br>of 30 Sep. 2024** |
| Green for Growth Fund, Southeast Europe S.A., Luxembourg (11.2%), Luxembourg | 1091 | 1093 |
| coparion GmbH & Co. KG, Cologne (16.4%), Germany | 251 | 345 |
|  | **31 Dec. 2025** | **31 Dec. 2024** |
| DC Nordseekabel GmbH & Co. KG, Bayreuth (50.0%), Germany | 755 | 802 |

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**Strategic objectives 2030** 

KfWplus is the strategic agenda that serves as the basis on which KfW seeks to realise its vision of the digital transformation and promotional bank. It defines the priorities that KfW will set for its products and services in the coming years and how its organisation will reflect these priorities. KfW positions its strategic agenda KfWplus in line with the "Boost competitiveness and resilience" concept, with a focus on the "climate and environment" and "digitalisation and innovation" action areas. The aim is to make the promotional impact measurable and a focal point in order to successfully pursue the dual transformation. Private capital is also specified as a lever to drive sustainable transformation. KfW's strength forms the foundation. Customers who use KfW's financing and/or promotional offers are at the heart of KfWplus, along with investors in KfW. The strategic objectives implement the control components of KfWplus, to enable comprehensive control and the achievement of the group's strategic targets. This system of objectives provides the group with a clear roadmap, indicating the direction in which KfW would like to take over the next five years. It defines KfW Group's targeted medium-term positioning and sets top-level objectives for the bank as a whole. It is subject to an annual review along with the defined targets and key performance indicators ("KPIs") in close consultation with the departments. The objectives of the previous year are reviewed for relevance, completeness and level of aspiration and adjusted based on changed parameters or newly determined priorities. Efforts are made, however, to maintain a high degree of consistency to ensure that there are no fundamental changes made to the strategic road map in the course of the annual review. The Board of Supervisory Directors addresses the strategic objectives as part of group business sector planning.

The overarching aim of the strategic objectives 2030 is to boost competitiveness and resilience for sustainable improvement of living conditions. The purpose was aligned with the updated KfWplus to ensure consistency throughout KfW's strategic approach. KfW strives to boost the competitiveness and resilience of the German economy and society through targeted measures and initiatives. Its vision remains to position itself as the digital transformation and promotional bank that uses innovative approaches and technologies to make a significant contribution to sustainable development. KfW focuses on close cooperation with its partners and customers to develop future-viable solutions together. The strategic objective system was reviewed as a whole in 2025 and a new structure was developed based on the strategic focus areas. The strategic focus areas are the key to translating KfW's vision into tangible actions and priorities. They are directed at the central departments, which help to prioritise resources, make decisions and control the direction of the corporate strategy. They also act as a framework with which the specific targets and KPIs are aligned. KfW

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uses the following six strategic focus areas: "promotional mandate, impact and impetus", "culture and employee potential", "digitalisation and AI", "modernisation of banking systems", "risk and regulatory governance", and "profitable business model". The alignment of the strategic objectives with the strategic focus areas ensures that KfW's entire strategic approach is consistent and that the individual strategic elements are interconnected. The management-relevant group targets provide the basis for the 2026 group business sector planning, and primarily comprise: under "promotional mandate, impact and impetus", the quotas for climate and environment (>38%), digitalisation and innovation (>10%), SMEs (>40%) and promotional quality (75–80%); under "risk and regulatory governance", the total capital ratio (≥ regulatory requirements plus a combined buffer) and the economic coverage ratio (≥140%); and under "profitable business model", consolidated profit (>EUR 1 billion) and limiting the increase in administrative expense (~3% p.a.). Moreover, KfW aims to achieve 1.5°C alignment of KfW financing and climate neutrality by the middle of the century in line with the targets of the Federal Republic of Germany (sustainability in the strategic focus area of "promotional mandate, impact and impetus").

**Internal management system** 

KfW Group has an integrated strategy and planning process. Conceived as a group-wide strategy process, group business sector planning is KfW Group's central planning and management tool. Group business sector planning consists of three consecutive sub-processes performed every year: defining objectives, implementation and quality assurance, and finalisation. The overall strategy and planning process includes the collaboration of staff responsible for planning in all areas.

Objectives: The KfWplus transformation agenda and the strategic objectives form the basis for strategic planning. Within this strategic framework and based on assumptions regarding future development of relevant factors, the business sectors derive strategic proposals for medium-term development of their business activities in a base case scenario. These take into account both opportunities and risks relating to external factors (including market development, regulatory requirements, climate policy, the competitive situation and customer behaviour) and internal factors and resources (including human and technical and organisational resources, promotional expense, primary cost planning and tied-up capital) as well as targeted earnings levels. It involves regular evaluation of the key business and revenue drivers for the business sectors and the group. The business sectors are also called upon to address the environmental, social and governance ("ESG") risks resulting from their business activity. As risk drivers, these can have a considerable impact on the likelihood of occurrence or the extent of typical banking risks. Although ESG risks primarily affect the lending and equity finance business of KfW Group, they can also potentially give rise to consequential risks, such as reputational risk. The initial regular capital budget in the base case and two adverse cases is prepared with a multi-year horizon on this basis. This makes early identification of any capital bottlenecks arising from strategic considerations or changed parameters possible; in response, measures can be agreed on and implemented to mitigate such capital shortages. In addition to the business sectors, the departments also make a major contribution to achievement of strategic targets. By involving these departments, their own strategies are aligned with the strategic objectives. The business sectors and departments can include major new projects relevant throughout the bank that contribute towards the strategic focus areas and targets of the strategic objectives (bank backlog projects) in the planning and management processes on a rolling basis. Promised benefits (such as project efficiencies) are also considered in business sector and departmental planning. Based on the strategic focus areas, the Executive Board prioritises all new and ongoing bank backlog projects across the group on a quarterly basis. The Executive Board defines top-down objectives for each business sector (promotion, risk, finances, full-time equivalents [FTEs] and costs) and department (FTEs and costs) for the entire planning period based on the assessment of the strategic development of business activities from a group perspective in the dimensions promotion, finances and risk and the group-wide bank backlog.

Implementation and quality assurance: The business sectors plan their new business, risks and earnings, and the budgets and staffing in the form of FTEs for all departments and business sectors, based on the top-down objectives defined by the Executive Board, taking into account any changes in external or internal factors and in close collaboration with Finance and Risk Controlling. These are reviewed for consistency with the group's and business sectors' strategic planning. The interest rate forecast plays a key role in shaping KfW's earnings position. Scenarios with vastly different interest rates (+200/–200 basis points) are therefore considered in addition to the expected base case scenario. The plans are also assessed for future risk-bearing capacity in a second round of regular capital budgeting in a base case and two adverse cases over a multi-year horizon.

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Finalisation: The Executive Board approves the resulting budget or has plans fine-tuned in a revision round if necessary. In the event of changes, there is consultation with the Risk Controlling department to ensure consistency between the business and risk strategies. The key conclusions from the planning process are incorporated into the business and risk strategies. The Executive Board has overall responsibility for formulating and adopting both strategies. The business strategy comprises the group's strategic objectives for its main business activities as well as important internal and external factors, which are included in the strategy and planning process. It also contains the business sectors' contribution to the strategic objectives and the measures for achieving each objective. Moreover, the business strategy combines the budget at the group and business sector levels. The Executive Board sets out KfW Group's risk policies in its risk strategy, which is consistent with the business strategy. The risk strategy is based on the overarching aim of ensuring risk-bearing capacity and liquidity for the long term. Group business sector planning is used to review and redetermine risk appetite. The main risk management approaches are also incorporated into the risk strategy as a basis for operational risk management. The group business sector planning process ends when the Executive Board adopts a final budget for the entire planning period, including future capital requirements and business and risk strategies. The budget is then presented to the supervisory body (Board of Supervisory Directors) for approval at the last meeting of the Board of Supervisory Directors of the year, along with the business and risk strategies for discussion. The Board of Supervisory Directors also addresses the strategic objectives within the context of the business strategy. After the Board of Supervisory Directors has decided on the business and risk strategy, it is communicated to the staff in an appropriate manner. On the other hand, the result from the valuation of derivatives, which KfW carries out purely for hedging purposes, is not included in the planning, as it cannot be controlled or planned due to the complex interdependencies affecting the measurement at fair value of derivatives in the context of KfW's refinancing activities. The temporary effects on results from the measurement of such hedging relationships included in the actual figures are recognised separately in internal reporting and the management report as alternative key financial figures.

The adoption of the business sector planning serves as a foundation for the group's qualitative and quantitative objectives. The Executive Board reviews achievement of the objectives both on a regular and an ad hoc basis during the current financial year. The assumptions concerning external and internal factors made when determining the business strategy are also subject to regular checks. Strategic management involves analysing the development of the management-relevant group targets set out above under "KfWplus and strategic objectives 2030" in the strategic focus areas "promotional mandate, impact and impetus" and "profitable business model", achievement of the targets and the reasons for any shortfalls. Strategic assumptions are reviewed and a systematic variance analysis of early objectives and forecasts is performed at the beginning of every year. Ad hoc issues of strategic relevance are also addressed in consultation with the group's departments, and, if necessary, recommendations for action concerning potential strategy adjustments or optimisation of the use of resources are made to the Executive Board by means of the strategic performance report. The results of the analysis are included in further strategy discussions and strategic planning processes. The integrated forecasting process serves at mid-year as a comprehensive basis for interim quantitative management input on group variables of strategic importance (new business, risks and earnings in respect of funding opportunities), while providing a well-founded guide to achieving planned objectives. The achievement of objectives is regularly monitored by the Board of Supervisory Directors based on reports submitted under the KfW Bylaws. The commentary in these reports outlines analyses of causes and any potential plans for action. Comprehensive and detailed reports are prepared on a monthly or quarterly basis as part of financial controlling. These comprehensive, detailed analyses at group and business sector level comprise earnings and cost developments and are reported to specific business sectors and departments. Additionally, complete analyses of significant relevance to overall group performance are presented directly to the Executive Board. The risk controlling function is implemented alongside strategic and financial controlling. Early warning systems have been established and mitigation measures defined for the business sectors, all material risk types and risk-bearing capacity in general in line with the risk management requirements set out in the risk strategy. All controlling and monitoring approaches are integrated into regular risk reporting to the Executive Board. The Board of Supervisory Directors receives a risk report on a quarterly basis.

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**Alternative key financial figures used** 

The combined management report contains financial figures that are defined neither in the HGB nor the IFRS accounting standards. In its strategic objectives, KfW uses key indicators prescribed by accounting standards and supervisory regulations as well as key figures that are geared towards promotion as the core business activity. It also uses key figures in which the temporary effects on results determined and reported in the consolidated financial statements in accordance with IFRS, and which KfW does not consider representative, are adjusted.

KfW has defined the following alternative key financial figures:

**Promotional business volume** 

Promotional business volume refers to the commitments of each business sector during the reporting period. In addition to the lending commitments shown in the statement of financial position, promotional business volume comprises loans from Federal Government funds for promotion of developing countries and emerging economies – which are accounted for as trust activities – financial guarantees, equity financing and securities purchases (in the green bond asset class). Promotional business volume also includes grants committed as part of development aid and in domestic promotional programmes. Allocation to the promotional business volume for the current financial year is generally based on the commitment date of each loan, financial guarantee and grant, and the transaction date of the equity finance and securities transactions. On the other hand, allocation of general funding and global loans to the promotional institutions of the federal states (*Landesförderinstitute* – *"LFI"*) and to student loans provided by the government under the Federal Education Assistance Act (*Bundesausbildungsförderungsgesetz* – *"BAföG"*) is based on the individual drawdown volume and date, instead of the total volume of the contract at the time of commitment. In the lending business, financing amounts denominated in foreign currency are converted into euros at the exchange rate on the commitment date, whereas in the securities and equity finance business, the conversion generally occurs at the rate on the transaction date.

See the economic report "Development of KfW Group" or segment reports for a breakdown of promotional business volume by individual segment.

**Promotional expense** 

Promotional expense is understood to mean certain expenses arising in the two business sectors Mittelstandsbank & Privatkunden (*SME Bank* & *Private Clients*) and Individualfinanzierung & Öffentliche Kunden (*Customised Finance* & *Public Clients*) to achieve KfW's promotional objectives.

KfW's overall promotional expenses primarily comprise interest rate reductions accounted for at present value. KfW grants these reductions during the first fixed interest rate period for certain domestic promotional loans in new business in addition to passing on favourable funding conditions based on its rating (triple A). The difference between the fair value of these promotional loans and the transaction value during the first fixed interest rate period, due to the interest rate being below the market rate, is recognised in profit or loss as an interest expense and accounted for as an adjustment to the carrying amount under the item Financial assets at amortised cost. In addition, the accumulated interest rate reductions over the fixed interest rate period are recognised through profit or loss in Net interest income (see the relevant notes on KfW's promotional lending business, financial assets at amortised cost, and provisions).

An additional promotional component (in commission expense) comprises the expense paid in the form of upfront fees to sales partners for processing microloans. Promotional expense also contains disposable and product-related marketing and sales expenses (administrative expense), expenses for innovative digital promotional approaches (commission and administrative expense), and promotional grants awarded by KfW from 2023 in the context of European Recovery Program promotion (other operating expense).

Promotional expense included in Interest, Commission and Administrative expense and Other operating expense is reported separately in the internal presentation of the earnings position due to its special relevance as a management variable.

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**Cost/income ratio (before promotional expense)** 

The cost/income ratio (before promotional expense) is calculated as administrative expense (excluding promotional expense) in relation to net interest and commission income before promotional expense.

The cost/income ratio ("CIR") reflects costs in relation to income and is thus a measure of efficiency. To enable a comparison of the CIR with other (non-promotional) institutions, an adjustment for the components of KfW's promotional business results is made to the numerator (administrative expense) and denominator (net interest and commission income).

In addition to the CIR, KfW also reports an adjusted CIR, which takes into account KfW's specific business model. Under domestic promotional programmes with expense-based remuneration, as well as for implementation of Financial Cooperation KfW receives compensation in the amount of the costs incurred, which means that for these products, the CIR is almost 100%. In order to ensure comparability of KfW's CIR with that of other financial institutions, the adjusted CIR does not take into account income and expenses related to these products.

**Consolidated profit before IFRS effects** 

Consolidated profit before IFRS effects from hedging is another key financial figure based on Consolidated profit in accordance with IFRS. Derivative financial instruments are entered into for hedging purposes. Under IFRS, the requirements for the recognition and valuation of derivatives and hedges give rise to temporary net gains or losses that are offset over the entire term of the transactions. In KfW's opinion, such temporary effects on results are not representative due to the economically effective hedging relationships.

Consequently, the following reconciliations are performed by eliminating temporary contributions to profit and loss as follows:

– Valuation results from micro and macro hedge accounting.

– Net gains or losses from the use of the fair value option to avoid an accounting mismatch in the case of funding including related hedging derivatives.

– Net gains or losses from the fair value accounting of hedges with high economic effectiveness but not qualifying for hedge accounting.

– Net gains or losses from foreign currency translation of foreign currency positions, in accordance with recognition and valuation requirements for derivatives and hedging relationships.

These temporary contributions to profit and loss make up the IFRS effects from hedging relationships.

**Economic result** 

The alternative key financial figures were expanded in financial year 2025 to include the economic result.

The economic result comprises the operating earnings components net interest and commission income and administrative expense (each before promotional expense), along with the valuation result before IFRS effects from hedging relationships. The valuation result, which primarily comprises risk provisions in the lending business, net gains/losses from hedge accounting and fair value valuation of equity investments, is adjusted for temporary IFRS effects from hedging relationships, which KfW does not consider economically representative.

KfW Group's contribution to society and the economy in the form of promotional and tax expense is presented separately and is not included in the economic result.

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## Economic report
**General economic environment** 

Global real domestic product ("GDP") increased by 3.3% in 2025 compared with 2024, according to estimates by the International Monetary Fund ("IMF"). This means that real GDP growth for the global economy in 2025 was as high as in 2024: lower for industrialised countries and higher for developing countries and emerging economies. The global environment was characterised in part by increased economic and trade policy uncertainty. The global Trade Policy Uncertainty (TPU) index averaged 538 points in 2025, up from an average of 132 points in 2024, while the global Economic Policy Uncertainty (EPU) index averaged 395 points in the period up to and including October, from an average of 223 points in 2024. Another factor was the increase in the effective US import tariff rate from 2.7% in 2024 to 18.8% in September 2025, according to the IMF, based on the weighted average of published statutory tariffs. Despite trade conflicts, global trade volume grew by 4.1% in 2025, outpacing real global GDP growth, after increasing by 3.6% year on year in 2024 according to IMF data. According to IMF calculations, the annual average rate of global consumer price inflation declined to 4.1% in 2025 from 5.8% in the previous year.

**Gross domestic product at constant prices** 

---

| | | | |
|:---|:---|:---|:---|
|  | <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2025**<br> **estimate** | **2024** | **2015–2024**<br>**average** |
| **Year-on-year change in %** |  |  |  |
| Global economy<sup>1)</sup>  | 3.3 | 3.3 | 3.1 |
| Industrialised countries<sup>1)</sup>  | 1.7 | 1.8 | 1.9 |
| Developing countries and emerging economies<sup>1)</sup> | 4.4 | 4.3 | 4.0 |

---

<sup>1)</sup> The IMF aggregates the annual growth rates of GDP at constant prices for each country on the basis of the shares of country-specific GDP at purchasing power parity in the corresponding global aggregate to the growth rate of global real GDP, for industrialised countries as well as developing countries and emerging economies. The average is calculated as the geometric mean of annual growth rates. 

Euro area economic growth proved surprisingly robust in the face of heightened US trade barriers in the spring of 2025. Price-adjusted GDP rose by 1.5% in 2025 after growing by just 0.9% in 2024 (see table below on gross domestic product at constant prices, year-on-year change). Harmonised consumer price inflation averaged 2.1% for the year, slightly lower than in the previous year (2.4%). While deliveries that had been brought forward due to the US tariffs contributed to an increase in exports at the beginning of the year, exports weakened as the year progressed. This weakening was also a consequence of the price competitiveness of euro area companies in global trade deteriorating as a result of the appreciation of the euro. Overall, the stronger increase in imports relative to exports slowed GDP growth. Private consumption made the biggest contribution to economic output, with rising disposable incomes and falling inflation fuelling this development. The rise in the household savings rate in the first half of the year, however, put a slight damper on the recovery in consumption. Gross fixed capital formation recovered significantly compared with the previous year, supported by government spending. Economic development was hampered by high geoeconomic uncertainty caused by US tariff policy and the geopolitical conflicts in Ukraine and the Middle East. The monetary easing policy of the European Central Bank ("ECB"), which had begun in the previous year, led to better financing conditions overall. It ended in June after four interest rate cuts. Fiscal policy did not provide any significant economic stimulus in the euro area. Lower current expenditure by member states was offset by higher government investment spending, including on defence.

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**Gross domestic product at constant prices, year-on-year change** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2024** | **2015–2024**<br>**average** | <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1999–2024**<br> **maximum** |
|  | **in %** | **in %** | **in %** | **in %** |
| Euro area | 1.5 | 0.9 | 1.5 | 6.4<sup>1)</sup> |
| Germany | 0.2 | –0.5 | 0.94.1<sup>2)</sup> |  |

---

<sup>1)</sup> 2021 <sup>2)</sup> 2010

GDP in Germany increased by 0.2% year on year in 2025. This increase was the result of the global economic developments described above, of lower interest rates and rising purchasing power among private households, and of a consumer price index ("CPI") inflation rate that averaged 2.2% in 2025, unchanged from 2024 (+2.2%). In 2024, German GDP had contracted by 0.5%, after having grown by an average of 0.9% p.a. for the previous ten years from 2015 to 2024 inclusive (see the table entitled Gross domestic product at constant prices, year-on-year change). Positive impetus for the GDP growth in 2025 came from both private and government consumption expenditure (+1.4% and +1.5%, respectively). Gross capital formation in other assets also increased (+3.8%). By contrast, gross capital formation in machinery and equipment (–2.3%) and in new buildings (–0.9%) slowed GDP growth once again. This means that, overall, domestic use rose by 1.7% in 2025. On the other hand, net exports reduced GDP growth by 1.5 percentage points, partly due to the introduction of new US import tariffs on EU products, with exports declining (–0.3%) and imports rising (+3.6%). From a production perspective, gross value added in the economic sectors provided both positive and negative impetus for the rate of change in GDP in 2025, with the effects virtually cancelling each other out overall. The biggest decline in gross value added was seen among financial and insurance service providers (–3.9%), while the public services, education and health sector saw the biggest increase (+1.4%). Gross value added in the manufacturing industry, excluding construction, fell by 1.0%, while it rose by 1.2% in the retail, transport and hospitality sector. The number of persons in employment located in Germany was virtually unchanged (0.0%) year on year in 2025, at 46.0 million.

The average annual rise in headline inflation in the euro area moved closer to the ECB's 2% target in 2025. This development was mainly due to the decline in service inflation, which nevertheless remained above average at the end of 2025. By contrast, inflation in the United States, as measured by the Personal Consumption Expenditures Price Index, remained virtually unchanged. Against the backdrop of increased US import tariffs, declining inflation for services was offset by rising inflation rates for consumer goods and commodities. At the end of 2025, the annual inflation rate in the euro area (rate of change in the Harmonised Index of Consumer Prices, December) was 2.0%; the annual inflation rate in the United States (rate of change in the Personal Consumption Expenditures Price Index, November) in the same period was 2.8%.

Due to the sustained downward trend in inflation, the ECB initially continued the monetary easing measures it had introduced in June 2024. In the first half of 2025, the ECB reduced its most important key rate, the deposit rate, by a total of 100 basis points (bp) to 2% in four steps. The ECB maintained this key interest rate level for the rest of the year, citing the stable inflation outlook and sustained growth in a difficult global environment. The ECB discontinued its asset purchase programmes, the pandemic emergency purchase programme ("PEPP") and the regular asset purchase programme ("APP") in 2022, and started decreasing portfolios again in 2023. Principal payments due under the APP and PEPP were no longer reinvested in 2025. This resulted in a reduction in total securities held for monetary policy purposes by approximately 13% compared to the end of 2024, to EUR 3,752 billion.

The US Federal Reserve began lowering the federal funds target rate range in September 2024 and reduced it by a total of 100 bp to 4.25%–4.5% by the end of 2024. After that, the considerable uncertainty regarding the impact of US economic policy prompted the Fed to pause its interest rate cuts. It was not until September 2025 that the US Federal Reserve resumed its monetary easing policy in response to weaker labour market data, with the target range for the Fed Funds Rate still standing at 3.5%–3.75% at the end of the year. It initially continued to shrink its balance sheet by trimming assets, a process it began in 2022. This process continued, albeit at a slower pace, through most of 2025, and concluded as of 1 December 2025.

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The development in interest rates in the euro area and the USA was characterised in part by a reduction in key rates in 2025. As a result, money market rates continued the downward trend that had begun in the previous year. The three-month EURIBOR, for instance, averaged 2.18% in 2025, down from 3.57% in 2024, while in the US, the three-month SOFR reference rate (CME) stood at 4.15%, down from 5.06% in the previous year. In addition, risk premiums widened due to mounting uncertainty about future interest rates and growing government debt, which affected longer-term swap rates and government bond yields in particular. In annual average terms, this meant that some key market interest rates were higher than in the previous year despite monetary policy easing. For instance, the 5-year EUR swap rate for 2025 fell to an annual average of 2.34% from 2.58%, while the yield on 10-year German government bonds rose from 2.34% to 2.64%. The 5-year USD swap rate averaged 3.58% (2024: 3.85%), and the yield on 10-year US Treasuries was 4.29% (2024: 4.20%). Yield curves, measured by the difference between 10-year and 2-year swap rates, normalised in 2025 and returned to an upward slope. In 2025, the average EUR swap curve slope was 49 bp (2024: –26 bp), while the US swap curve slope was 20 bp (2024: –45 bp).

Both the protectionist reorientation of US trade policy and attempts to exert greater political influence over the US Federal Reserve hit market participants' confidence in the predictability of US economic policy. This had a particular impact on the currency markets. While the US dollar came under pressure, the euro made significant gains. Compared with the end of 2024, the euro appreciated by 13.4% against the dollar and by 6.8% against the currency basket comprising the region's 41 most important trading partners in 2025.

**Development of KfW Group** 

The group enjoyed another strong promotional year in 2025, with the promotional business volume from its core promotional business increasing significantly to EUR 96.9 billion compared with the previous year (EUR 79.6 billion). Taking into account the significant decline in transactions directly mandated by the Federal Government, the total volume of promotional business was down significantly on the previous year's level of EUR 112.8 billion at EUR 98.0 billion.

KfW Group's **earnings position** was highly satisfactory in 2025 despite the persistent challenging geopolitical and macroeconomic environment. Consolidated profit was EUR 1.0 billion, in line with expectations. The year-on-year decline (EUR 1.4 billion) is mainly attributable to negative IFRS effects from hedging amounting to just under EUR 0.4 billion; these are temporary fluctuations in earnings. Consolidated profit before IFRS effects from hedging of around EUR 1.4 billion was on a par with the prior-year level. The operating result remained strong at EUR 1.9 billion. Despite a decline, the valuation result remained positive at EUR 0.1 billion (2024: EUR 0.2 billion). The economic result fell slightly to EUR 2.0 billion (2024: EUR 2.1 billion) due to the lower valuation result. On this basis, KfW kept its promotional expense for 2025 stable at the 2024 level of EUR 0.5 billion. Tax expense was unchanged year on year at EUR 0.2 billion.

Consolidated **total assets** decreased by EUR 4.6 billion to EUR 540.7 billion in financial year 2025. This was primarily attributable to the decline in Net loans and advances by EUR 10.0 billion, in particular due to repayments under the coronavirus special programme 2020, as well as impairment losses, triggered by interest rates, on derivatives with positive fair values amounting to EUR 5.9 billion. Liquidity held, on the other hand, rose by EUR 11.8 billion. The volume of own issues under Certificated liabilities increased slightly to EUR 460.6 billion (31 Dec. 2024: EUR 455.5 billion). Equity rose by EUR 1.1 billion to EUR 40.6 billion, mainly due to the consolidated profit.

Business performance in 2025 was largely characterised by the following developments:

**A. Demand for KfW products slightly higher than in previous year** 

The group recorded another very strong promotional year in its core business in 2025 with new commitments totalling EUR 96.9 billion (2024: EUR 79.6 billion). Of this amount, EUR 10.1 billion was attributable to ERP promotional business. At the same time, the normalisation of promotional business, due to the discontinuation of substantial commitments under special programmes directly mandated by the Federal Government, led to a significant decline in the total promotional volume from EUR 112.8 billion to EUR 98.0 billion. In the previous year, mandated transactions totalling EUR 33.2 billion, such as to secure energy supplies or for investments in energy infrastructure, had significantly boosted the volume of new domestic business. Non-recurring effects from mandated transactions were only of minor significance in 2025, amounting to EUR 1.1 billion.

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This effect was also reflected in the promotional business volume for total new domestic promotional business, which saw a decline in new commitments from EUR 79.0 billion to EUR 62.0 billion. This largely affected the business sector Individualfinanzierung & Öffentliche Kunden *(Customised Finance* & *Public Clients)*, with a drop from EUR 41.6 billion to EUR 12.2 billion. By contrast, the primary promotional business of domestic promotion involving loans and grants increased significantly by at least one third compared with the previous year, to EUR 61.0 billion (2024: EUR 45.8 billion). The business sector Mittelstandsbank & Privatkunden *(SME Bank* & *Private Clients)* showed particularly positive development, with the promotional business volume increasing significantly from EUR 35.8 billion to EUR 49.1 billion. This encouraging development affected Mittelstandsbank in particular, where, following the negative impact of state aid requirements in 2024, there was considerable pent-up demand in 2025. This related in particular to the KfW Renewable Energy programme, with commitments amounting to EUR 9.2 billion. Positive performance was also recorded in business with private clients, rising from EUR 22.4 billion to EUR 25.5 billion, particularly in the key promotional area energy efficiency and renewable energy. The original promotional business in the business sector Individualfinanzierung & Öffentliche Kunden *(Customised Finance* & *Public Clients)* rose from EUR 8.4 billion to EUR 11.2 billion. The subsidiary KfW Capital recorded new business volume totalling EUR 0.7 billion in 2025 (2024: EUR 1.6 billion). The year-on-year decline was mainly due to one-off commitments for two facilities made in 2024 on a fiduciary basis for the Federal Government as part of the Future Fund.

International business commitments improved in financial year 2025, despite the sustained difficult market environment, with a promotional business volume of EUR 36.5 billion (2024: EUR 34.2 billion). The business sector Export and project finance recorded new commitments of EUR 24.2 billion (2024: EUR 23.9 billion). In the business sector KfW Development Bank, commitments rose significantly from EUR 7.8 billion to EUR 10.0 billion, around two thirds of which related to loans refinanced by KfW on the capital market. Despite persistent globally challenging conditions, DEG recorded commitments totalling EUR 2.4 billion, almost matching the strong performance of the previous year (EUR 2.5 billion).

The development of new business volume in 2025 affected the most important non-financial performance indicators relevant to management, i.e., the SME and environmental shares of financing. At 43%, the group-level SME share of financing was above the target of the strategic objectives (>40%) and above the prior-year figure of 35%. At the same time, the environmental share of 51% in 2025 exceeded the target of the strategic objectives (>38%) and the prior-year level (44%). At 86%, the promotional quality target set out in the strategic objectives (75%–80%) was exceeded. At 6%, the digitalisation share remains below the target level (>10%).

KfW raised a volume of EUR 71.0 billion in the capital markets to fund its business activities in 2025 (2024: EUR 78.1 billion).

**Promotional business volume of KfW Group** 

---

| | | |
|:---|:---|:---|
| | <br> **2025** | **2024** |
| | **EUR in billions** | **EUR in billions** |
| <br>**Domestic business** | **62.0** | **79.0** |
| Mittelstandsbank & Private Kunden *(SME Bank* & *Private Clients)*  | 49.1 | 35.8 |
| Individualfinanzierung & Öffentliche Kunden *(Customised Finance* & *Public Clients)*  | 12.2 | 41.6 |
| KfW Capital | 0.7 | 1.6 |
| **Financial markets** | **0.0** | **0.0** |
| **International business** | **36.5** | **34.2** |
| Export and project finance | 24.2 | 23.9 |
| KfW Development Bank | 10.0 | 7.8 |
| DEG | 2.4 | 2.5 |
| **Volume of new commitments<sup>1)</sup>** | **98.0** | **112.8** |

---

<sup>1)</sup> Adjusted for export and project financing refinanced through KfW programme loans

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**B. Operating result on a par with strong previous year** 

At EUR 1,903 million, the operating result before valuation and before promotional expense remained at the strong prior-year level (EUR 1,917 million) despite a one-off provision set up for personnel, exceeding the target (EUR 1,732 million) by 10%. This positive development was primarily due to net interest income (before promotional expense), which at EUR 2,957 million exceeded the target (EUR 2,791 million) by 6%, and once again represented the group's main source of income. Net interest income benefited from higher borrowings and a higher return on equity, as well as higher interest margins. At EUR 685 million, net commission income (before promotional expense) was similar to the prior-year level (EUR 675 million) and exceeded the target (EUR 664 million) by 3%. By contrast, administrative expense before promotional expense rose by EUR 81 million to EUR 1,739 million, exceeding the planned ceiling by EUR 16 million. This increase was due primarily to the introduction of new promotional programmes and one-off provisions for personnel. Overall, the cost-income ratio before promotional expense rose from 46.4% to 47.7%.

**C. Risk provisions reflect macroeconomic uncertainties** 

In financial year 2025, risk provisions in the lending business resulted in net expense of EUR 155 million, whereas in the previous year, net income of EUR 39 million was generated. The result is also significantly better than the projected standard risk costs (EUR 457 million). Geopolitical and macroeconomic uncertainties primarily affected the provisions for latent risks for stage 1 and 2 loans, resulting in net additions totalling EUR 79 million (2024: net reversals of EUR 51 million). Net expenses for non-performing loans (stage 3) rose to EUR 119 million (2024: EUR 50 million). This was offset by income from recoveries of loans previously written off of EUR 42 million, which was similar to the previous year (EUR 43 million).

**D. Positive valuation result from equity investment portfolio** 

The group generated income from the measurement of its equity investment portfolio amounting to EUR 102 million in 2025, compared with EUR 149 million in the previous year. Almost all business sectors contributed to this result with net income from securities. KfW Capital's equity investment portfolio made the strongest contribution to earnings of EUR 184 million, following income of EUR 31 million in the previous year. DEG's equity investments generated net income from securities of EUR 102 million, although this was more than offset by a negative foreign currency result of EUR 289 million. This brought DEG's total valuation result to EUR –187 million (2024: EUR +81 million). Positive contributions also came from business sectors KfW Development Bank (EUR 53 million, 2024: EUR 20 million), Individualfinanzierung & Öffentliche Kunden *(Customised Finance* & *Public Clients)* (EUR 29 million, 2024: EUR –2 million) and Head office (EUR 27 million, 2024: EUR –3 million). The business sector Export and project finance closed the year with a negative valuation result of EUR –5 million (2024: EUR +22 million).

**E. Promotional expense slightly below high prior-year level** 

KfW's domestic promotional expense, which has a negative impact on its earnings position, almost matched the prior-year level at EUR 468 million (2024: EUR 504 million). The target ceiling of EUR 457 million was slightly surpassed. The drop in promotional expense is due to the fact that no new commitments to grant subsidies under the ERP promotional programmes were entered into in financial year 2025, with the aim of first utilising the provisions recognised for the commitments in previous years. In the previous year, provisioning resulted in an expense of EUR 70 million. By contrast, interest rate reductions showed positive development, rising by EUR 15 million to EUR 421 million due to a significant increase in the promotional business volume subject to reduced interest rates, combined with lower reduction margins.

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The following key figures provide an overview of the development of key financial figures in financial year 2025:

**Key financial figures of KfW Group** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| <br>**Key figures of the income statement** | **EUR in millions** | **EUR in millions** |
| Operating result before valuation (before promotional expense) | 1903 | 1917 |
| Economic result | 2016 | 2097 |
| Promotional expense | 468 | 504 |
| Consolidated profit before IFRS effects | 1359 | 1354 |
| Consolidated profit | 1002 | 1402 |
| Cost-income ratio (before promotional expense) | 47.7% | 46.4% |
|  | **31 Dec. 2025** | **31 Dec. 2024** |
| **Key figures of the statement of financial position** | **EUR in billions** | **EUR in billions** |
| Total assets | 540.7 | 545.4 |
| Volume of lending | 580.5 | 593.5 |
| Volume of business | 706.4 | 713.3 |
| Equity | 40.6 | 39.6 |
| Equity ratio | 7.5% | 7.3% |

---

**Comparison with the previous year's forecast** 

---

| | | |
|:---|:---|:---|
| | **2024 forecast for 2025** | **2025 actual** |
| <br>**New business** |  |  |
| Promotional business volume | EUR 84.4 billion | EUR 98.0 billion |
| **Funding** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EUR 65–70 billion | EUR 71.0 billion |
| **Result** |  |  |
| Consolidated profit | EUR 1.0 billion | EUR 1.0 billion |
| Net interest income (before promotional expense) | EUR 2.8 billion | EUR 3.0 billion |
| Net commission income (before promotional expense) | EUR 0.7 billion | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EUR 0.7 billion |
| Administrative expense (before promotional expense) | EUR 1.7 billion | EUR 1.7 billion |
| Risk provisions for lending business | EUR –0.5 billion | EUR –0.2 billion |
| Valuation result | EUR 0.2 billion | EUR 0.1 billion |
| Promotional expense | EUR 0.5 billion | EUR 0.5 billion |

---

The main differences between the forecasts from the Financial Report 2024 and the actual business development in 2025 are presented in the Economic report.

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**Development of the KfW Group earnings position** 

The internal earnings position was expanded in financial year 2025 to include an alternative financial indicator, the **economic result.** The economic result comprises the operating earnings components net interest and commission income and administrative expense (each before promotional expense), along with the valuation result before IFRS effects from hedging relationships. The valuation result, which primarily comprises risk provisions in the lending business, net gains/losses from hedge accounting and fair value valuation of equity investments, is adjusted for temporary IFRS effects from hedging relationships, which KfW does not consider economically representative. The previous year's figures have been adjusted accordingly.

The earnings position in financial year 2025 was characterised by a sustained strong operating result, a positive, albeit declining, valuation result and promotional expense that was just below the high level of the previous year. Consolidated profit amounted to EUR 1.0 billion, which was below the previous year's figure (EUR 1.4 billion) but in line with the target.

**Reconciliation of internal earnings position (before promotional expense) with external earnings position (after promotional expense) for financial year 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Reconciliation** | |  |
|  | <br>**EUR in**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**millions** | **EUR in**<br> **millions** | <br>**EUR in**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**millions** |  |
| Net interest income<br> (before promotional expense) | 2957 | –425 | 2532 | Net interest income |
| Net commission income<br> (before promotional expense) | 685 | –13 | 672 | Net commission income |
| Administrative expense<br> (before promotional expense) | 1739 | 11 | 1751 | Administrative expense |
| **Operating result before valuation**<br> **(before promotional expense)** | **1903** | **–450** | **1453** | **Operating result before valuation** |
| Risk provisions for lending business | –155 | –4 | –158 | Net gains/losses from risk provisions |
| Net gains/losses from hedge accounting before IFRS effects | 0 | –128 | –128 | Net gains/losses from hedge accounting |
| Other financial instruments at fair value through profit or loss before IFRS effects | 258 | –229 | 30 | Net gains/losses from other financial instruments at fair value through profit or loss |
| Securities and investments | –4 | 4 | 0 | Net gains/losses from disposal of financial assets at amortised cost |
| Net gains/losses from investments accounted for using the equity method | –6 | 0 | –6 | Net gains/losses from investments accounted for using the equity method |
| **Operating result after valuation (before promotional expense and IFRS effects)** | **1998** | **–806** | **1191** | **Operating result after valuation** |
| Net other operating income<br> (before promotional expense) | 18 | –18 | 0 | Net other operating income or loss |
| **Economic result** | **2016** | **–824** | **1192** | **Profit/loss from operating activities** |
| Promotional expense | 468 | –468 | 0 | – |
| Taxes on income | 189 | 0 | 189 | Taxes on income |
| **Consolidated profit before IFRS effects** | **1359** |  |  | **–** |
| IFRS effects from hedging | –356 | 356 | 0 | – |
| **Consolidated profit** | **1002** | **0** | **1002** | **Consolidated profit** |

---

**18** 

KfW Financial Report 2025

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Financial Report > Combined Management Report > <u>Economic report</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Reconciliation of internal earnings position (before promotional expense) with external earnings position (after promotional expense) for financial year 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Reconciliation** | |  |
|  | <br>**EUR in**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**millions** | **EUR in**<br> **millions** | <br>**EUR in**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**millions** |  |
| Net interest income<br> (before promotional expense) | 2900 | –408 | 2493 | Net interest income |
| Net commission income<br> (before promotional expense) | 675 | –12 | 664 | Net commission income |
| Administrative expense<br> (before promotional expense) | 1658 | 14 | 1672 | Administrative expense |
| **Operating result before valuation**<br> **(before promotional expense)** | **1917** | **–433** | **1484** | **Operating result before valuation** |
| Risk provisions for lending business | 39 | –1 | 39 | Net gains/losses from risk provisions |
| Net gains/losses from hedge accounting before IFRS effects | 0 | 107 | 107 | Net gains/losses from hedge accounting |
| Other financial instruments at fair value through profit or loss before IFRS effects | 102 | –58 | 44 | Net gains/losses from other financial instruments at fair value through profit or loss |
| Securities and investments | 0 | 1 | 0 | Net gains/losses from disposal of financial assets at amortised cost |
| Net gains/losses from investments accounted for using the equity method | 20 | 0 | 20 | Net gains/losses from investments accounted for using the equity method |
| **Operating result after valuation (before promotional expense and IFRS effects)** | **2078** | **–385** | **1693** | **Operating result after valuation** |
| Net other operating income<br> (before promotional expense) | 18 | –70 | –52 | Net other operating income or loss |
| **Economic result** | **2097** | **–455** | **1641** | **Profit/loss from operating activities** |
| Promotional expense | 504 | –504 | 0 | – |
| Taxes on income | 239 | 0 | 239 | Taxes on income |
| **Consolidated profit before IFRS effects** | **1354** |  |  | **–** |
| IFRS effects from hedging | 48 | –48 | 0 | – |
| **Consolidated profit** | **1402** | **0** | **1402** | **Consolidated profit** |

---

At EUR 1,903 million, the **Operating result before valuation (before promotional expense)** reached the strong prior-year level (EUR 1,917 million) and was also well above the target (EUR 1,732 million).

At EUR 2,957 million, **Net interest income (before promotional expense)** exceeded the prior-year level (EUR 2,900 million) by 2% and the target (EUR 2,791 million) by 6%. One key factor driving the year-on-year increase was the renewed increase in income from borrowings, which was considerably above both the previous year's figure and the target. KfW benefited from favourable funding conditions on the capital and money markets, which can be attributed to its excellent credit rating. Income from investment of own funds also increased significantly due to slightly higher interest rates and higher investment volumes compared to the previous year. Furthermore, there was a slight increase in interest margin income including commitment fees, which significantly exceeded expectations.

**Net commission income (before promotional expense)** amounted to EUR 685 million, which was slightly above the 2024 figure (EUR 675 million) and exceeded the target (EUR 664 million). The decisive factor here was commission income in the business sector Export and project finance, which rose by EUR 21 million to EUR 47 million, due in particular to loan fees, which were also below budget as a result. By contrast, there was a decline in income from cost-based remuneration that KfW received from the Federal Government for implementation of domestic promotional programmes and administration of Financial Cooperation. KfW generated income of EUR 346 million from the implementation of its domestic promotional programmes, compared to EUR 363 million in the previous year and a target of EUR 342 million. The year-on-year decrease in this income was primarily due to the decline in remuneration in the promotional priority area of energy efficiency and renewable energy, as well as education financing. KfW received income of EUR 258 million from the administration of Financial Cooperation within KfW Development Bank (2024: EUR 255 million). The remuneration from the Federal Government was offset in part by related administrative expenses.

**19** 

KfW Financial Report 2025

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Financial Report > Combined Management Report > <u>Economic report</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Administrative expense (before promotional expense)** increased by 5% from EUR 1,658 million to EUR 1,739 million in financial year 2025. This trend is partly due to a one-off provision related to personnel, which meant that administrative expense slightly exceeded the planning assumptions (EUR 1,724 million). Personnel expense increased by 13% overall to EUR 1,088 million, compared to EUR 961 million in the previous year. The drop in non-personnel expense (before promotional expense) from EUR 697 million to EUR 652 million was due primarily to a decrease in the use of external service providers.

The development of the operating earnings components resulted in an overall cost-income ratio (before promotional expense) of 47.7%, which was higher than in the previous year (46.4%). Adjusted for income and expenses from products for which cost-based remuneration has been agreed with the Federal Government, the cost-income ratio for 2025 amounted to 36.3% (2024: 33.7%).

Due to persistent uncertainty in the geopolitical and macroeconomic environment, the **result from risk provisions for lending business** was a total expense of EUR 155 million overall (2024: net income of EUR 39 million). This result was nevertheless significantly better than the projected standard risk costs (EUR –457 million).

The negative development in provisions for individual risks that cannot be allocated is essentially due to two opposing effects. The negative effects from updating the segment monitor and from the adjustment of the second, more conservative macroeconomic scenario, which takes into account the increased economic and trade policy uncertainty, were partly offset by positive effects from various methodological refinements in the risk models. Risk provisions for performing loans (stages 1 and 2) were increased overall. This resulted in net expense of EUR 79 million (2024: net income of EUR 51 million).

Net additions of EUR 119 million (2024: EUR 50 million) were recorded in risk provisions for non-performing loans (stage 3), including direct write-offs, in 2025. Net additions of EUR 82 million (2024: EUR 98 million) were largely recorded by the business sector Mittelstandsbank & Private Kunden *(SME Bank* & *Private Clients)*. Of this amount, EUR 79 million was attributable to education financing (2024: EUR 76 million). The business sector Export and project finance also recorded net additions of EUR 26 million (2024: net reversals of EUR 50 million).

Income from recoveries of loans previously written off totalled EUR 42 million and was therefore on a par with the previous year (EUR 43 million). This income related primarily to the Mittelstandsbank & Private

Kunden *(SME Bank* & *Private Clients)* business sector.

Risk provisions for lending business increased slightly in financial year 2025 to EUR 2.0 billion (31 Dec. 2024: EUR 1.9 billion). This development reflected both a slightly higher provision for acute risks in stage 3 of EUR 1.4 billion and a slightly higher overall provision for individual risks that cannot be allocated, with provisions in stages 1 and 2 amounting to EUR 0.5 billion in total.

**Net gains/losses from other financial instruments at fair value before IFRS effects** amounted to EUR 258 million (2024: EUR 102 million). This result was affected by positive valuation effects from the equity investment portfolio and a positive foreign currency result.

The equity investment portfolios recognised at fair value through profit or loss generated total income of EUR 107 million in financial year 2025 (2024: EUR 129 million). KfW Capital made the biggest contribution to earnings at EUR 210 million, compared with EUR 33 million in the previous year. KfW Development Bank, the business sector Individualfinanzierung & Öffentliche Kunden *(Customised Finance* & *Public Clients)* and Head office also performed positively, with EUR 47 million (2024: EUR 13 million), EUR 29 million (2024: expense of EUR 2 million) and EUR 13 million (2024: expense of EUR 3 million), respectively. By contrast, DEG reported a negative valuation result of EUR 187 million (2024: income of EUR 81 million), with the net gain from securities of EUR 102 million (2024: expense of EUR 53 million) being offset by a wide margin by negative exchange rate effects of EUR 289 million, particularly associated with the weaker US dollar. The business sector Export and project finance reported an expense of EUR 5 million from valuations of equity investments, as against income of EUR 8 million in the previous year.

**20** 

KfW Financial Report 2025

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Financial Report > Combined Management Report > <u>Economic report</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

KfW Group achieved a positive result of EUR 133 million from the valuation of foreign currency positions in financial year 2025, EUR 178 million of which related to the valuation of hedging instruments for DEG's investments held in foreign currencies.

The measurement of securities at fair value through profit or loss yielded an almost balanced result, as in the previous year, of EUR 0 million.

**Net losses** totalling EUR 9 million were recorded **from securities and investments** and **from investments accounted for using the equity method** (2024: gains of EUR 19 million). EUR 6 million of these losses are attributable to investments accounted for using the equity method. Performance at KfW Capital was particularly responsible for this, with a loss of EUR 26 million. Head office and KfW Development Bank reported gains (EUR 14 million and EUR 6 million, respectively). In addition, an expense of EUR 4 million arose from general valuation allowances recognised on securities not measured at fair value.

In the case of securities not carried at fair value, developments in the financial markets resulted in a net difference of EUR 54 million between the carrying amount and the fair value (2024: EUR –167 million). This development is partly attributable to increases in the value of covered bonds.

**Net other operating income** (before promotional expense) was EUR 18 million, similar to the previous year's figure.

Developments in the operating result and the result from valuations, including other operating income (EUR 113 million, 2024: EUR 179 million), led to an **economic result** of EUR 2,016 million (2024: EUR 2,097 million). The slight decline in the economic result is mainly attributable to the EUR 67 million decrease in the valuation result.

At EUR 468 million in 2025, KfW's domestic **promotional expense**, which has a negative impact on KfW Group's earnings position, was down slightly on the prior-year level (EUR 504 million) but nevertheless marginally exceeded projections (EUR 457 million). The ERP promotional business proportion of promotional expense amounted to EUR 298 million.

Interest rate reductions are the key component of KfW's promotional expense. KfW grants these reductions for certain domestic promotional loans during the first fixed-interest-rate period, which has a negative effect on its earnings position. In addition, KfW passes on its favourable funding conditions, which benefit from its triple-A rating. At EUR 421 million, the volume of interest rate reductions increased once again in financial year 2025 (2024: EUR 406 million) and was in line with the projected figure (EUR 420 million). Of this amount, EUR 280 million (2024: EUR 276 million) was attributable to ERP promotional business. The main reason behind the increase in interest rate reductions was the rise in demand for promotional loans at reduced rates, coupled with lower reduction margins. Interest rate reductions from new business focused on the priority areas start-ups and corporate investment, innovation, and energy efficiency and renewable energy. The increase in interest rate reductions contributed to the growth of promotional business volume in the core promotional business to EUR 96.9 billion (2024: EUR 79.6 billion).

Net other operating income in financial year 2025 included promotional expense of EUR 18 million from KfW's commitment to future digital education projects in the context of TUMO learning centres. No promotional expense was reported in 2025 for promotional grants provided in addition to the lending business (2024: EUR 70 million). This is because, unlike in previous years, KfW did not enter into any commitments to award grants under the ERP promotional programmes in the reporting year. The interest accrued on provisions recognised for commitments entered into in previous years resulted in promotional expense of EUR 5 million.

Moreover, promotional expenses reported in net commission income and administrative expense amounted to EUR 25 million (2024: EUR 26 million). Among other things, this spending was aimed at the sale of KfW's promotional products.

**21** 

KfW Financial Report 2025

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The group recognised a **tax expense** of EUR 189 million for financial year 2025 (2024: EUR 239 million). This consisted of current taxes on income of EUR 149 million (2024: EUR 167 million) and deferred tax expense of EUR 41 million (2024: EUR 72 million). The retroactive tax exemption of DEG as of 1 January 2024 reduced both current and deferred tax expenses. Current taxes in 2025 were attributable primarily to the results of KfW IPEX-Bank.

The development of the earnings position led to **consolidated profit before IFRS effects** of EUR 1,359 million, which is on par with the previous year (EUR 1,354 million) and significantly above the long-term earnings potential of EUR 1 billion. This development can be explained primarily by the strong operating result before valuation and the positive, albeit declining, valuation result from the loan and equity investment portfolio. The slightly lower promotional expense and reduced tax expense contributed to the increase in earnings.

Consolidated profit before **IFRS effects from hedging** excludes effects from derivative financial instruments that the group uses exclusively for hedging purposes. Under IFRS, the requirements for the recognition and valuation of derivatives and hedges give rise, despite the economically hedged positions, to temporary net gains or losses that are offset over the entire term of the transactions. Against this backdrop, IFRS effects from hedging relationships amounting to EUR –356 million (2024: EUR 48 million) were eliminated from the earnings figure relevant for management purposes. These effects include the results from hedge accounting and from the measurement of borrowings recognised at fair value, including hedging derivatives entered into for this purpose. The negative IFRS effects in 2025 resulted from the reversal of the positive valuation effects from previous years (amortisation/pull-to-par). In addition, negative valuation effects due to interest rate developments, that cannot be fully reflected in hedge accounting in the statement of financial position, are reflected in the IFRS effects.

Overall, the group generated a **consolidated profit** of EUR 1,002 million, which is below the previous year (EUR 1,402 million) but in line with expectations (EUR 1,008 million).

**Development of net assets of KfW Group** 

Lending to banks and customers accounted for 80% of the group's assets as of 31 December 2025, unchanged from the previous year.

**Assets of KfW Group** 

31 December 2025 (31 Dec. 2024)

---

| |
|:---|
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |
| ![LOGO](g109115dsp34.jpg) |

---

Compared to the previous year, the **volume of lending** decreased by EUR 13.0 billion to EUR 580.5 billion (31 Dec. 2024: EUR 593.5 billion).

**22** 

KfW Financial Report 2025

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Volume of lending of KfW Group** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Loans and advances | 431948 | 441915 |
| Risk provisions for lending business | –1887 | –1818 |
| **Net loans and advances** | **430061** | **440097** |
| Contingent liabilities from financial guarantees | 3276 | 3462 |
| Irrevocable loan commitments | 136298 | 138628 |
| Loans and advances held in trust | 10887 | 11287 |
| **Total** | **580522** | **593475** |

---

Net loans and advances decreased by EUR 10.0 billion in 2025, mainly due to the decline of EUR 5.9 billion in the coronavirus special programme 2020, particularly in the KfW Entrepreneur Loan, KfW Entrepreneur Loan – SMEs and KfW Instant Loan 2020 programmes, and in the Energy-efficient Construction and Refurbishment loan programmes in the amount of EUR 5.4 billion. Overall, unscheduled repayments (EUR 12.2 billion; 31 Dec. 2024: EUR 11.1 billion) and scheduled repayments more than compensated for disbursements in new lending business. At EUR 430.1 billion, Net loans and advances accounted for 74% of lending volume.

Contingent liabilities from financial guarantees remained at the previous year's level, at EUR 3.3 billion. The decline in irrevocable loan commitments of EUR 2.3 billion to EUR 136.3 billion was mainly due to irrevocable commitments for liquidity support to energy suppliers in the amount of EUR –8.7 billion. On the other hand, there was an increase in irrevocable loan commitments as part of the Renewable Energy – Standard programme in the amount of EUR 6.1 billion. Within assets held in trust, the volume of Loans and advances held in trust, which primarily comprise loans to promote developing countries and emerging economies financed by budget funds provided by the Federal Republic of Germany, was down slightly to EUR 10.9 billion (31 Dec. 2024: EUR 11.3 billion).

Other loans and advances to banks and customers posted an increase of EUR 19.2 billion to EUR 52.1 billion. A total of EUR 13.7 billion of the increase resulted from reverse repo transactions, in which KfW acts in the capacity of lender, and from higher cash collateral provided from the derivatives business of EUR 4.2 billion.

At EUR 43.3 billion, the total amount of **securities and investments** was at the previous year's level.

**Securities and investments of KfW Group** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Bonds and other fixed-income securities | 37734 | 37982 |
| Shares and other non-fixed income securities | 0 | 0 |
| Equity investments | 5503 | 5031 |
| Shares in non-consolidated subsidiaries | 96 | 92 |
| **Total** | **43332** | **43106** |

---

The **securities portfolio** decreased by EUR 0.2 billion to EUR 37.7 billion in financial year 2025 (31 Dec. 2024: EUR 38.0 billion). The portfolio of Equity investments, including both direct and fund investments, and Shares in non-consolidated subsidiaries increased by EUR 0.5 billion to EUR 5.6 billion in 2025. This was mainly due to portfolio growth at KfW Capital.

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**Value adjustments from macro hedge accounting** rose by EUR 1.1 billion, largely due to interest rates, from EUR –9.4 billion to EUR –10.4 billion. Derivatives with positive fair values, which are primarily used to hedge refinancing transactions, fell from EUR 9.7 billion in the previous year to EUR 3.8 billion. This was primarily due to value adjustments of derivatives used in micro hedge accounting, which decreased from EUR 6.6 billion to EUR 1.3 billion.

KfW reduced its balances with central banks by EUR 7.0 billion to EUR 19.5 billion and made greater use of other investments, such as reverse repos and term deposits. Furthermore, the increase in credit support annex collateral furnished and the reduction in capital market liquidity were only partially offset by higher money market refinancing via commercial paper. The liquidity held continues to ensure KfW's ability to react to market events at short notice. There were only minor changes in the other asset line items in the statement of financial position.

**Development of the KfW Group financial position** 

KfW Group's funding strategy is based on four main product categories: "benchmark programmes in euros and US dollars", "Green Bonds – Made by KfW", "other public bonds" and "private placements". In 2025, KfW achieved a funding volume of EUR 71.0 billion on the international capital markets. This slightly exceeded the funding target of EUR 65–70 billion planned for 2025.

**Financial position of KfW Group** 

31 December 2025 (31 Dec. 2024)

![LOGO](g109115dsp36.jpg)

**Borrowings** decreased by EUR 6.9 billion to EUR 486.1 billion.

**Borrowings of KfW Group** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Short-term funds | 54995 | 33947 |
| Bonds and notes | 406707 | 422994 |
| Other funding | 24351 | 36042 |
| **Total** | **486054** | **492983** |

---

**24** 

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Funds raised in the form of certificated liabilities rose by EUR 5.1 billion to EUR 460.6 billion. The increase of EUR 21.4 billion was attributable to short-term issues of commercial paper, which amounted to EUR 53.9 billion (31 Dec. 2024: EUR 32.5 billion). Medium and long-term bonds and notes, which remain the group's principal source of funding, fell by EUR 16.3 billion. At year-end 2025, such funds amounted to EUR 406.7 billion (31 Dec. 2024: EUR 423.0 billion) and accounted for 84% of borrowings. Total short-term funds, including demand deposits and term deposits, amounted to EUR 55.0 billion, compared with EUR 33.9 billion in the previous year. The funding requirements for these programmes decreased due to loan repayments as part of the liquidity support to energy suppliers and the coronavirus special programme 2020. This largely resulted in a decline in Other funding by EUR 11.7 billion to EUR 24.4 billion (31 Dec. 2024: EUR 36.0 billion). This item mainly comprises promissory note loans by customers, which decreased by EUR 8.4 billion to EUR 16.3 billion, primarily due to funding via the Economic Stabilisation Fund ("WSF"). The cash collateral received, which primarily serves to reduce counterparty risk from the derivatives business, fell from EUR 4.5 billion in the previous year to EUR 1.2 billion.

The carrying amounts of **derivatives** with negative fair values, which were primarily used to hedge own issues, increased by EUR 1.3 billion, from EUR 9.3 billion as of 31 December 2024, largely due to changes in market parameters, and amounted to EUR 10.6 billion at year-end 2025.

There were only minor changes in the other liability line items of the statement of financial position.

At EUR 40.6 billion as of 31 December 2025, **equity** was EUR 1.1 billion above the level of EUR 39.6 billion as of 31 December 2024. The increase resulted in particular from consolidated profit (EUR 1.0 billion), which in turn increased retained earnings. Furthermore, the increase in the discount rate for pension obligations from 3.49% to 4.08% generated an increase of EUR 0.1 billion in revaluation reserves. The equity ratio increased year on year from 7.3% to 7.5% as of 31 December 2025, primarily due to the increase in equity.

**Equity of KfW Group** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Paid-in subscribed capital | 3300 | 3300 |
| Capital reserve | 8447 | 8447 |
| Reserve from the ERP Special Fund | 1191 | 1191 |
| Retained earnings | 27555 | 26552 |
| Revaluation reserves | 131 | 83 |
| **Total** | **40623** | **39573** |

---

**25** 

KfW Financial Report 2025

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Financial Report > Combined Management Report > <u>Risk report</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Risk report
**Overview of key indicators** 

Risks are reported at group level in accordance with KfW Group's internal risk management. The key risk indicators are presented below:

**Regulatory capital ratios** 

---

| | |
|:---|:---|
| ![LOGO](g109115dsp38.jpg) | <br> The marked decline in the total capital ratio by around 2.5 percentage points year on year is attributable to the significant increase of EUR 14.1 billion in the total risk exposure amount ("RWA"). This decrease resulted primarily from new business as well as the implementation of CRR III in Q1 2025 (in particular the change of measurement approach from A-IRB to F-IRB for banks and large corporates and adjusted risk weighting for equity investments. |
| ![LOGO](g109115dsp38.jpg) | A = Tier 1 capital ratio<br> B = Total capital ratio |

---

**Economic risk-bearing capacity** 

EUR in billions

---

| | |
|:---|:---|
| ![LOGO](g109115dsp38a.jpg) | Economic risk-bearing capacity was maintained at a confidence level of 99.9% at all times during the reporting year. The increase in available financial resources ("AFR") was primarily due to the positive annual result and refinements in methodology. The total capital requirement decreased, largely as a result of the lower capital requirement for credit risks following those refinements in methodology. |
| ![LOGO](g109115dsp38a.jpg) | A = Available financial resources<br> B = Total economic capital requirement |

---

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**Credit risk**

2025 (2024), Net exposure breakdown

---

| | |
|:---|:---|
| ![LOGO](g109115dsp39.jpg) | The revision of the risk model for collateralised on-lending business (see "Current developments") resulted in a significant decline in net exposure of the on-lending banks with an investment grade rating, and thus also in total net exposure. This decline caused an increase in the relative share of the other rating classes in the credit rating distribution even though no substantive developments could be identified.<br>|
| ![LOGO](g109115dsp39.jpg) | A = Investment grade<br> B = Non-Investment grade<br> C = Watch list<br> D = Default |

---

**Market price risk** 

2025 (2024), ECAP (EUR in billions)

---

| | | |
|:---|:---|:---|
| ![LOGO](g109115dsp39a.jpg) | The total capital requirement for market price risks increased year on year. This was primarily attributable to the higher economic capital requirement ("ECAP") requirement for interest and credit spread risk. The increase in interest risk, in turn, was due largely to the expansion of strategic interest risk positions. As regards credit spread risk, the higher market volatility and the exclusion of credit spreads in the measurement of pension provisions resulted in increased risk. | The total capital requirement for market price risks increased year on year. This was primarily attributable to the higher economic capital requirement ("ECAP") requirement for interest and credit spread risk. The increase in interest risk, in turn, was due largely to the expansion of strategic interest risk positions. As regards credit spread risk, the higher market volatility and the exclusion of credit spreads in the measurement of pension provisions resulted in increased risk. |
| ![LOGO](g109115dsp39a.jpg) | A = Interest risk | B = Interest volatility risk |
| ![LOGO](g109115dsp39a.jpg) | C = Currency risk | D = Credit spread risk |

---

**Liquidity risk** 

---

| | |
|:---|:---|
| ![LOGO](g109115dsp39b.jpg) | The liquidity risk indicator remained considerably below the internal limit throughout the year. Liquidity risk was measured based on a refined liquidity risk model as of year-end. The minimum excess coverage in the relevant stress scenario showed excess coverage of approximately EUR 39.31 billion as of 31 December 2025. |
| (Prior-year figures not provided due to refinement of liquidity risk model / transition to excess coverage) | A = Liquidity risk indicator (worst case) |

---

**27** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Operational risk** 

ECAP (EUR in millions)

---

| | |
|:---|:---|
| ![LOGO](g109115dsp40.jpg) | The ECAP for operational risks was virtually unchanged year on year. |
| ![LOGO](g109115dsp40.jpg) | <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> A = ECAP |

---

**Current developments** 

In financial year 2025, as in previous years, KfW Group refined the processes and instruments of its risk management and controlling, taking into account current banking supervisory requirements. The multi-stage refinement of the economic risk-bearing capacity calculation using the present value approach is now complete, following, in particular, the transition of discounting to risk-free curves as regards available financial resources and credit risk measurement. The adjusted provisions of CRR III were applied with respect to credit and equity investment risk. As with the calculation of available financial resources, there was also a transition to risk-free curves for present-value measurement of market price risk. The liquidity risk measurement method was also refined in 2025. This refinement involved both a revision of scenarios and the introduction of a new metric for liquidity risk indicators. While excess coverage and shortfalls had previously been reported as relative values, they will be stated in absolute EUR amounts going forward.

The Non-Financial Risk (NR) department was established as of 1 April 2025 with the aim of bundling and reinforcing the management of non-financial risks. Non-financial risks, in particular cybersecurity, data protection and operational and reputational risks, are gaining in importance in light of increasing digitalisation and new regulatory requirements such as the EU Digital Operational Resilience Act ("DORA"). The NR department combines relevant functions such as operational risk, ICT risk, third-party management, data protection, information security and business continuity management. This serves to further optimise risk management and sustainably improve resilience in the face of growing challenges.

Management of environmental, social and governance risks ("ESG risks") was further developed in the line units of KfW Group following completion of the group's tranSForm project at the end of 2024, to address the comprehensive new regulatory requirements on ESG risks. The integration of ESG risk drivers into existing risk management cycle instruments remains a focal point. A comprehensive ESG materiality assessment involved examining ESG risk drivers in credit and equity investment risk in three periods (short, medium and long term) for the first time. In addition, thresholds for defined ESG credit risk indicators ("ESG CRIs") have been monitored since 2025. The counterparty-related ESG risk profile used to identify and measure ESG risk drivers in credit risk was expanded in 2025 to include assessment of location-based physical climate and environmental risks for corporates. A particular focus was placed on biodiversity, including biodiversity-related risks, as part of the bioSFer project initiated in 2025.

The risk model for the on-lending business was simplified in the reporting year. Going forward, a reduced fixed loss given default compared with the previous measurement will be applied to loans and advances secured by assignment of end borrower loans. This simplification is based on the resolution regime of the Bank Recovery and Resolution Directive ("BRRD"). Under the BRRD, secured liabilities of institutions under resolution are not included in the bail-in cascade. As a result, KfW is protected from loss.

Compliance with the Basel Committee on Banking Supervision's standard number 239 (commonly referred to as BCBS 239), including the specifications of the Risk Data Aggregation and Risk Reporting ("RDARR") Guide, has been improved under KfW's RDARR project, which was initiated throughout the group in 2025. This in turn optimises KfW Group's data quality and reporting.

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**Basic principles and objectives of risk management** 

KfW Group has a statutory promotional mandate. Sustainable promotion is KfW Group's overarching purpose. The aim of risk management is for the group to take risks only to the extent that they appear manageable in the context of its current and anticipated earnings position and capital resources. KfW Group's risk/return management takes into account the business model of a promotional bank without the primary intention of generating a profit and without a trading book, with appropriate implementation of supervisory requirements constituting a fundamental prerequisite for the group's business activities.

The promotional bank business model determines the group's risk culture with its four regulatory-based elements: leadership culture, responsibilities, communication and incentives. Incentive structures for employees and their responsibilities are designed accordingly. Senior management specifies the desired code of conduct, with the desired dialogue established by means of communication with and through the relevant bodies.

**Organisation of risk management and monitoring** 

**Risk management bodies and responsibilities** 

KfW's Executive Board sets the group's risk guidelines as part of its overall responsibility. The Board of Supervisory Directors is informed at least quarterly of KfW Group's risk situation. The Risk and Credit Committee set up by the Board of Supervisory Directors is primarily responsible for advising the Board of Supervisory Directors about the group's current and future overall risk tolerance and strategy and supports it in monitoring the implementation of the latter. The Committee decides on loan approvals (including loans to members of management), operational level equity investments, funding and swap transactions, where committee authorisation is required by the KfW Bylaws. The Audit Committee monitors, above all, the accounting process and the effectiveness of the risk management system and internal control and offers recommendations to the Board of Supervisory Directors concerning its approval of KfW's annual and consolidated financial statements.

Additionally, the subsidiaries and organisational entities of KfW Group exercise their own control functions within the group-wide risk management system. Group-wide regulations, projects and working groups are in place to implement a consistent approach, such as in the rollout of rating instruments to subsidiaries or in the management and valuation of collateral. Responsibility for developing and structuring risk management and risk control activities is located outside the front-office departments and lies in particular with the Risk Controlling, Non-Financial Risk and Credit Risk Management areas.

Risk management within the group is carried out by various interconnected decision-making bodies. At the top of the system is the Executive Board, which takes key decisions on risk policy. There are three risk committees below Executive Board level (Credit Risk Committee, Market Price Risk Committee and Non-Financial Risk Committee) that prepare decisions for the Executive Board, take their own decisions within their remits, and also involve representatives from KfW subsidiaries in decision-making processes.<sup>1</sup><sup>)</sup> Internal Auditing has a fundamental right to attend risk management committee meetings. Working groups such as the Credit and Equity Investment Risk Working Group, Country Rating Working Group, Corporate Sector Risk Working Group, Market Price Risk Working Group and Hedge Committee support the committees. Committee resolutions are adopted by simple majority, whereby the rules on voting eligibility take appropriate account of the requirements of the respective roles and the independence of the Risk Controlling and front and back office departments in particular. Escalation to Executive Board level is possible in all committees.

<sup>1)</sup> Because ESG risks factor into a variety of different risk types, there is no separate ESG risk committee.

ESG risks are managed as needed through the committees responsible for specific risk types.

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![LOGO](g109115dsp42.jpg)

**Credit Risk Committee** 

The Credit Risk Committee is a decision-making and discussion body for lending decisions as well as for overarching loan portfolio and credit risk issues. The Credit Risk Committee is chaired by the Chief Risk Officer.

The weekly meetings of the Credit Risk Committee involve making lending decisions and preparing for decisions to be made by the plenary Executive Board in line with the credit approval policy, with KfW subsidiary exposures also being presented. Voting members of the committee are, in addition to KfW Group's Chief Risk Officer ("CRO"), the Head of Credit Risk Management, members of the Executive Board with front-office responsibilities and KfW IPEX-Bank's Chief Risk Officer. DEG's CRO is a member without voting rights. In addition, current developments in and management tools for the loan portfolio as well as fundamental issues concerning credit risk management are analysed on an ad hoc basis. This includes reports and submissions from the Country Rating Working Group and the Corporate Sector Risk Working Group. DEG's CRO, the managing director of KfW Capital responsible for risk issues and the Head of Risk Controlling are also entitled to vote on matters relating to the loan portfolio and general credit risk management issues.

Moreover, once a month, the Credit Risk Committee discusses overarching credit risk issues of risk controlling and makes decisions on significant adjustments in accordance with the competency matrix. These essentially include reports and draft resolutions on the risk situation and risk management – in particular on stress tests for credit and equity investment risks – as well as on credit risk methods and policies, and the submissions addressed in the Credit and Equity Investment Risk Working Group. Reports are also made on the development of regulatory requirements, their impact and the progress of implementation projects in KfW Group. Only the CRO and the Head of Risk Controlling are entitled to vote on these issues relating to the risk controlling function.

The Credit Risk Committee is supported by various working groups. The Country Rating Working Group serves as the central unit for assessing country risk. The Credit and Equity Investment Risk Working Group supports the committee in connection with methodological and procedural issues and decisions relating to credit and equity investment risk measurement instruments and rating systems, and collateral acceptance and valuation, in particular the (further) development of methods used, implementation of regulatory requirements, acknowledgement of validation results and adjustments to the relevant processes. The Corporate Sector Risk Working Group is a group-wide expert panel which analyses sector and product-related credit risks in the corporate segment. The decisions made, reports submitted, and other key topics addressed in the working groups are communicated to the Credit Risk Committee through the working group minutes.

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**Market Price Risk Committee** 

The Market Price Risk Committee meets monthly or on an ad hoc basis, as required, and is chaired by the Chief Risk Officer. In addition to the Chief Risk Officer, the members of the Executive Board responsible for capital markets business and finance are also represented. The members of the committee also include the heads of Risk Controlling, Financial Markets, Finance, Transaction Management and the CROs of KfW IPEX-Bank and DEG. The Market Price Risk Committee discusses KfW Group's market price and liquidity risk position and assesses the market price risk strategy on a monthly basis. The committee also decides on questions relating to the principles and methods applied for the management of market price and liquidity risks, on funding, transfer pricing and on valuation for commercial transactions. The Market Price Risk Committee is supported by the Hedge Committee and the Market Price Risk Working Group. The Hedge Committee deals primarily with the earnings effects of IFRS hedge accounting and the further development thereof. The Market Price Risk Working Group deals with methodology issues relating to market price and liquidity risks as well as measurement issues. These include matters relating to model development, validation and financial reporting measurement, in particular, taking note of validation reports and recommendations resulting from validation. A distinction is made between voting rights relating to different subject areas, with decisions on risk controlling issues made without the votes of the front and back offices.

**Non-Financial Risk Committee** 

The Non-Financial Risk Committee, which meets quarterly, supports the Executive Board in the cross-functional management and the necessary decisions and acknowledgements with respect to operational and reputational risk. The Chief Risk Officer chairs the meetings of the Non-Financial Risk Committee. In principle, all areas of the bank are represented in the committee – in selected cases based on a representation concept. Moreover, the managing director level of KfW IPEX-Bank, DEG and KfW Capital is represented on the committee. The committee discusses the risk status on the basis of findings obtained through different methods and instruments and evaluates any group-wide need for action, with the aim of adequate risk management. This includes addressing risks associated with the use of information and communication technologies ("ICT") risks pursuant to DORA. The results of the validation of the operational risk (OpRisk) model are acknowledged. The committee meeting documents, together with the minutes and the resolutions and recommendations contained therein, are submitted to the Executive Board. A distinction is made between voting rights relating to different subject areas, with decisions on risk controlling issues made without the votes of the front and back offices. The committee formed the Group Security Board ("GSB") to take up matters related to group security and business continuity management ("BCM").

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**Risk management approach of KfW Group (overview)**![LOGO](g109115dsp044.jpg)

\* The risk controlling function is performed by the Risk Controlling and the Non-Financial Risk Departments.

Management bodies and responsibilities at KfW Group Board of Supervisory Directors Risk und Credit Audit Presidial and Nomination Remuneration Committee Committee Committee Committee KfW Executive Board Strategic objectives Business strategy Risk strategy (including risk appetite) Securing KfW's promotional capacity by ensuring capital adequacy (ICAAP) and liquidity (ILAAP) Group risk management is monitoring the subsidiaries' business activities according to the "look through" principle Risk Appetite Statement Definition of risk appetite and ranges of tolerance (risk appetite dashboard) Risk committees & internal control procedures Credit Risk Committee Market Price Risk Committee Non-Financial Risk Committee Internal control system ("ICS") Direction Direction Direction internal control mechanisms front/back Internal office Risk controlling function\* Compliance function auditing Internal capital adequacy assessment process (ICAAP) Internal liquidity adequancy Ensuring economic and normative risk-bearing capacity, Stress tests assessment process (ILAAP) avoiding excessive indebtedness Model development and validation processes Model inventory Modelling guideline Methodology principles culture Risk management cycle risk Risk identification Risk measurement Managing risks & ensuring Risk reporting risk appetite compliance and 1st LoD Rule-setting 2nd LoD Credit risk Market price risk Operational risk Liquidity risk Corporate Methodology: Methodology: Methodology: Methodology: – Internal rating models – Proprietary models for – Model for determining – Proprietary models – Loan portfolio model interest, interest rate capital requirements for liquidity risks LoD Requirements to: volatility, foreign (pillar II) – Liquidity transfer – Portfolio guidelines currency and credit – Risk assessments pricing 2nd – Risk guidelines spread risks Requirements to: Requirements to:review – Voting on new business Requirements to: – Risk indicators – Limiting – Limit management – Limiting and budgeting – Loss event analyses – Scenario analyses system Investment risk – Emergency concepts/ – Early warning – Collateral management Methodology: crisis team procedure – Early warning – Central management – Emergency planning independent requirements procedure – Value-based risk of compliance risks - – Intensive monitoring measurement Requirements to: Process – Risk management process for equity investments at management operational level – Management of strategic risk equity investments Model risk Model risk management Implementing Risk concentrations Risk strategy addresses intra- and inter-risk concentrations as well as profit concentrations Environmental, social and governance risks (ESG risks) ESG risks are taken into account and integrated via the instruments of the risk management cycle. New Products Process ("NPP") / changes in operational processes or structures / mergers and acquisitions IT system landscape and data quality management

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To ensure capital and liquidity adequacy in line with the defined risk appetite, Risk Controlling supports the Executive Board in developing and implementing the group's risk strategy together with the relevant subsidiaries, KfW IPEX-Bank, DEG and KfW Capital.

The risk strategy translates the group's long-term and strategic risk objectives into operational risk management requirements. This involves defining risk management objectives for core business activities and measures for achieving targets, as well as determining KfW Group's appetite for material risks.

In order to determine its material risks, KfW Group conducts a **risk inventory** at least once a year. The risk inventory identifies and defines types of risks relevant to the group and then subjects them to a materiality evaluation. The materiality of a risk type depends on the potential material danger for KfW Group's net assets, earnings and liquidity. The key outcome of the risk inventory is an overall risk profile, which provides an overview of KfW Group's material and immaterial risk types. The 2025 inventory determined that KfW Group continues to face the following material risks: credit, market price, operational, equity investment, model and liquidity risks. In addition, the risk inventory process involves looking at the impact of ESG risks on the overall risk profile.

The Executive Board is informed about KfW Group's risk situation on a monthly basis. In addition, there is weekly reporting on market price and liquidity risks to the responsible Executive Board members. A risk report is issued quarterly to KfW Group's supervisory bodies. The respective bodies are informed on an ad hoc basis as required.

The models used for group-wide risk measurement and management, as well as for financial reporting measurement, are regularly validated and refined where necessary. These primarily include the models for measuring and managing credit, equity investment, market price, liquidity and operational risks, as well as the models for financial reporting measurement.

The risk management approach is set out in the group's procedural rules. The procedural rules stipulate the framework for the application of uniform policies and procedures to identify, measure, control and monitor risk. The rules and regulations laid out in the procedural rules are binding for the entire group and are accessible to employees through their publication on the intranet. KfW group-wide regulations are supplemented by rules specific to each business sector. See the following sections for details on other elements of KfW Group's risk management approach.

**Internal capital adequacy assessment process** 

The objective of the internal capital adequacy assessment process ("ICAAP") is to maintain sufficient capital at all times to cover the risks assumed. Capital adequacy is assessed from both a normative and an economic perspective. The two perspectives are closely interwoven and ultimately flow into a holistic and consistent risk management system that ensures achievement of the common objective of continued business operations through the bidirectional flow of information. The overarching ICAAP architecture also includes the performance of stress tests to assess the group's risk-bearing capacity under adverse conditions. The aforementioned ICAAP components are presented in the following sections.

In particular, the normative perspective of ICAAP is intended to ensure continuous compliance with the regulatory capital requirements of Pillar I in accordance with the Capital Requirements Regulation ("CRR") and the German Banking Act *(Kreditwesengesetz – "KWG")* both on an ongoing basis and in a longer-term view (normative capital planning). In addition to a base scenario, adverse scenarios (downturn and stress scenarios) are considered. In these adverse scenarios, deviations from the base scenario are determined and projected for the planning period. This procedure also takes into account the simultaneous materialisation of losses from the material risk types identified as part of the risk inventory, which may result in lower regulatory capital. This includes, in particular, risks that do not have to be explicitly backed with capital under Pillar I, such as interest risk. Furthermore, an increase in RWA is assumed along with adverse scenarios.

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The multi-year capital planning process is based on the strategic objectives defined as part of group business sector planning and is updated quarterly and ad hoc, as necessary, in terms of assumptions and market parameters. The development of the large exposure limit and the leverage ratio are monitored as further structural capital requirements. This is intended to enable early identification of any capital bottlenecks.

The economic perspective of the ICAAP serves to safeguard the economic assets of the institution in order to protect creditors from economic loss, thereby implementing Pillar 2 of the CRR. This is performed by comparing AFR as of a key date with the risk assumed as of the same date (ECAP for all material risks to capital) and monitored by the control variables of the economic coverage ratio, i.e., the quotient of AFR and ECAP. Both AFR and risk figures are stated at present value and are static (determined at a specific point in time, i.e., they do not take into account new business or periodicity). The risk figures cover all material risks to capital in accordance with the risk inventory (overall risk profile), to the extent that these can be reasonably covered by capital. The amount of economic capital required, and thus the security level of the risk-bearing capacity, is largely determined by the solvency level (99.90%) selected for risk measurement. There is no regular forecast of economic risk-bearing capacity, although an indicative forecast of economic risk-bearing capacity may be produced if necessary, if future developments which may have a material impact on risk-bearing capacity are identified through a list of questions.

Similar to the normative perspective, the economic perspective of the ICAAP also includes regularly performed stress tests in the form of simulations of adverse economic conditions (downturn and stress scenario).

A traffic light system set up in the context of the key date or base scenario and the adverse scenarios with thresholds for the key indicators relating to normative and economic risk-bearing capacity indicates a need for action as part of operational and strategic management in the event of critical developments.

The ICAAP is subject to an annual review of its adequacy. The results of this review are taken into account in the assessment of risk-bearing capacity.

As of 31 December 2025, risk-bearing capacity is stated in terms of both the normative and the economic perspective:

***Normative risk-bearing capacity***

**Key regulatory figures** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
| Total risk exposure in accordance with Art. 92 CRR |  | 140269 |  | 126183 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *– Credit and equity investment risk* | | *129225* | | *118402* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *– Market price risk* | | *2448* | | *1848* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *– Operational risk* | | *8597* | | *5933* | |
| Regulatory capital |  | 38888 |  | 38189 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *– (Common equity) tier 1 capital* | | *38888* | | *38104* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *– Additional tier 1 capital* | | *0* | | *0* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *– Tier 2 capital* | | *0* | | *86* | |
| CET1 ratio |  | 27.7% |  | 30.2% |  |
| Tier 1 capital ratio |  | 27.7% |  | 30.2% |  |
| Total capital ratio |  | 27.7% |  | 30.3% |  |

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Within credit risk, capital requirements for counterparty default risks are calculated primarily using the internal ratings-based approach ("IRBA"). Following the transition to CRR III in Q1 2025, KfW calculates significant parts of its total risk exposure based on an advanced IRBA (F-IRBA).

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The sharp decline of around 2.5 percentage points in the total capital ratio to 27.7% is attributable to the year-on-year increase in the total risk exposure amount. However, at 27.7%, the total capital ratio at year-end 2025 remained above the overall capital requirement ("OCR").

**Minimum requirements for total capital ratios** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |  |
| **Total SREP capital requirements (TSCR)** |  | **10.50%** |  | **11.50%** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Capital conservation buffer* | | *2.50%* | | *2.50%* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Countercyclical capital buffer* | | *0.65%* | | *0.61%* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Other systemic buffer* | | *1.00%* | | *1.00%* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Systemic risk buffer* | | *0.02%* | | *0.02%* | |
| **Overall capital requirement (OCR)** |  | **14.67%** |  | **15.64%** |  |

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The reduction in the total SREP capital requirements ("TSCR") by 1.0 percentage points is due to the supervisory decision update on the SREP surcharge.

***Economic risk-bearing capacity***

To assess its economic risk-bearing capacity, KfW Group compares its ECAP for potential losses from material quantifiable risks to capital with its available financial resources calculated at present value. The basis of **AFR** is KfW Group's equity adjusted for present value differences, the risk provisions for non-value-adjusted business, future cash flows from margins and costs for administration and expected portfolio business defaults, as well as some capital deduction items for a prudent economic valuation. The determination of the present value required for this purpose is generally based on risk-free yield curves for both sides of the statement of financial position; expected liquidity costs not yet covered by funding operations are taken into account by means of an additional deductible item. KfW Group bases its calculation of the ECAP on a one-year time frame.

**Credit risk** is the risk of a negative impact on net assets, earnings position or liquidity if business partners or borrowers fail to meet their payment obligations to KfW Group at all, in due time or in full (default) or if their credit ratings deteriorate (migration), causing the expected defaults to increase. Counterparty risk including credit valuation adjustment risk ("CVA") risk in relation to derivative exposures is included under Credit risk. CVA risk is reported as part of the combined "counterparty risk (including CVA risk)" sub-risk type. The ECAP for credit risk is quantified by the Risk Controlling department, largely with the help of statistical models. A value-based measurement of credit risks is carried out using a loan portfolio model and credit value-at-risk ("VaR") as a risk measure. The ECAP for CVA risk is based on the CVA charge of Pillar I, which is adjusted for economically relevant aspects (including consideration of other risk-relevant items and the use of internal ratings).

Like credit risk, **equity investment** risk is also subject to value-based measurement using a loan portfolio model and credit value-at-risk as a risk measure.

The ECAP for **market price risk** is calculated on the basis of the VaR concept. Pillar II's economic analysis takes account of interest risk of the banking book (consisting of the jointly analysed sub-risk types: interest risk, as well as tenor and cross-currency basis spread risks), foreign currency risk, credit spread risk for securities and interest rate volatility risk. The possible loss of present value or price is determined for each type of market price risk using VaR based on historical simulation. Ultimately, the ECAP is determined by total VaR, which takes into account breakdown effects<sup>2</sup><sup>)</sup> between the various subtypes of market price risk.

<sup>2)</sup> The breakdown effect essentially contains the diversification between the ECAP requirements of the risk subtypes and the total ECAP requirement. 

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The ECAP for **operational risk** is calculated using an internal statistical model, which was derived from regulatory requirements for advanced measurement approaches. It takes a risk-sensitive approach to internal and external event data and risk scenarios. The capital requirement is calculated at group level, taking into account diversification effects, and then allocated to the business sectors and risk subtypes. Moreover, the measurement of the quality of operational risk management within the group can generate premiums that are then applied to the capital requirement.

In addition, a **model risk buffer** is applied to cover model weaknesses and foreseeable methodological changes in economic risk-bearing capacity, reviewed and adjusted quarterly and as necessary.

Using this method, the economic risk-bearing capacity as of 31 December 2025 satisfied a confidence level of 99.90%. The excess coverage of the available financial resources beyond the total capital requirement as of 31 December 2025 (EUR 27,247 million) increased compared to the previous year's figure (EUR 19,388 million). This is due in part to the reduction in ECAP, which is primarily attributable to a lower credit risk as a result of refinements in methodology. The increase in available financial resources due to the profit for the year and refinements in methodology is an additional factor.

**Economic risk-bearing capacity as of 31 December 2025** 

EUR in millions

![LOGO](g109115dsp48aa.jpg)

In brackets: figures as of 31 December 2024

Each risk identification model represents a simplification of a complex reality and builds on the assumption that risk parameters observed in the past can be considered representative of the future. Not all possible inputs and their complex interactions can be identified and modelled for the risk development of a portfolio. This factor is addressed by including safety margins in the design of the model, and a supplementary model risk buffer in the calculation of economic risk-bearing capacity. This is one reason why KfW Group carries out stress tests with both credit risk models and market price risk models. The group continuously develops its risk models and processes in line with current banking regulations.

***Stress and scenario calculations***

To ensure the early indicator function and proactive focus of the ICAAP, the group monitors different adverse economic scenarios and their effects on economic and normative risk-bearing capacity on a quarterly basis. The results of these scenarios demonstrate the group's resilience and ability to act should one of them occur.

The baseline scenario for normative risk-bearing capacity includes projected business performance, expected consolidated comprehensive income, and other effects influencing risk-bearing capacity, such as foreseeable changes in the capital structure and methodological developments in risk measurement. It also takes into account the impact of expected economic developments on the earnings position and risk situation.

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The downturn and stress scenarios for normative and economic risk-bearing capacity simulate adverse effects on earnings or AFR and changes in capital requirements of varying severity extending beyond the developments already expected as of the key date or in the baseline scenario. While the downturn scenario assumes a slight deterioration in economic conditions, the stress scenario simulates a prolonged, severe global recession. In both scenarios, KfW assumes an increase in credit and equity investment risks and losses. In these scenarios, the EUR and USD interest rates as well as the EUR-USD exchange rate are forecast to develop adversely in line with the economic situation. At the same time, it is assumed that increasing market uncertainties will lead to greater volatility in interest rates, currencies and credit spreads, which in terms of economic risk-bearing capacity may result in a rise in the ECAP for the corresponding types of risk. Losses from operational risk further reduce available capital.

The scenarios are based on standardised global economic forecasts updated on a quarterly basis. In 2025, the effects of intensified trade disputes and geopolitical tension and of weak economic growth in Germany were taken into account in KfW's regular stress calculations as key factors for the group's economic environment. The scenarios result in particular in deteriorations in credit quality for KfW's debtors and thus to increasing risk provisions and high capital requirements for the affected portfolio segments.

In addition to the regularly performed adverse scenarios, selected scenario stress tests were carried out in 2025 in light of the current geopolitical, climate policy and macroeconomic situation. The Executive Board selected the effects of a crisis of confidence in the banking sector, trade barriers due to protectionism and geopolitical fragmentation, and a debt crisis in developing countries and emerging economies, for the quarterly scenario stress tests on structural risks to KfW Group. The ad hoc scenario stress tests in 2025 focused on a possible sovereign debt crisis in western Europe and a geopolitical crisis in the Baltic region.

The stress testing methods for ESG risks were also further expanded in 2025. This expansion involved calculating a scenario on potential financial losses due to wildfire events to measure physical and transition climate risks in the portfolio, and preparing a scenario on the impact of rising carbon and energy prices (to be performed in the first quarter of 2026). In addition, a quarterly credit risk stress test is performed for the simultaneous assessment of physical and transition climate and environmental risks in the portfolio.

Besides the regularly simulated adverse scenarios and the different scenario stress tests, further stress tests, in particular risk type-specific stress tests and various sensitivity analyses, are also regularly carried out, taking concentration risks into account, to analyse the resilience of KfW's economic and normative risk-bearing capacity. In addition, the concentration and inverse stress tests are intended to determine the limits of KfW's risk-bearing capacity.

The results of the various stress and scenario calculations were presented to decision makers at KfW in a separate digital stress test report.

The group met the economic risk-bearing capacity requirements, including the confidence level of 99.90% in the scenarios analysed, as of all quarterly calculation dates in 2025. The regulatory capital ratios and the leverage ratio exceeded the threshold values defined for risk appetite at all times.

KfW's stress testing programme is subject to an annual adequacy assessment, the aim being to further enhance the stress tests and scenario calculations as a component of overall bank management in order to meet internal and regulatory requirements.

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**Types of risk** 

**Credit risk** 

KfW Group is subject to credit risk in the context of its promotional mandate. Credit risk includes, in particular, counterparty default risk (including migration risk), as well as counterparty risk, including CVA risk.

The majority of final borrower default risks are borne by the on-lending institutions in the domestic promotional lending business. Due to the business model, this results in a large proportion of bank risks in the portfolio. Other main risks result from promotional activities in the area of start-up finance for small and medium-sized enterprises (SMEs). Particularly in these segments of domestic promotion, KfW Group bears the risk stemming from final borrowers. In addition, KfW Group faces risks in the business sectors Export and project finance as well as Promotion of developing countries and emerging economies.

![LOGO](g109115dsp50a.jpg)

Counterparty default risk<sup>3)</sup> is measured by estimating the probability of default ("PD"), the exposure at default ("EAD") and the loss given default ("LGD"). The product of these three variables is the loss that can be expected, statistically, on average over many years.

KfW Group uses internal rating procedures to determine the probability of default for banks, countries, corporates, SMEs and start-ups. These procedures are based on scorecards<sup>4)</sup> and generally follow a uniform model architecture consisting of a machine rating, a checklist, a group logic and a manual override. Simulation and cash flow-based rating procedures are used for significant parts of special financing and structured products, some of which were licensed from an external provider. For structured products, tranche ratings are determined on the basis of the default pattern of the asset pool and the waterfall structure of the transactions. The existing small-ticket retail positions (e.g., in the area of education financing) are valued using an automated procedure set up specifically for this purpose. The rating procedures aim to predict the probability of default on a one-year basis. As a rule, the middle and back-office departments are responsible for preparing ratings for risk-bearing business. Ratings for these exposures are updated regularly, at least once per year. There are exceptions for loans below a threshold of EUR 10 million from the KfW special programmes in the context of the pandemic and the Russian war on Ukraine.

<sup>3)</sup> Also includes counterparty risk

<sup>4)</sup> A scorecard is a mathematical and statistical model and/or an expert knowledge-based model. The individual risk factors considered relevant for credit rating are converted into a score depending on their prevalence or value and weighted for aggregation.

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Mapping the probability of default on a uniform master scale for the entire KfW Group facilitates a comparison of ratings from different rating procedures and business sectors. The master scale generally consists of 20 distinct classes which are divided into four groups: investment grade, non-investment grade, watch list and default. The range of default probabilities and the average default probability are defined for each class of the master scale. There are operating procedures specifying the responsibilities, competencies and control mechanisms associated with each rating procedure. External ratings are mapped to KfW Group's master scale to ensure the comparability of internal ratings with ratings of external rating agencies. The rating procedures are validated and further developed at regular intervals.

EAD and valuation of collateral influence the severity of loss. Collateral has a risk-mitigating effect in calculating LGD. In valuing acceptable collateral, the expected net revenue from collateral realisation in the case of loss is determined. Assignments made serve to reduce risk in the valuation of financing partners in the on-lending business. This takes into account the BRRD resolution mechanism, in accordance with which the secured liabilities of institutions under resolution are not to be included in the bail-in cascade. For tangible collateral, further haircuts are applied for expected changes in value, as well as devaluation resulting from depreciation. Depending on the availability of data, the various valuation procedures for individual types of collateral are based on internal and external historical data and on expert estimates. In the case of personal collateral, the collateralised portion is treated as a direct transaction with the collateral provider, i.e., the probability of default and the extent of the collateral provider's uncollateralised loss are applied. A risk principle for loan collateral regulates uniform management, valuation and recognition of collateral across KfW Group. In addition to net revenue from collateral realisation, the recovery rate for uncollateralised exposure amounts is also an important component in determining LGD. The collateral valuation procedure and the procedure for estimating the EAD and LGD are also subject to validation and further developed as needed, with new regulatory requirements also addressed.

Counterparty risks (including CVA risk)<sup>5)</sup> arise for KfW in connection with derivative transactions when hedging interest and currency risks. Derivative transactions involve the risk of changes in value (counterparty risks including CVA risk), which can be caused by a change in the credit quality of the counterparty (credit risk including default risk), a change in the absolute price of the derivative (market price risk) or a combination of the two.

KfW Group has limit management systems, risk guidelines and various portfolio guidelines to limit risks from new business. This suite of risk management instruments forms the basis for the second vote on lending transactions, serves as an orientation guide for loan approvals and has the function of ensuring the appropriate quality and risk structure of KfW Group's portfolio while taking into account the special nature of KfW Group's promotional business. At KfW, Group Risk Management casts the second vote at single exposure level. KfW IPEX-Bank, KfW Capital and DEG each issue their own second vote independent of the front office. The relevant lending decision-making processes are structured with a view to risk. Lending transactions require a second vote depending on the type, scope of the risk content and complexity of the transaction. The qualification levels for approval of new business depend on rating, collateralisation or net exposure and total commitments to the group of connected customers. Approval of the responsible supervisory body is also required for individual transactions from pre-defined thresholds.

The portfolio guidelines distinguish between different types of counterparties and product variants and define the conditions under which business transactions may be conducted. In addition, risk guidelines for countries, sectors and products are defined in order to react to existing or potential negative developments with specific requirements for lending. The limit management systems ultimately track both credit rating-dependent individual counterparty risk (counterparty limits) and risk concentrations (concentration limits). Counterparty limits serve to fine-tune the counterparty-specific management of credit default risk. Concentration limits serve to restrict risk concentrations in the loan portfolio and thus to prevent major individual losses. Due to KfW's business model, there is a significant concentration in credit risks, as well as in the financial sector.

<sup>5)</sup> See section on "Economic risk-bearing capacity" for measurement of the ECAP for credit risks.

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Existing higher-risk exposures are divided into a watch list and a list for non-performing loans. The watch list serves to identify potential problem loans early. This watch-list process involves regularly reviewing and documenting the economic situation, the particular borrower's market environment and the collateral provided, and formulating and deciding proposals for remedial action as needed – particularly proposals for risk-limiting measures. Operational responsibility for non-performing loans, and also to a large extent for watch-list exposures<sup>6)</sup>, lies with restructuring units, to ensure involvement of specialists, intensive support and professional management of problematic loans. The objective of this system is to achieve recovery of a loan through restructuring, reorganisation and workout arrangements. If the business partner is deemed incapable of or unsuitable for restructuring, the priority becomes optimum realisation of the asset and the related collateral. The Restructuring division is responsible for non-performing loans in the KfW portfolio and for providing intensive support to banks and higher volume loans with a risk amount greater than EUR 1 million. The Operations department is responsible for supporting retail business. Rules with differing details apply for the special programmes for coronavirus aid, which are fully backed by a federal guarantee. KfW IPEX-Bank's non-performing loans and exposures under intensive support, including KfW and DEG's trust activities, are managed directly by each subsidiary. Internal interface regulations are in place in the relevant business sectors to ensure control of responsibilities and allocation. Restructuring also cooperates with the front-office departments and the central Legal Affairs department.

In the event of a crisis in the banking sector, KfW must be able to act without delay both in-house and externally. A crisis plan for banks is in place for this purpose. It primarily provides for the establishment of a dedicated working group under the direction of the Credit Risk Management department and immediate loss analysis so that the necessary next steps can be implemented quickly.

**Information on default risk and default risk concentrations (gross carrying amounts)** 

**as of 31 December 2025 – amortised cost** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Loans and advances**<br>**to banks** | **Loans and advances**<br>**to banks** | **Loans and advances**<br>**to banks** | **Loans and advances**<br>**to customers** | **Loans and advances**<br>**to customers** | **Loans and advances**<br>**to customers** |
|  |  | **Stage 1** | **Stage 2** | **Stage 3** | **Stage 1** | **Stage 2** | **Stage 3** |
|  |  | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions**  |
| Investment grade | M1–M4 rating | 266391 | 0 | 0 | 48856 | 46 | 0 |
|  | M5–M8 rating | 55060 | 0 | 0 | 44324 | 100 | 0 |
| Non-investment grade | M9–M15 rating | 11158 | 17 | 0 | 36735 | 1405 | 0 |
| Watch list | M16–M18 rating | 1018 | 1029 | 0 | 1587 | 3106 | 0 |
| Default | M19–M20 rating | 0 | 0 | 1067 | 0 | 0 | 3964 |
| **Total** |  | **333627** | **1047** | **1067** | **131502** | **4657** | **3964** |

---

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Securities and investments** | **Securities and investments** | **Securities and investments** | **Off-balance sheet transactions** | **Off-balance sheet transactions** | **Off-balance sheet transactions** |
|  |  | **Stage 1** | **Stage 2** | **Stage 3** | **Stage 1** | **Stage 2** | **Stage 3** |
|  |  | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions**  |
| Investment grade | M1–M4 rating | &nbsp;&nbsp;&nbsp;&nbsp;30811 | 0 | 0 | 89299 | 0 | 0 |
|  | M5–M8 rating | 6508 | 0 | 0 | 29350 | 26 | 0 |
| Non-investment grade | M9–M15 rating | 405 | 0 | 0 | 18670 | 520 | 0 |
| Watch list | M16–M18 rating | 0 | &nbsp;&nbsp;&nbsp;&nbsp;22 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0 | 531 | 1158 | 0 |
| Default | M19–M20 rating | 0 | 0 | 0 | 0 | 0 | &nbsp;&nbsp;&nbsp;&nbsp;382 |
| **Total** |  | **37724** | **22** | **0** | **137850** | **1704** | **382** |

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<sup>6)</sup> The assumption of responsibility for watch-list cases at KfW IPEX-Bank is decided on a case-by-case basis by Risk Management in consultation with the unit responsible for restructuring.

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**Information on default risk and default risk concentrations (gross carrying amounts)** 

**as of 31 December 2024 – amortised cost** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Loans and advances**<br>**to banks** | **Loans and advances**<br>**to banks** | **Loans and advances**<br>**to banks** | **Loans and advances**<br>**to customers** | **Loans and advances**<br>**to customers** | **Loans and advances**<br>**to customers** |
|  |  | **Stage 1** | **Stage 2** | **Stage 3** | **Stage 1** | **Stage 2** | **Stage 3** |
|  |  | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions**  |
| Investment grade | M1–M4 rating | 245839 | 0 | 0 | 48896 | 80 | 0 |
|  | M5–M8 rating | 55777 | 0 | 0 | 45627 | 0 | 0 |
| Non-investment grade | M9–M15 rating | 13968 | 11 | 0 | 40194 | 1009 | 0 |
| Watch list | M16–M18 rating | 2524 | 1212 | 0 | 3349 | 2626 | 0 |
| Default | M19–M20 rating | 0 | 0 | 1196 | 0 | 0 | 4193 |
| **Total** |  | **318108** | **1223** | **1196** | **138066** | **3714** | **4193** |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Securities and investments** | **Securities and investments** | **Securities and investments** | **Off-balance sheet transactions** | **Off-balance sheet transactions** | **Off-balance sheet transactions** |
|  |  | **Stage 1** | **Stage 2** | **Stage 3** | **Stage 1** | **Stage 2** | **Stage 3** |
|  |  | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions**  |
| Investment grade | M1–M4 rating | 31195 | 83 | 0 | 83260 | 59 | 0 |
|  | M5–M8 rating | 6341 | 0 | 0 | 36776 | 0 | 0 |
| Non-investment grade | M9–M15 rating | 347 | 0 | 0 | 19777 | 260 | 0 |
| Watch list | M16–M18 rating | 24 | 0 | 0 | 663 | 1003 | 0 |
| Default | M19–M20 rating | 0 | 0 | 0 | 0 | 0 | 283 |
| **Total** |  | **37907** | **83** | **0** | **140475** | **1322** | **283** |

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**Credit risks and related credit protection of financial instruments** 

**measured at amortised cost as of 31 December 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | | **Risk mitigation** | **Risk mitigation** |
|  | | | **from collateral** | **from collateral** |
|  | | **Maximum risk**<br>**of default**<br>**stage 3** | **stage 3** | **stage 3** |
|  | | | **tangible** | **personal** |
|  | **Maximum risk**<br>**of default<sup>1)</sup>**<br><br> **EUR in millions** | <br> **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Loans and advances to banks | 335625 | 1013 | 0 | 949 |
| Loans and advances to customers | 138351 | 2629 | 45 | 1809 |
| Securities and investments | 37734 | 0 | 0 | 0 |
| Off-balance sheet transactions | 139858 | 346 | 0 | 25 |
| **Total** | **651568** | **3988** | **45** | **2783** |

---

<sup>1)</sup> Net carrying amount, excluding collateral and other credit enhancements 

**Credit risks and related credit protection of financial instruments** 

**measured at amortised cost as of 31 December 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | | **Risk mitigation** | **Risk mitigation** |
|  | | | **from collateral** | **from collateral** |
|  | | **Maximum risk**<br>**of default**<br>**stage 3** | **stage 3** | **stage 3** |
|  | | | **tangible** | **personal** |
|  | **Maximum risk**<br>**of default<sup>1)</sup>**<br><br> **EUR in millions** | <br> **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Loans and advances to banks | 320406 | 1144 | 9 | 1106 |
| Loans and advances to customers | 144278 | 2917 | 54 | 2297 |
| Securities and investments | 37982 | 0 | 0 | 0 |
| Off-balance sheet transactions | 142006 | 235 | 0 | 26 |
| **Total** | **644672** | **4297** | **62** | **3428** |

---

<sup>1)</sup> Net carrying amount, excluding collateral and other credit enhancements 

A large part of the personal collateral of the financial instruments classified as stage 3 comprises federal guarantees and credit insurance. Tangible collateral for financial instruments classified as stage 3 primarily consists of aircraft mortgages.

As a rule, the collateral for financial instruments measured at fair value relates almost entirely to the collateral for financial derivatives.

There were no significant changes to the quality/collateralisation policy and no financial instruments for which no impairments were recognised at all due to tangible collateral.

KfW Group did not take possession of any assets held as collateral nor had any assets held as collateral been taken possession of in 2025.

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**Portfolio structure** 

The interaction of the risks associated with the individual exposures in KfW Group's loan portfolio<sup>7)</sup> is assessed based on an internal portfolio model. Concentrations of individual borrowers or groups of borrowers give rise to a risk of major losses that could jeopardise KfW Group's existence. On the basis of the economic capital concept, the Risk Controlling department measures risk concentrations by individual borrower, sector and country. Risk concentrations are primarily reflected in the ECAP. The results of these measurements form the main basis for managing the loan portfolio.

**ECAP by region** 

31 December 2025 (31 Dec. 2024)

![LOGO](g109115dsp55a.jpg)

***Regions***

As of 31 December 2025, 56% of KfW Group's loan portfolio in terms of ECAP was attributable to the euro area, including Germany (31 Dec. 2024: 70%). The revision of the risk model for collateralised on-lending business described in the "Current developments" section resulted in a significant decline in the ECAP in Germany and thus in the overall portfolio. This in turn caused the relative share of other regions in the portfolio to rise. This effect was exacerbated in the euro area (excluding Germany) by the expansion of the liquidity portfolio.

**ECAP by sector** 

31 December 2025 (31 Dec. 2024)

![LOGO](g109115dsp55b.jpg)

***Sectors***

The significant share of the total capital requirement for credit risk attributable to banks is due to KfW Group's promotional mandate. By far the greatest portion of KfW Group's domestic promotional business consists of loans on-lent through commercial banks. This concentration was significantly reduced through the aforementioned revision of the risk model. As a result, the banks' share of ECAP declined to 38% overall (31 Dec. 2024: 60%).

Note: Prior year figures for utilities (5% to 6%) and non-essential consumer goods (6% to 5%) have been corrected.

<sup>7)</sup> The loan portfolio includes loans as well as securities and investments in performing business. The non-performing portfolio is only included in the presentation of credit quality.

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**Credit quality by net exposure** 

31 December 2025 (31 Dec. 2024)

![LOGO](g109115dsp56a.jpg)

***Credit quality***

As credit quality is a major factor influencing ECAP, analysing credit quality structure involves examining the distribution of net exposure<sup>8)</sup> by credit quality category. The aforementioned revision of the risk model resulted in a significant reduction in investment grade net exposure, and thus in total net exposure. This caused an increase in the share of the other rating classes in the credit rating distribution even though no substantive developments could be identified.

***Overview of ESG credit risks***

The ESG risk assessment of the group's loan portfolio is very stable year on year and shows that the majority of the KfW portfolio has low or moderate E, S and G risks. Financial institutions with a low risk rating for environmental and governance account for a large proportion of the volume assessed. In the social risk ratings, the financial institutions achieved a moderate risk rating overall based on assessments corresponding to data security and protection of customer privacy.

**Average E, S and G scores with scale values**

**Share of assessed net exposure as of 31 December 2025**![LOGO](g109115dsp56b.jpg)

<sup>8)</sup> Net exposure is the economic loss that could potentially occur in the event of an economic or political default event.

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**Average E, S and G scores with scale values**

**Share of assessed net exposure as of 31 December 2024**![LOGO](g109115dsp57.jpg)

Net exposure weighted score distribution based on the KfW Group portfolio use of the ESG risk profile resulted in a very high coverage rate overall with few justified exceptions (primarily private households).

***Securities-based securitisations in KfW Group's portfolio***

Securitisations had a par value of around EUR 7.3 billion as of 31 December 2025. Accounting for the mark-to-market valuation of the securities reported at fair value and impairments, the portfolio had a book value (including pro rata interest) of around EUR 7.3 billion. The following tables present the composition of the securitisation portfolio by asset class, rating grade and geographical distribution.

**Geographical breakdown of the underlying asset pool (based on par value)** 

---

| | | |
|:---|:---|:---|
|  | <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**31 Dec. 2025** | **31 Dec. 2024** |
|  | **%** | **%** |
| Germany | 56.5 | 55.9 |
| Western/Central Europe | 33.0 | 42.5 |
| Southern Europe | 7.8 | 0.3 |
| Northern Europe | 2.7 | 1.3 |

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**Exposure based on par values** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | **Other**<br>**securitisa-**<br>**tions** | <br> **Total as of**<br>**31 Dec.**<br>**2025** | **Total as of**<br>**31 Dec.**<br>**2024** |
|  | **ABCP**<br><br>**EUR in**<br>**millions** | **Auto-ABS<sup>1)</sup>**<br><br>**EUR in**<br>**millions** | **RMBS**<br><br>**EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** |
| Investment grade | 3595 | 2991 | 391 | 342 | 7319 | 6790 |
| Non-investment grade | 0 | 0 | 0 | 0 | 0 | 0 |
| Watch list | 0 | 0 | 0 | 0 | 0 | 0 |
| Default | 0 | 0 | 0 | 7 | 7 | 7 |
|  | **3595** | **2991** | **391** | **349** | **7326** | **6797** |

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<sup>1)</sup> Auto ABS are based on receivables from automotive financing agreements.

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The portfolio volume increased compared to the volume of 31 December 2024 (by a nominal value around EUR 0.5 billion). This increase related solely to the investment grade portfolio. In terms of the geographical breakdown of the underlying asset pool, the entire portfolio remains fully attributable to Europe, with Germany accounting for the lion's share.

**Equity investment risk** 

In managing group equity investment risks, the group differentiates between risks from equity investments at operational level and strategic equity investments:

***Equity investments (operational level)***

Undertaking equity investments at an operational level is part of the group's promotional mandate. Accordingly, equity investments are made in connection with domestic and European investment financing and in the business sectors KfW Development Bank, DEG and Export and project finance, and KfW Capital. KfW's group-wide basic rules for equity investments at an operational level are set out in general guidelines. Specific rules tailored to certain segments of equity investments are also set out in portfolio guidelines or working instructions. Risks are measured at individual loan commitment level for operational equity investments using rating procedures specified for this purpose, which are allocated to the respective rating objects in accordance with the procedural rules. Equity investment portfolio risks are monitored monthly in the group risk report.

***Strategic equity investments***

Strategic equity investments support KfW's mandate of providing an efficient and sustainable promotional offering. In addition to reinforcing and expanding core competencies, the focus of this investment type is on complementing KfW's business sector (Article 2 (3) of the KfW Law [related transactions]). Strategic equity investments normally have a long-term holding period. KfW also makes strategic equity investments in accordance with Article 2 (4) of the KfW Law (mandated transactions). The Federal Government mandates such equity investments to KfW on a case by case basis because the Federal Republic of Germany has a state interest in them.

Dedicated organisational units are responsible for strategic equity investments based on an equity investment manual that describes legal bases, strategies, principles, procedures and responsibilities of equity investment management. Acquisitions and disposals of, and changes to, strategic equity investments are subject to defined processes as well as authorisation by the Executive Board and, in the cases covered under the KfW Bylaws, authorisation by the Board of Supervisory Directors. Moreover, KfW's acquisition of a strategic equity investment in excess of 25%, creating or increasing such an equity investment or fully disposing of it requires authorisation by the Federal Ministry of Finance in accordance with Section 65 (3) of the Federal Budget Code *(Bundeshaushaltsordnung)*. The strategic equity investments and their individual risks are monitored. Reports on the strategic equity investments are prepared on a quarterly basis and, if necessary, on an ad hoc basis and are addressed to the Executive Board by the General Secretariat. The equity investment strategies to be tailored individually and in line with the business strategy address, among other things, the grounds for each investment in accordance with promotional policy; the commercial impact; the holding period and exit strategies. Equity investment strategies are updated on an annual basis. Moreover, the group is normally represented in the supervisory bodies of its strategic equity investments. Mandated transactions, that is, those executed in the interest of, on the instruction of and at the risk of the Federal Government may deviate from these provisions. Information is provided on the group's strategic equity investments at least once a quarter in the risk report.

As of 31 December 2025, the group's equity investment portfolio consisted of fund investments of KfW Capital with an ECAP of EUR 282 million (31 Dec. 2024: EUR 344 million), equity investments of DEG including promotional business with an ECAP of EUR 652 million (31 Dec. 2024: EUR 802 million), and other promotional business (ECAP: EUR 483 million; 31 Dec. 2024: EUR 553 million).

The EUR 283 million decrease in the capital requirement compared to the previous year is due primarily to an adjusted valuation method.

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**Market price risk** 

KfW Group primarily measures and manages market price risk on a present-value basis. The drivers of market price risk are interest risk (consisting of the jointly analysed risk subtypes interest risk, tenor and cross-currency basis spread risk), interest rate volatility risk, foreign currency risk and sector-specific spreads for positions with credit spread risk.

Market price risk within the group required a total of EUR 6.48 billion in economic capital as of 31 December 2025. This is EUR 0.22 billion more than the previous year. The expansion of the strategic interest rate risk position along with volatile markets (particularly in credit spread risk) have increased market price risk overall. Credit spread risk also rose due to an adjusted valuation method (exclusion of credit spreads in the measurement of pension provisions). The change in reference curve from the 6M EURIBOR to the ESTR swap curve caused a year-on-year increase in tenor basis spread risk in interest risk.

**Economic capital requirement for market price risk** 

---

| | | |
|:---|:---|:---|
| | **31 Dec. 2025** | **31 Dec. 2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>Interest risk | **6328** | **6147** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest risk | 6495 | 6078 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tenor basis spread risk | 961 | 403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency basis spread risk | 397 | 520 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Breakdown effect | –1525 | –855 |
| Interest rate volatility risk | 65 | 162 |
| Foreign currency risk | 596 | 703 |
| Credit spread risk | 876 | 731 |
| Breakdown effect | –1387 | –1488 |
| **Market price risk** | **6477** | **6255** |

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***Value-at-risk approach***

The ECAP for the market price risk is calculated based on the VaR model of the historical simulation. The risk is calculated taking account of diversification effects between the risk subtypes. The possible loss of present value is determined based on the historical simulation. The model consists of two components – a reactive short-term and a conservative long-term component. The reactive component is based on a historical simulation over a one-year market data history (250 scenarios) and thus in particular reflects current market events. The conservative component is based on a historical simulation over a five-year period selected from a long-term history, which includes stress periods and thus incorporates a long-term perspective.

The ECAP for market price risk and risk subtypes is calculated from the maximum of the two components, based on a holding period of one year and a confidence level of 99.9%.

VaR indicators are determined for each of the following subtypes of market price risk: interest risk (further broken down into the risk of changes in the interest rate, tenor and cross-currency basis spread risks), foreign currency risk, interest rate volatility risk and credit spread risk. The total VaR is also calculated, taking account of breakdown effects between the aforementioned risk subtypes. The total VaR, interest risk, interest rate volatility risk, credit spread risk and foreign currency risk are limited.

***Interest risk***

Yield curve grid points serve as the basis for historical simulation to quantify interest risks. These implicitly include interest risk as well as tenor and cross-currency basis spread risks. By contrast, interest rate volatility and credit spread risks are not included in interest risk, but are modelled separately and reported using their own key VaR indicators. The capital requirement for interest risk increased by EUR 181 million to EUR 6,328 million as of 31 December 2025.

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***Interest rate volatility risk***

Implied volatilities are used as risk factors to determine the interest rate volatility risk. These are applied in modelling interest rate options (e.g., floors in the variable-rate lending business). The ECAP for these risks is calculated in the same way as for other sub-types of risk, using historical simulation; see above, "Value-at-risk approach". The ECAP requirement for interest rate volatility risk is not permitted to exceed the present value of the corresponding interest rate options held by KfW. The capital requirement for interest rate volatility risk was EUR 65 million as of 31 December 2025.

***Foreign currency risk***

The ECAP for foreign currency positions is also calculated using historical simulation. The capital requirement for foreign currency risk stood at EUR 596 million as of 31 December 2025.

***Credit spread risk***

This risk is mainly determined by the securities portfolio. The ECAP requirement for this risk type is calculated in the same way as for other risk types, using historical simulation. The ECAP requirement for credit spread risk as of 31 December 2025 was EUR 876 million. Credit spread risk rose by EUR 145 million year on year due to the exclusion of credit spreads in the present value measurement of pension provisions.

***Stress testing***

In addition to the calculation of the ECAP requirement based on the VaR model of historical simulation, the effects of extreme market situations on the present value and VaR target variables are determined by means of stress tests.

***Market price risks IRRBB and CSRBB with regard to earnings***

In addition to present-value measurement of market price risk, interest rate-induced risks are measured with regard to the bank's periodic earnings. The earnings-oriented interest risk (IRRBB) comprises market interest rate-induced fluctuations in net interest income, referred to as delta net interest income ("delta NII"). The delta NII is influenced by the strategic interest rate risk position and effects in the variable banking book (interest book). Measurement and monitoring is based on a dynamic simulation model with the change between the planned base case and the scenarios specified by the European Banking Authority calculated as the delta NII. The interest risk also manifests itself in market interest rate-induced fluctuations in the measurement of pension provisions, referred to as delta other comprehensive income ("delta OCI"), which is recognised directly in equity. As of 31 December 2025, the worst-case scenario was EUR –243 million in delta NII and EUR –617 million in delta OCI.

The earnings-oriented credit spread risk (CSRBB) monitors existing or future risk to earnings arising from unfavourable credit spread movements in two components: the funding cost risk from changes in KfW's own credit spread as delta NII, and the credit spread risk from the remeasurement of pension provisions as delta OCI, which is not recognised in the income statement. As of 31 December 2025, the worst-case scenario was EUR –420 million in delta NII and EUR –271 million in delta OCI.

**Liquidity risk** 

Liquidity risk in the narrower sense (synonymous with insolvency risk) is the risk of a lack of liquidity on the part of an institution or market. The liquidity gap creates the risk that payment obligations cannot be met, cannot be met on time or cannot be met in full.

The primary objective of liquidity management is to ensure that KfW Group is capable of meeting its payment obligations at all times. KfW is available as a contractual partner for all commercial transactions of its subsidiaries, particularly for their funding. For this reason, the liquidity requirements of the subsidiaries are included both in KfW Group's funding plans and in the liquidity maintenance strategy.

Liquidity risk is measured on the basis of economic scenario analyses. Moreover, maximum liquidity gap limits (outflows on a monthly and yearly basis) and the difference between the average residual maturity of inflows and outflows (maturity gap) are monitored. On the basis of the KfW Law, KfW's liquidity risks are limited by the utilisation threshold in accordance with Article 4 of the KfW Law. The utilisation threshold compares current and non-current liabilities and must not exceed 10%. Internal indicators relating to the liquidity situation are based on excess EUR coverage in stress scenarios of differing severity. No capital is currently allocated as part of calculating risk-bearing capacity.

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**Internal liquidity adequacy assessment process** 

The internal liquidity adequacy assessment process ("ILAAP") principle describes the management and monitoring of KfW Group's liquidity risk position. The procedure established by the institution serves to identify, measure, manage and monitor liquidity. The aim of the ILAAP is to ensure liquidity and avoid liquidity bottlenecks. It also assesses internal governance and institution-wide controls.

Insolvency risks are mainly limited through economic liquidity risk ratios and limits for liquidity gaps. The aim of the liquidity risk strategy is to preserve the ability to meet payment obligations at all times and when due, even in stress scenarios.

The approach to measuring liquidity risk has been refined. On this basis, there was a transition in 2025 from a ratio as liquidity risk indicator to minimum excess coverage measured in euros. The indicator is determined using stress scenario narratives that show market-wide and/or institution-specific crises using stressed risk factors. Minimum excess coverage is based on the worst-case scenario for liquidity, "Combined stress", and is defined as the lowest net liquidity in an observation period of three months. Internal liquidity risk measurement is based on the scenario calculations described. This approach first analyses the expected inflow and total outflow of payments for the next 12 months based on business already concluded. This baseline cash flow is then supplemented by planned and estimated payments (e.g., borrowings from the capital market, expected liquidity-related loan defaults or planned new business). The result provides an overview of the liquidity required by KfW Group over the next twelve months. The liquidity required is calculated for different scenarios. In this respect, market-wide and institution-specific risk factors are stressed, and an evaluation is made of the impact on KfW Group's liquidity. Parallel to the above approach, KfW Group also determines the available liquidity potential, which largely comprises KfW's account with the Bundesbank, repurchase agreement assets and the liquidity portfolio. The funding matrix based on the cumulative liquidity requirement and the available liquidity potential is measured as an EUR value for every scenario. The resulting excess coverage or shortfall indicates directly whether there are enough funds available to cover funding requirements, and must not be below zero.

The indicators are calculated and reported to the Market Price Risk Committee on a monthly basis<sup>9</sup><sup>)</sup>. The following table presents the risk indicators for the scenarios as of 31 December 2025:

**KfW liquidity risk indicators** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2025** |
|  | **Minimum<br>excess coverage<br>(EUR in billions)**  | **Minimum<br>excess coverage<br>(EUR in billions)**  |
| Market-wide stress | | 65.61 |
| Institution-specific stress |  | 47.98 |
| Combined stress<br>|  | 39.31<br>|

---

(Prior-year figures not provided due to refinement of liquidity risk model / transition to excess coverage)

KfW continued to support the energy sector through the extension of loans on behalf of the Federal Government in 2025. This funding requirement was addressed through a refinancing facility via the Economic Stabilisation Fund *(Wirtschaftsstabilisierungsfonds)* and liquidity coverage potential provided by the German Finance Agency in the form of ECB-eligible German government securities.

<sup>9)</sup> The minimum excess coverage with a short-term observation horizon of one month is also reported on a weekly basis to the CRO and other selected recipients.

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***Current funding environment***

In a capital market environment once again characterised by many political uncertainties, KfW generated a total issue volume (net proceeds) of EUR 71.0 billion on the international capital markets in financial year 2025 (2024: EUR 78.1 billion). There were 164 individual transactions (2024: 145). KfW issued bonds in ten different currencies, with around 82% of long-term borrowing taking place in the two main funding currencies – euros (around 58%; 2024: 62%) and US dollars (around 24%; 2024: 25%).

KfW issues commercial paper (CP) with maturities of up to one year on the money market through two CP programmes. The outstanding volume of the Multi-Currency Commercial Paper programme designed for global investors amounted to EUR 41.1 billion as of the 31 December 2025 reporting date (31 Dec. 2024: EUR 23.1 billion). At 127 days, the average term of the issues under the Multi-Currency Commercial Paper programme was longer in 2025 than in the previous year (113 days). The outstanding volume of the US Commercial Paper (USCP) programme was USD 15.6 billion as of the 31 December 2025 reporting date (31 Dec. 2024: USD 9.3 billion). At 78 days, the average term of the issues under the USCP programme was also longer in 2025 than in the previous year (53 days).

**Model risk** 

KfW employs models as an essential component for risk measurement and capital management, for calculating the effects of stress tests, and more generally for model-based business management overall. Using models means there are model risks, which can affect other types of risk such as credit or market price risk. Model risk was therefore once again identified as a material overarching risk in the 2025 risk inventory, since direct and considerable impacts on net assets, earnings position or liquidity can arise from weaknesses or errors at both model and model interaction level. Identifying and managing model risks is aimed at ensuring adequate control of model risks and timely and risk-oriented elimination or compensation of (systematic) model weaknesses that have been identified, particularly through independent validation, and at promoting an appropriate risk culture for dealing with models. Model risk is compensated by capital buffers in the economic risk-bearing capacity and individual adjustments at the model level, such as valuation reserves and manual adjustments, or by taking margin of conservatism premiums into account in model parameterisation. The annual model risk report gives the KfW Executive Board an overview of the entire model landscape with further details of the models in focus, as well as a general assessment of model risks at KfW. The ongoing management of model risks is carried out both through active performance of the individual model roles and through discussions and decisions in the risk committee meetings that regularly take place.

**Operational risk** 

In accordance with Article 4 (1) no. 52 of the CRR, the group defines operational risk as the negative impact on net assets (including capital adequacy), earnings position or liquidity that can result from inadequate or failed internal processes, people and systems or from external events. Operational risks are monitored by a central Risk Controlling unit. The methodology behind the models and procedures used for measurement and monitoring is adjusted on a regular basis. This definition also includes legal risks, but excludes project risks and reputational risks. In addition, the operational risk subtypes are monitored by specialised second line of defence units.

According to the 2025 risk inventory, the "compliance risk" and "information security risk" subtypes are classed as material.

The aim of management and control of operational risk is the proactive identification and averting of potential losses for the group, i.e., to make emergencies and crises manageable and to secure the group's structural ability to remain operational even in the event of loss of key resources.

Management of risks is decentralised and performed within the business sectors and subsidiaries by the respective directors or members of management, who are supported by the respective sector coordinators for OpRisk and BCM. Risks are monitored and communicated group-wide by the Non-Financial Risk department; individual institution level management is performed in the respective units of each subsidiary. These staff develop the relevant methods and instruments for identifying and assessing risks and monitor their group-wide uniform application. The model for calculating the economic risk resulting from operational risks is also validated by the Risk Controlling department.

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Events and near misses in the group are recorded in an OpRisk event database and updated when changes or developments occur. There is regular target group-appropriate reporting on the recorded loss events and any measures initiated as a result. The Executive Board, the Board of Supervisory Directors and the Non-Financial Risk Committee are briefed monthly or quarterly as part of internal risk reporting. Ad hoc reports are also made if a loss exceeds a certain level.

In addition, potential operational risks are identified based on risk scenarios that are collected from across the group. Operational risks are evaluated on the basis of expert assessments in combination with internal and external loss events as well as internal data (e.g., transactions), which are backed by a distribution assumption for loss frequency and loss amount. The results of the annual risk assessment and the calculated risk scenarios are reported to the Non-Financial Risk Committee and the Executive Board. As part of the risk assessment, the business areas check the implementation of additional risk-mitigating measures (e.g., checks as part of the internal control system – "ICS").

Where adequate monitoring of operational risks using metrics is possible, risk indicators are used. Compliance with centrally prescribed risk-mitigating requirements (e.g., training course participation, deadlines, escalation procedures) is monitored by the overarching Controlling function using business area-specific OpRisk information dashboards to ensure escalation across all levels up to the Executive Board in the event of non-compliance.

The 2025 risk assessment was carried out from April to December 2025.

ICT risk is of particular importance due to the central role played by information and communication technologies ("ICT") in digital operational resilience. The largest ICT risks arise from adjustments to ICT systems (e.g., programming errors and resulting disruptions to payment transactions) and unauthorised access to systems (e.g., cyberattacks). Safeguarding digital operation resilience, i.e., the ability to ensure KfW's operational reliability even in the event of disruptions, requires overarching management and control of the ICT risk affecting various risk (sub)types. Specific ICT requirements of ICT-relevant functions are defined to this end, which address the provisions of DORA.

***Information security risk***

Information security risk ("IS risk") refers to the uncertainty involved in achieving the respective protection targets (confidentiality, integrity and availability) of information assets and the resulting potential adverse effect on the group's net assets (including capital adequacy), earnings position or liquidity. An IS risk occurs precisely when a threat (e.g., a cyberattack) is accompanied by a vulnerability (e.g., planned protection measures that have not been implemented). Target security requirements for information assets are being derived from regulatory and statutory requirements, the requirements of the ISO 27001/2 standards, security audits and IS incidents, and defined as topic-specific security requirements. These requirements form the basis for a target/actual comparison. Target requirements to achieve the desired security level, and thus also the mandatory security requirements, may differ for each protection target (confidentiality, integrity and availability). Differences in the target/actual comparison are assessed in a risk analysis and dealt with accordingly.

***Compliance risk***

Compliance risk is defined as the risk of legal or regulatory sanctions or negative effects on net assets (including capital adequacy), earnings position or liquidity arising from non-compliance with external or internal requirements, voluntary commitments or legal regulations, which contribute to the following aspects of operational compliance:

– fraud and corruption risk; risk of criminal activities,

– securities compliance and conflict of interest risk in provision of investment services,

– money laundering/terrorist financing risk,

– risk of breaching embargoes or sanctions,

or which fall under the overall process of compliance with minimum requirements for risk management *(Mindestanforderungen an das Risikomanagement – "MaRisk")* as published by the German Federal Financial Supervisory Authority *(Bundesanstalt für Finanzdienstleistungsaufsicht – "BaFin")*, in accordance with MaRisk

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AT 4.4.2. The processes for identifying, assessing, controlling and monitoring compliance risk, including the aspects listed above, are part of the Compliance Management Framework ("CMF"). This includes minimum requirements both for implementing regulatory requirements and for ensuring appropriate group-wide risk management. Under the CMF, the Compliance department acts as a second line of defence to ensure that risks of material rule violations are identified promptly and mitigated.

**Reputational risk** 

Reputational risk is the risk that public perception of the group from the point of view of the relevant internal and external stakeholders will deteriorate for the long term with a negative impact on KfW Group. This negative impact could lead to a decrease in KfW Group's net assets, earnings or liquidity (e.g. a decline in new business) or may be of a non-monetary nature (e.g. difficulty in recruiting new staff). Reputational risk may arise as a consequence of other types of risk, or independently.

Reputational risk is categorised as a non-material risk type in the risk inventory. Due to KfW's special role and business model, this risk type is nevertheless of particular importance, which is why its treatment is essentially unchanged throughout the risk management cycle.

Reputational risks are managed based on qualitative criteria. This reflects both stakeholders' expectations and the bank's self-image of adhering to all relevant ethical, governance, environmental and compliance standards. In recent years, an internal method was developed to incorporate reputational risk into the decision-making process for financing and investments based on uniform standards; this method is gradually being rolled out in the KfW Group entities.

Moreover, as part of risk identification, the central reputational risk control function coordinates qualitative reputational risk assessment and creates a risk profile outlining the group's greatest reputational risks relating to the bank's most important stakeholders. In addition, reputational risk events that have occurred are reported on an ongoing basis.

**Additional internal control procedures** 

**Process-integrated internal control system (ICS)** 

The aim of KfW Group's ICS is to use suitable principles, measures and procedures to ensure the effectiveness and profitability of business activities, compliance with the legal requirements applicable to KfW Group, the accuracy and reliability of external and internal accounting, and the protection of assets. There are group-wide ICS rules as well as binding group-wide minimum requirements of the ICS. KfW Group's ICS is based on the relevant legal (bank regulatory) requirements <sup>10)</sup>, in particular those set forth in the KWG and MaRisk, and the standard market ICS framework, such as the COSO model <sup>11)</sup>. The KfW Executive Board holds overall responsibility for the group's ICS. The respective company management of the subsidiaries KfW IPEX-Bank, KfW Capital and DEG holds overall ICS responsibility. Design and implementation at the different corporate levels are the responsibility of the relevant managers according to the organisational structure. Procedural rules form the basis of the ICS. These constitute the framework for a proper business organisation within KfW Group, in the form of a binding policy. Workflow organisational measures and controls are intended to ensure that monitoring is integrated into processes. Monitoring measures integrated into processes serve to avoid, reduce, detect and correct processing errors or financial loss. The effects of any planned changes to operational processes and structures on the procedure and intensity of monitoring are analysed in advance. To ensure the adequacy and effectiveness of the ICS, KfW regularly scrutinises and continually refines its standards and conventions. A report is rendered annually to KfW Group's supervisory bodies. The adequacy and effectiveness of the ICS within KfW Group is also assessed by Internal Auditing on the basis of risk-based audits carried out independently of group procedures.

<sup>10)</sup> See Section 25a (1) no. 1 KWG, MaRisk AT 4.3, and Sections 289 (5), 315 (2) no. 5, 324, and 264d HGB

<sup>11)</sup> COSO = Committee of Sponsoring Organizations of the Treadway Commission

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**Compliance** 

The Executive Board bears overall responsibility for compliance within the Group. The Executive Board delegates the associated tasks to the Compliance department. The officers appointed by the Executive Board for the relevant areas of responsibility are located in the Compliance department. They include, in particular, the (group) money laundering officer, the fraud officer (central unit in accordance with Section 25h KWG) and the company data protection officer. The Compliance organisation is structured in accordance with a Three Lines of Defence model; as the second line of defence, it is aligned with the requirements for a MaRisk compliance function. In this context, group compliance has in particular included measures to prevent insider trading (securities compliance), general conflicts of interest (conflict of interest risk), money laundering and terrorist financing and criminal activities, to comply with sanctions and embargo regulations, and to monitor legal requirements and the associated implementation measures (overall MaRisk compliance process in accordance with MaRisk AT 4.4.2.). There are therefore binding rules and procedures that influence the day-to-day implementation of values and the corporate culture, which are updated regularly and on an ad hoc basis to reflect current law as well as market requirements. These include group-wide policies, that, in particular, serve to prevent criminal acts and set out how to deal with gifts and invitations. The aim is to manage and assess compliance risks as part of non-financial risks, among other things, by means of key indicators in line with the central requirements for operational risk management. Since the entry into force of the material requirements of the Supply Chain Act *(Lieferkettensorgfaltspflichtengesetz)* on 1 January 2023, the compliance organisation has also acted as a central point for recording, monitoring and controlling compliance with the related requirements. Within the scope of its duties as second line of defence, Compliance is responsible for and authorised to ensure implementation of statutory or regulatory requirements and Executive Board decisions, to analyse individual cases/irregularities, to coordinate necessary measures and, where applicable, to initiate ad hoc measures to limit damage. In relation to all other areas of the group, the Compliance department performs its tasks autonomously and independently and is not subject to any instructions, in particular with regard to analysis (including evaluation of results), monitoring activities, defining and implementing rules and measures, and reporting. In order to perform its duties, Compliance has a complete and unrestricted right to information, inspection and access to all premises, documents, records, audio recordings and systems. Where necessary, internal auditing and monitoring processes of the compliance organisation have been adapted to the changed risk situation (for example, regarding the Russian war on Ukraine and the Gaza war resulting from the Hamas attack). Group-wide task forces were established for this purpose where necessary. Compliance monitors legal and regulatory requirements on an ongoing basis and, as necessary, adapts them to the changed risk situation in coordination with the affected functions of the first line of defence. Legal matters are analysed in collaboration with the Legal Department where necessary.

**Internal Auditing** 

Internal Auditing is an instrument of the Executive Board. As an entity that works independently of KfW Group procedures, it audits and assesses all of KfW Group's processes and activities to identify the risks involved and reports directly to the Executive Board. With a view to risk management processes, Internal Auditing performed an audit in the reporting year of the decentralised risk management processes and central aspects of risk management and risk control which were relevant group-wide. The focus areas of the audit across all risk types were the application, operation and further development of the models used in risk management, and management of the bank's market price and liquidity risks. A substantive test was also performed in the area of model risk management. Audits of key second line functions were also part of the 2025 audit plan. The risk management projects that Internal Auditing assessed as material were supported by Internal Auditing, maintaining the latter's impartiality and avoiding any conflicts of interest. Moreover, Internal Auditing continued to monitor the ongoing development of risk measurement procedures in 2025 by attending meetings of decision-making bodies (as a guest). Internal Auditing also functions as KfW Group's internal auditing department. It is involved in subsidiaries' audit planning. In addition to the audit results obtained independently in group-wide audits, it also incorporates the audit results of third parties (group auditors, BaFin and the internal auditing departments of the other group companies) in its group-wide internal audit reporting, in the tracking of measures and as a source of information when preparing its own audits.

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## Forecast and opportunity report
**General economic environment and development trends** 

KfW expects global real gross domestic product ("GDP") to grow by 3.1% year on year in 2026, after increasing according to International Monetary Fund ("IMF") estimates by 3.3% in 2025. A lower growth rate than the prior year is expected for the group of industrialised countries as well as for the group of developing countries and emerging economies (see table "Gross domestic product at constant prices"). The IMF's forecasts show that global consumer price inflation is expected to fall from an annual average of 4.1% in 2025 to an annual average of 3.8% in 2026. This means that the inflation rate for industrialised countries in 2026 is expected to be 5.1 percentage points below and that of the developing countries and emerging markets 4.9 percentage points below the highest rate of the past ten years, which was reached in 2022. KfW agrees with the IMF's assessment that the economic outlook will be determined by the trade policy measures introduced in 2025, reduced official development assistance and migration restrictions, and that economies, institutions and markets will adjust to rising protectionism and increased fragmentation of the global economy.

**Gross domestic product at constant prices** 

---

| | | | |
|:---|:---|:---|:---|
| **Year-on-year change** | **2025**<br> **estimate** | **2026**<br> **forecast** | **average for<br>2015–2024** |
|  | **in %** | **in %** | **in %** |
| Global economy<sup>\*</sup>  | 3.3 | 3.1 | 3.1 |
| Industrialised countries<sup>\*</sup>  | 1.7 | 1.6 | 1.9 |
| Developing countries and emerging economies<sup>\*</sup> | 4.4 | 4.0 | 4.0 |

---

\* Aggregation of annual GDP growth rates at each country's constant price based on the shares of each country's GDP valued at purchasing power parity in the corresponding aggregate. Grouped into industrialised countries and developing countries/emerging economies based on IMF classification. The average is calculated as the geometric mean of annual growth rates. 

Development of the global economy going forward is subject to particular uncertainty. The IMF believes that negative risks predominate. For one thing, US tariff increases and the backlash from some trading partners may have a worse impact on international trade than expected. For another, escalating trade conflicts and an increased use of protectionist measures could disrupt international value chains and impede technological progress. Industrialised nations are encountering fiscal vulnerabilities, primarily due to rising costs of financing sovereign debt, meaning that a further increase in term premiums could result in greater refinancing risks. In the case of developing countries, reduced funds from Official Development Assistance increases the need for refinancing covered by private creditors. If risk premiums increase, greater debt stress in developing countries and emerging markets could result. A reassessment by the financial markets of assets and, in particular, technology shares due to a worsening economic outlook, disappointed artificial intelligence earnings expectations or spill-over effects from the revaluation of government bonds, may lead to disorderly asset repricing. The resulting negative effects on assets would also impact private consumption. Additional downside risks come from geopolitical tensions that may escalate and have an adverse effect on international trade and value chains, and exacerbate geoeconomic fragmentation. Geopolitical risks are posed primarily by the conflicts in the Middle East and the war in Ukraine, geopolitical competition in the Indo-Pacific region, the current US National Security Strategy (particularly concerning Latin America) and geopolitical interests in the Arctic. If commodity prices are more volatile than forecast or rise, due to climate-related and geopolitical shocks as well as regional conflicts, this could boost inflation, particularly in commodity-importing countries. If environmental disasters result in crop failures, elevated food insecurity would affect low-income countries in particular. Should rising food prices result in higher inflation expectations, this may cause central banks

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to tighten monetary policy and damage consumer confidence. Monetary policy reactions would be required if restrictive migration policies resulted in labour market shortages, wage increases and, as a consequence, inflationary pressure. If the principles of good governance are disregarded, there is an increased risk of bad economic policy decisions.

There is also a possibility that the global economy will grow faster than forecast. This would be the case if international trade agreements substantially reduced existing trade barriers. Global economic development would also be more positive than expected if structural reforms to bolster productivity growth were implemented more rapidly and comprehensively than previously planned. Moreover, advances associated with artificial intelligence may provide unexpectedly strong impetus for productivity development.

For the **euro area**, KfW expects price-adjusted GDP to grow by 1.3% year on year in 2026. The expected growth rate would therefore be only 0.2 percentage points lower than in the previous year, albeit slightly below the average for the 2015–2024 period (see the table "Gross domestic product at constant prices, year-on-year change"). According to the European Commission's Autumn Forecast, GDP growth will be boosted in 2026 by increased private and public domestic demand, underpinned by fiscal impetus from increased infrastructure and defence spending. In addition to the German fiscal package, the funds from the EU's "NGEU" recovery programme will make a particular contribution to growth. The easing uncertainty among businesses thanks to the trade agreement between the USA and the European Union, along with the economic upturn, may result in a slight uptick in investment activity. The improved financing conditions due to monetary easing are also stimulating investment. Increasing consumer demand from private households will be a key driver of economic growth. Further real growth in household income, even if weaker year on year, due to the ongoing drop in inflation, and the stable employment situation are expected to generate higher consumer spending. Weak foreign demand due to the US tariffs and the appreciation of the euro versus the US dollar are expected to have an adverse effect on the price competitiveness of export goods, and thus exert further pressure on exports.

KfW estimates that, among the four largest eurozone countries, Germany will record growth close to the euro area average, while France and Italy can be expected to record below-average growth and Spain above-average growth compared to the euro area as a whole.

The effects on the euro area of the increased global tariffs imposed by the US may be much worse than assumed. There are also elevated risks of disruptions in supply chains in the manufacturing sector, which is heavily reliant on the import of critical raw materials from China.

KfW expects price-adjusted GDP in Germany to increase by 1.5% year on year in 2026. This would mean tangible growth for the first time since 2022, and an expected increase of 1.8% compared to 2019, the year before the outbreak of the coronavirus pandemic (see the table "Gross domestic product at constant prices, year-on-year change"). The main driver of this development would be fiscal stimulus, which KfW expects to contribute 0.8 percentage points to the aforementioned GDP growth. The impetus would be the result of significantly higher spending on defence and infrastructure targeted by the current Federal Government, which has been in office since the spring of 2025. Furthermore, there will be more working days in 2026 than in the previous year, which will make possible an additional GDP increase of 0.3 percentage points. In light of the global economic forecasts set out above, and assuming a continued increase in the purchasing power of private households and the aforementioned fiscal stimulus, KfW expects on the demand side that all GDP components, with the exception of net exports, will make positive contributions to growth. Aside from government final consumption expenditure and government investment, whose substantial expansion will be a result of fiscal impetus, the strongest growth driver is likely to be private consumption. In terms of output, KfW expects both the service sector and manufacturing to contribute to greater price-adjusted gross value added in 2026. The average annual number of persons in employment located in Germany is expected to rise again in 2026, although the skilled labour shortage is expected to increase due to demographics.

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**Gross domestic product at constant prices, year-on-year change** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2026**<br> **forecast** | **2015–2024<br>average** | **2026**<br> **forecast** |
|  | **in %** | **in %** | **in %** | **2019 index =<br>100** |
| Euro area | 1.5 | 1.3 | 1.5 | 108.0 |
| Germany | 0.2 | 1.5 | 0.9 | 101.8 |
| USA | 1.8 | 1.9 | 2.4 | 117.0 |

---

In addition to geopolitical and geoeconomic risks, domestic and global economic uncertainty could have a heavier adverse impact on GDP growth in Germany than expected. Further downside risks to Germany's price-adjusted GDP as expected by KfW are posed by additional import tariffs imposed by the USA on goods from the EU, an escalation of trade disputes between the USA and China, more shortages and sudden price increases on the energy and raw materials markets, an economic slump in China, an unexpectedly sharp downturn on the German labour market, an abrupt end to the current AI boom, and environmental and natural disasters.

There would be a chance of higher than expected growth in price-adjusted GDP in 2026 in scenarios including an unexpectedly rapid decrease in economic policy uncertainty, including the waiver of US import tariffs on goods from the EU, a substantial reform of social security systems or taxes, or a reduction of bureaucracy in Germany, an end to Russia's war on Ukraine and the resulting additional export opportunities, a decline in the savings rate of German private households due, for instance, to a general improvement in sentiment, and in the event of a surprising boost in productivity due to artificial intelligence.

The ECB began reducing key interest rates in June 2024, and gradually reduced the deposit facility rate to 2.0%. Inflation in the euro area has been close to the ECB's medium-term target of 2% since mid-2025, based on the Harmonised Index of Consumer Prices. KfW concurs with the ECB's forecast that inflation will continue to develop in line with the medium-term inflation target in 2026. It therefore assumes that the ECB has ended its rate-cutting cycle and will leave key interest rates at their current level in 2026.

The ECB is continuing to shrink its balance sheet. Consequently the redemption amounts of maturing securities from the Asset Purchase Programme and the Pandemic Emergency Purchase Programme initiated during the COVID-19 pandemic are not being reinvested. This will likely result in a balance sheet reduction of around EUR 500 billion, or approximately 8% of total assets, for 2026. The yield curve (the spread between ten and two-year EUR swap rates) stabilised at around 60 basis points at the end of the rate-cutting cycle. KfW expects the curve to remain in moderately positive territory in 2026.

The US Federal Reserve also began to lower key interest rates in September 2024, and continued following a break from January to September 2025 due to the weakening labour market. KfW expects continued monetary easing in 2026, and a cut in the federal funds rate to a range of 3.00% to 3.25%. In KfW's opinion, the US Federal Reserve is likely to continue to make decisions based on data in an uncertain economic policy environment.

The USD yield curve is likely to continue to steepen somewhat in 2026 in light of expected key rate cuts, and be slightly steeper than its euro counterpart (spread between ten and two-year USD swap rates).

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**New business projections of KfW Group** 

**Overview** 

KfW's strategic objectives are presented to the Board of Supervisory Directors along with its planning on an annual basis. The annual planning operationalises and substantiates the objectives into a consistent whole in terms of strategy, promotion, finance, risk and funding. The Board of Supervisory Directors discusses the business strategy in accordance with regulatory requirements and acknowledges it; it further approves the annual planning in accordance with the KfW Bylaws. The internal management system supports the realisation and monitoring of objectives, with regular reports provided to the Board of Supervisory Directors.

KfW Group projects new business volume of EUR 97.5 billion for 2026. This reflects the stabilisation of new commitment growth, as well as the role KfW plays in supporting the German economy and society in times of persistent uncertainty.

KfW is careful to avoid potential adverse effects and risks to society and the environment in its promotional activities, and where possible attempts to reduce or offset such effects via suitable measures (inside-out perspective). Furthermore, KfW considers environmental changes, such as to the climate and biodiversity, social transformation and governance standards with an impact on the credit rating of KfW clients, as well as the effects of various climate scenarios on KfW's business model and risk profile (outside-in perspective). These considerations are not expected to have any impact on the new commitment volume projected for 2026.

**Domestic business** 

After new business development came under pressure in 2024 due to the EU interest rate benchmark and recovered in 2025, a substantial increase in new business volume is expected for the business sector **Mittelstandsbank & Private Kunden (*SME Bank* & *Private Clients*)** in 2026, driven by new developments in the promotional area of housing. The challenging macroeconomic environment and budget funds continue to affect new business expectations. In addition, for example, to risk-bearing capacity and passing on of favourable refinancing costs, promotional expense is yet another instrument to underpin the primary objective of promotion. The use of further promotional expense in projections creates additional incentives in the promotion of digitalisation and innovation, and in corporate environmental financing. Overall, new business volume of EUR 49.3 billion is expected for 2026. The projections allow EUR 9.6 billion for ERP programmes, which are planned to be expanded further in the digitalisation and innovation segment in particular. Around EUR 0.3 billion in ERP promotional expense is budgeted to support the positive sales impact of the ERP programmes, amounting to 59% of the total promotional expense budget.

The business sector bundles the retail business capable of being digitalised and automated and carries a large share of the domestic promotional volume. The business sector positions itself as a reliable partner to the Federal Government and is divided into two segments by customer group. The SME Bank segment supports the German economy with a wide range of promotional programmes for commercial customers with various promotional priorities. The Private Clients segment supports education and energy efficiency in the construction and refurbishment of residential buildings, and also promotes the acquisition and construction of owner-occupied housing as well as accessible conversion/construction of homes. The necessary transformation towards renewable energy, the high level of investment required to achieve climate neutrality, the persistent uncertainty regarding the energy supply due to the ongoing war and the worsening consequences of climate change have a direct impact on relevant markets and customer groups in the business sector, while also constituting an opportunity. New promotional objectives and approaches to expand renewable energy are emerging, which, among other things, serve the transformation of companies in order to achieve environmental and climate targets as well as further expanding renewable energy. In addition, the issue of climate resilience is increasingly coming to the fore as climate change intensifies.

The business sector **Individualfinanzierung & Öffentliche Kunden (*Customised Finance* & *Public Clients*)** bundles innovative and tailored promotional solutions for companies and banks, and promotion of municipal and social infrastructure. Based on its expertise, the business sector is responsible for implementing large-volume Federal Government-mandated transactions in the energy context and focuses its core business on the targeted promotion of environmental protection and climate action, innovation and the acceleration of digitalisation, contributing directly to the strategic focal issue "promotional mandate, impact and impetus". The business sector's promotional activities use own funds, federal budget funds and ERP programmes.

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This sector is split into three business segments. With regard to customised financing for companies, the moderate economic recovery and extended product portfolio may generate an increase in loan demand. However, even with a moderate economic recovery in Germany, potentially lower risk tolerance on the part of partner banks cannot be ruled out. This could result in greater demand for KfW's risk participation. In this context, particularly the risk-bearing promotional products in the megatrends "climate change and environment", "digitalisation and innovation" and "venture debt financing" are achieving greater relevance for young, growth-oriented companies.

The demand for investment in municipal and social infrastructure remains strong given the central role municipalities play in meeting the challenges presented by climate change and digital transformation. However, the strained budget situation of many municipalities in conjunction with limited planning capacities continues to limit their investment and borrowing opportunities. On the other hand, the heating transformation is expected to generate the chance of high demand for promotion and financing for geothermal energy/district heating and expansion of the electricity distribution grid.

Individual financing with financing partners in Germany and Europe, as well as funding of promotional institutions of the federal states, will continue to be characterised by a sound funding situation at partner banks, which tends to limit business potential. Export loan refinancing demand for small and medium-sized projects is robust at present, yet potential for the German export industry has waned in the face of growing geoeconomic fragmentation, tougher tariff policy and increasing competition from China. The innovative synthetic risk transfer instrument will likely present new opportunities to promote transformative investments.

Following subdued volume due to the development of the EU interest rate benchmark through the end of 2024, the business sector plans to return to its previous longer-term target level in 2026. The projected new business volume of just under EUR 10 billion includes a significant proportion of newly developed promotional programmes with Federal Government participation, such as the new hedging instrument for the transforming industries.

**KfW Capital** invests in venture capital ("VC") and venture debt funds, and, via special purpose vehicles, in start-ups and innovative, high-growth technology companies to improve the sustainable provision of venture and growth capital, thereby also strengthening Germany as an innovation hub for the long term. Strengthening the German VC market is also necessary to tackle the persistent deficit in the amount of VC investment in future technologies compared to other countries. KfW Capital itself provides more venture capital directly to the market through its own fund and direct investments. Particularly in the years when private investors were hesitant to raise funds, KfW Capital successfully positioned itself as a reliable partner and financier of VC funds and thus indirectly of technology companies in Germany.

ERP Venture Capital Fund Investments and ERP/Future Fund – Growth Facility will remain the two main own-risk programmes of KfW Capital in 2026 as well. KfW Capital has also developed a co-investment approach (Scale-up Direct), in order to invest directly in portfolio companies of fund managers with whom KfW Capital already has a business relationship. In addition, this programme gives KfW Capital the opportunity to invest directly in attractive companies with high growth potential.

In 2026, the strategic focal issue "mobilising private equity" will involve fundraising for the VC umbrella fund Growth Capital II, for which KfW Capital will raise private equity funding as an investment broker following successful fundraising for its predecessor, the German Growth Fund. KfW Capital will also continue to act as financial portfolio manager for individual components of the Future Fund and as an investment advisor in connection with the German Growth Fund in 2026. Since 2025, KfW Capital has invested in VC funds that aim to generate an environmental or social return in addition to a financial return via the Impact Facility component of the Future Fund. This gives KfW Capital the opportunity to give a decisive boost to key future areas. KfW Capital promotes the creation of new VC funds and diversity in the German VC ecosystem through investments made via the Emerging Manager Facility.

In total, new business volume of around EUR 1.1 billion is expected for 2026, of which around EUR 0.5 billion is at KfW Capital's own risk.

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**Financial markets** 

KfW Group bundles all funding activities along with its liquidity and operational market price risk management in the business sector **Financial markets**. Other tasks include carrying out holding arrangements on behalf of the Federal Government and mandated transactions in accordance with Article 2 (4) of the KfW Law as well as advising other group units on capital market matters and carrying out capital market transactions on behalf of other group units.

In order to reinforce KfW's sustainability profile and its positioning as a sustainable issuer, KfW consistently develops its green bond issuance strategy. The green bond programme was expanded in 2024 by linking additional loan programmes and international business. Another review of the Green Bond Framework is planned for 2026 with the aim of securing the issuance of large-volume green bonds for the long term and thus further expanding the investor base, promoting a long-term stable and well-diversified capital market position, and further promoting the issue of sustainability on the capital market.

**International business** 

Economic and geopolitical risks, the uncertainty associated with the Russia-Ukraine war, the Middle East conflict and global economic fragmentation trends are relevant for the business sector **Export and project finance**. There are opportunities in Europe and in the regions relevant for Export and project finance (including North and South America, the Middle East and Asia) in sectors with growth potential (e.g., digital infrastructure, e-mobility, local public transport, energy efficiency, and investments in sustainable transformation). Economic and sustainability programmes and programmes to bolster supply security may also stimulate demand for financing, particularly for infrastructure investments and transformation projects aiming for a climate-neutral economy. Although the future development of the business sector Export and project finance continues to entail many uncertainties, from today's perspective there are sufficient opportunities and potential for achieving the target commitment volume.

A new commitment volume totalling EUR 25.2 billion is expected for 2026. Of this amount, roughly EUR 23.0 billion is expected to be attributable to the primary business Export and project finance, and roughly EUR 2.2 billion to the commercial interest reference rate business, which cannot be controlled by the business sector.

The business sector **KfW Development Bank** expects a moderately reduced commitment volume in the next few years, primarily due to federal budget consolidation. The business sector will continue to support the Federal Government and the EU in achieving their development policy targets and in international cooperation, and in so doing, help to safeguard German and European interests.

The Federal Government and the EU support partner countries in fighting poverty, hunger and inequality, and mitigating crises, and also assume responsibility in the area of international environmental protection, climate action and biodiversity conservation. There will also be increased focus on (geo)strategic goals: tackling the reasons that make people flee their countries of origin, cooperation in the energy sector, economic cooperation and securing access to raw materials. Increased involvement of German and European companies is also expected to be ensured.

The federal budget funds provided for development cooperation will be reduced again in 2026. Medium-term financial planning is subject to considerable uncertainty. At the same time, budget funds remain essential for the Federal Government to achieve the ambitious targets it has set itself. KfW Development Bank has developed approaches for new instruments to support the government. These make even better use of KfW funds and, in particular, can help to mobilise additional private investment. In order to fulfil its promotional objectives, the Federal Government must also provide an adequate guarantee framework for Financial Cooperation.

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KfW Development Bank faces greater political expectations as well as opportunities to raise its profile in the area of climate financing. Germany has committed to the new climate financing target by 2035. There is potential for KfW Development Bank to become even more involved in international energy/climate/infrastructure financing – primarily with market funds and subject to sufficient cover options. There is also business potential from the creation of new carbon markets, which are the most resilient in the net zero emissions scenario. KfW Development Bank is able to identify suitable projects or sectors in partner countries, prepare them for certification, and promote investment with appropriate financing instruments.

KfW Development Bank currently expects a new business volume of approximately EUR 9.3 billion for 2026.

**DEG** is assigned to the business sector of the same name. The economic situation in developing countries and emerging economies will remain challenging in 2026 and will also present many opportunities for DEG's business model. In light of the pressure on the development budgets of public donor countries, development cooperation is currently undergoing a structural change – from focusing solely on poverty alleviation to promoting transformational development. DEG's private sector mandate is becoming much more significant in this context.

DEG's objective remains to be a reliable partner and support its customers in making investments with a development impact, such as by creating jobs and incomes and contributing to development of the common good. It provides long-term financing for this purpose – in the form of loans, mezzanine capital and equity investments. This applies to local businesses as well as German and European companies that invest in developing countries and emerging economies. DEG also offers its customers advice on sustainability, climate issues, development impacts and corporate governance. It aims to support businesses in their transformation and increase their contributions to local development. In so doing, DEG also helps to mobilise private capital – a key requirement for achieving the Sustainable Development Goals and the Paris climate targets.

The high demand seen in recent years underscores the relevance of DEG's offering. On this basis, DEG plans to pursue a scaling agenda from 2026 with a focus on expanding its lending business. A new business volume of EUR 2.6 billion is projected for financial year 2026. This growth is intended to be resource-efficient, through means including larger financing commitments for customers with suitable risk-return-impact profiles and the use of hedging instruments. The planned scaling project is to be implemented in all three business areas: Financial Institutions, Infrastructure & Energy, and Industries & Services, Private Equity and Venture Capital. Collaborative transformation work with companies is the focal point in all areas. In parallel, DEG will be continuing its own transformation – in particular by systematically digitalising its business processes. This will lay a key foundation for efficient growth and scalable business development. To secure sustainable and scaled growth beyond 2026, DEG aims to double its new business volume and mobilisation efforts by 2030. To achieve this, it is currently developing a comprehensive concept that also includes a multi-stage capital increase as a requirement for this growth path.

**Funding projections** 

KfW issues bonds to **fund** its promotional activities worldwide. It issues these in a large number of currencies and with differing maturities, thereby addressing a variety of target groups. Based on the guarantee of the Federal Republic in accordance with Article 1a of the KfW Law, rating agencies have assigned KfW a triple A rating, signifying top credit quality. KfW has achieved an appropriate and professional position in the capital markets with its diversified long term-oriented funding strategy. The funding volume via the capital markets was approximately EUR 71 billion in 2025. A funding need of EUR 75–80 billion is projected for 2026, of which up to EUR 15 billion is expected to be issued as green bonds.

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**Earnings projections** 

In the group **earnings projections** for 2026, KfW expects Consolidated profit of approximately EUR 1,114 million. This puts projected earnings above the strategic target level of EUR 1 billion.

Net interest income (before promotional expense) of EUR 2.9 billion is expected for 2026. Higher income from lending business interest margins than was projected the previous year reflects the positive business performance in the business segment Export and project finance. Rising income is expected from strategic equity investments as a result of higher investment interest rates. Opportunities and risks for Consolidated profit may arise, primarily with respect to the structural contribution, from market conditions deviating from projections in conjunction with KfW's positioning.

KfW projects Net commission income totalling EUR 0.7 billion. This includes remuneration for the implementation of promotional programmes in Germany on behalf of the Federal Government as well as remuneration based on KfW Development Bank's General Agreement.

Administrative expense is likely to be approximately EUR 1.8 billion in 2026. This includes the launch of business policy projects such as processing and refining promotion, regulation projects, modernisation of banking systems and driving digitalisation and innovation.

Overall, the operating result before valuation is expected to be higher than was projected in the previous year.

At EUR 0.5 billion, KfW expects the standard risk costs for 2026 to be at the level of the risk provisions projected for 2025.

For 2026, KfW expects a valuation result before IFRS effects of EUR 0.4 billion from operational level equity investments (included in Net gains/losses from other financial instruments at fair value and the Net gains/ losses from investments accounted for using the equity method) and Net other operating income.

In this regard, risk provisions in the lending business and the valuation result depend on further macroeconomic developments. This may lead to significant positive or negative deviations in the projected result, especially in earnings projections for international and equity investment business.

KfW expects promotional expense of EUR 0.5 billion in 2026.

**Overall conclusion** 

In light of the economic environment and expected demand, KfW projects new business volume of EUR 97.5 billion and consolidated profit of around EUR 1.1 billion for 2026.

The further development of the economic and geopolitical situation, the uncertainty due to the war in Ukraine, the conflict in the Middle East and global economic fragmentation trends could have an impact on German and global economic performance, which in turn may affect the achievement of KfW's objectives set for financial year 2026. KfW will continue to closely monitor the development of the crises and uncertainty and the consequences thereof for KfW's business.

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![LOGO](g109115dsp074.jpg)

Consolidated financial statements

------

Financial Report > <u>Consolidated financial statements</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **[Consolidated statement of comprehensive income](#ex99_e114871_41)** | **65** |
| **[Consolidated statement of financial position](#ex99_e114871_42)** | **66** |
| **[Consolidated statement of changes in equity](#ex99_e114871_43)** | **67** |
| **[Consolidated statement of cash flows](#ex99_e114871_44)** | **68** |
| **[Consolidated notes](#ex99_e114871_45)** | **70** |
| **[Accounting policies](#ex99_e114871_46)** | **71** |
| [(1) Basis of presentation of KfW Group](#ex99_e114871_47) | 71 |
| [(2) Accounting standards that are new, amended or to be adopted for the first time](#ex99_e114871_48) | 71 |
| [(3) Changes to material accounting policies](#ex99_e114871_49) | 73 |
| [(4) Judgements and accounting estimates](#ex99_e114871_50) | 73 |
| [(5) Group of consolidated companies](#ex99_e114871_51) | 75 |
| [(6) Basis of consolidation](#ex99_e114871_52) | 75 |
| [(7) Financial instruments](#ex99_e114871_53) | 76 |
| [(8) Derivatives and hedging relationships](#ex99_e114871_54) | 85 |
| [(9) Offsetting of financial instruments](#ex99_e114871_55) | 87 |
| [(10) Foreign currency translation](#ex99_e114871_56) | 88 |
| [(11) Revenue from contracts with customers](#ex99_e114871_57) | 88 |
| [(12) Promotional lending business at KfW](#ex99_e114871_58) | 89 |
| [(13) Non-current assets held for sale](#ex99_e114871_59) | 89 |
| [(14) Repurchase agreements](#ex99_e114871_60) | 89 |
| [(15) Property, plant and equipment](#ex99_e114871_61) | 90 |
| [(16) Leases](#ex99_e114871_62) | 90 |
| [(17) Intangible assets](#ex99_e114871_63) | 90 |
| [(18) Risk provisions](#ex99_e114871_64) | 91 |
| [(19) Income tax assets and liabilities](#ex99_e114871_65) | 92 |
| [(20) Equity](#ex99_e114871_66) | 93 |
| [(21) Trust activities](#ex99_e114871_67) | 93 |
| **[Notes to the consolidated statement of comprehensive income](#ex99_e114871_68)** | **94** |
| [(22) Net interest income](#ex99_e114871_69) | 94 |
| [(23) Net gains/losses from risk provisions](#ex99_e114871_70) | 96 |
| [(24) Net commission income](#ex99_e114871_71) | 96 |
| [(25) Net gains/losses from hedge accounting](#ex99_e114871_72) | 98 |
| [(26) Net gains/losses from other financial instruments at fair value through profit or loss](#ex99_e114871_73) | 100 |
| [(27) Net gains/losses from disposal of financial assets at amortised cost](#ex99_e114871_74) | 101 |
| [(28) Net gains/losses from investments accounted for using the equity method](#ex99_e114871_75) | 101 |
| [(29) Administrative expense](#ex99_e114871_76) | 101 |
| [(30) Net other operating income or loss](#ex99_e114871_77) | 102 |
| [(31) Taxes on income](#ex99_e114871_78) | 102 |
| **[Segment reporting](#ex99_e114871_79)** | **104** |
| [(32) Segment reporting by business sector](#ex99_e114871_80) | 104 |
| [(33) Segment reporting by region](#ex99_e114871_81) | 108 |

---

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Financial Report > <u>Consolidated financial statements</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **[Notes to the consolidated statement of financial position](#ex99_e114871_82)** | **109** |
| [(34) Cash reserves](#ex99_e114871_83) | 109 |
| [(35) Financial assets at amortised cost](#ex99_e114871_84) | 109 |
| [(36) Gross carrying amounts](#ex99_e114871_85) | 111 |
| [(37) Risk provisions](#ex99_e114871_86) | 113 |
| [(38) Financial assets at fair value](#ex99_e114871_87) | 115 |
| [(39) Value adjustments from macro fair value hedge accounting](#ex99_e114871_88) | 115 |
| [(40) Derivatives designated for hedge accounting](#ex99_e114871_89) | 115 |
| [(41) Investments accounted for using the equity method](#ex99_e114871_90) | 116 |
| [(42) Non-current assets held for sale](#ex99_e114871_91) | 116 |
| [(43) Property, plant and equipment](#ex99_e114871_92) | 117 |
| [(44) Intangible assets](#ex99_e114871_93) | 118 |
| [(45) Income tax assets](#ex99_e114871_94) | 119 |
| [(46) Other assets](#ex99_e114871_95) | 120 |
| [(47) Financial liabilities at amortised cost](#ex99_e114871_96) | 120 |
| [(48) Financial liabilities at fair value](#ex99_e114871_97) | 121 |
| [(49) Value adjustments from macro fair value hedge accounting](#ex99_e114871_98) | 122 |
| [(50) Derivatives designated for hedge accounting](#ex99_e114871_99) | 122 |
| [(51) Risk provisions](#ex99_e114871_100) | 122 |
| [(52) Income tax liabilities](#ex99_e114871_101) | 125 |
| [(53) Other liabilities](#ex99_e114871_102) | 126 |
| [(54) Equity](#ex99_e114871_103) | 127 |
| [(55) Expected time to maturity for assets and liabilities](#ex99_e114871_104) | 128 |
| **[Notes to financial instruments](#ex99_e114871_105)** | **129** |
| [(56) Gains and losses from financial instruments by measurement category](#ex99_e114871_106) | 129 |
| [(57) Disclosures on fair value](#ex99_e114871_107) | 131 |
| [(58) Disclosures on micro fair value hedge accounting](#ex99_e114871_108) | 141 |
| [(59) Disclosures on macro fair value hedge accounting](#ex99_e114871_109) | 145 |
| [(60) Additional disclosures on derivatives](#ex99_e114871_110) | 148 |
| [(61) Additional disclosures on financial liabilities at fair value](#ex99_e114871_111) | 149 |
| [(62) Contractual payment obligations arising from financial instruments](#ex99_e114871_112) | 150 |
| [(63) Disclosures on repurchase agreements](#ex99_e114871_113) | 151 |
| [(64) Disclosure on offsetting financial instruments](#ex99_e114871_114) | 152 |
| **[Other notes](#ex99_e114871_115)** | **154** |
| [(65) Off-balance sheet transactions](#ex99_e114871_116) | 154 |
| [(66) Trust activities and administered loans](#ex99_e114871_117) | 154 |
| [(67) Leasing transactions as lessee](#ex99_e114871_118) | 155 |
| [(68) Average number of employees during the financial year](#ex99_e114871_119) | 155 |
| [(69) Remuneration report](#ex99_e114871_120) | 156 |
| [(70) Related party disclosures](#ex99_e114871_121) | 162 |
| [(71) Auditor's fees](#ex99_e114871_122) | 165 |
| [(72) Disclosures on unconsolidated structured entities](#ex99_e114871_123) | 166 |
| [(73) Disclosures on shareholdings](#ex99_e114871_124) | 168 |
| [(74) Events after the balance sheet date](#ex99_e114871_125) | 171 |
| **[Attestations](#ex99_e114871_126)** | **172** |
| [Independent auditor's report](#ex99_e114871_127) | 173 |

---

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Financial Report > Consolidated financial statements > <u>Consolidated statement of comprehensive income</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Consolidated statement of

## comprehensive income
**Consolidated income statement** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **2025** | **2024** |
|  |  | **EUR in millions** | **EUR in millions** |
| Interest income from the effective interest method |  | 14479 | 20132 |
| Other interest income |  | 1017 | 1049 |
| **Interest income, total** | (22) | **15495** | **21181** |
| Interest expense | (22) | 12963 | 18689 |
| **Net interest income**<sup>1)</sup>  |  | **2532** | **2493** |
| Net gains/losses from risk provisions | (7), (23) | –158 | 39 |
| **Net interest income after risk provisions** |  | **2374** | **2531** |
| Commission income | (11), (24) | 711 | 693 |
| Commission expense | (24) | 39 | 30 |
| **Net commission income** |  | **672** | **664** |
| Net gains/losses from hedge accounting | (8), (25), (58), (59) | –128 | 107 |
| Net gains/losses from other financial instruments at fair value through profit or loss | (26) | 30 | 44 |
| Net gains/losses from disposal of financial assets at amortised cost | (27) | 0 | 0 |
| Net gains/losses from investments accounted for using the equity method | (6), (28) | –6 | 20 |
| Administrative expense | (29) | 1751 | 1672 |
| Net other operating income or loss | (30) | 0 | –52 |
| **Profit/loss from operating activities** |  | **1192** | **1641** |
| Taxes on income | (19), (31) | 189 | 239 |
| **Consolidated profit** |  | **1002** | **1402** |

---

<sup>1)</sup> Refer to Note 22 for a gross presentation of Interest income and Interest expense related to reporting of negative interest income and positive interest expense.

**Consolidated statement of comprehensive income** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Consolidated profit** | **1002** | **1402** |
| **Other comprehensive income** | **48** | **98** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in own credit risk of liabilities designated at fair value through profit or loss | –81 | 105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension obligations (before taxes) | 135 | –6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred taxes on defined benefit pension obligations | –6 | –1 |
| **Consolidated comprehensive income** | **1050** | **1500** |

---

Other comprehensive income comprises amounts recognised directly in equity under Revaluation reserves. These amounts include income and expense from the change in own credit risk of liabilities designated at fair value through profit or loss, changes in actuarial gains and losses for defined benefit pension obligations, and changes in deferred taxes reported depending on the underlying transaction.

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Financial Report > Consolidated financial statements > <u>Consolidated statement of financial position</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Consolidated statement of financial position
**Assets** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **31 Dec. 2025** | **31 Dec. 2024** |
|  |  | **EUR in millions** | **EUR in millions** |
| Cash reserves | (34) | 19535 | 26522 |
| Financial assets at amortised cost | (7), (12), (35), (36), (37), (58), (59) | 511710 | 502666 |
| Financial assets at fair value | (7), (38), (60) | 15581 | 15716 |
| Value adjustments from macro fair value hedge accounting | (8), (39), (60) | –10444 | –9375 |
| Derivatives designated for hedge accounting | (8), (40), (58), (59), (60) | 2031 | 7445 |
| Investments accounted for using the equity method | (41), (6) | 448 | 500 |
| Non-current assets held for sale | (13), (42) | 12 | 37 |
| Property, plant and equipment | (15), (43) | 925 | 922 |
| Intangible assets | (17), (44) | 50 | 69 |
| Income tax assets | (19), (45) | 83 | 109 |
| Other assets | (11), (46) | 793 | 754 |
| **Total** |  | **540722** | **545366** |

---

**Liabilities and equity** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **31 Dec. 2025** | **31 Dec. 2024** |
|  |  | **EUR in millions** | **EUR in millions** |
| Financial liabilities at amortised cost | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7), (47), (58), (59) | 479133 | 485502 |
| Financial liabilities at fair value | (7), (48), (60), (61) | 9305 | 9774 |
| Value adjustments from macro fair value hedge accounting | (8), (49), (60) | –16 | –16 |
| Derivatives designated for hedge accounting | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8), (50), (58), (59), (60) | 8185 | 6982 |
| Provisions | (7), (18), (51) | 3027 | 2948 |
| Income tax liabilities | (19), (52) | 102 | 230 |
| Other liabilities | (11), (53) | 362 | 374 |
| Equity | (20), (54) | 40623 | 39573 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Paid-in subscribed capital |  | 3300 | 3300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital reserve |  | 8447 | 8447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reserve from the ERP Special Fund |  | 1191 | 1191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings |  | 27555 | 26552 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revaluation reserves | (7), (20), (54) | 131 | 83 |
| **Total** |  | **540722** | **545366** |

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Financial Report > Consolidated financial statements > <u>Consolidated statement of changes in equity</u>

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## Consolidated statement of changes in equity
**Consolidated statement of changes in equity** 

---

| | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Subscribed<br>capital** | **Subscribed<br>capital** | **Capital<br>reserve** | **Capital<br>reserve** | **Reserve<br>from the<br>ERP Special<br>Fund** | **Reserve<br>from the<br>ERP Special<br>Fund** | **Retained<br>earnings** | **Retained<br>earnings** | **Fund for<br>general<br>banking<br>risks** | **Fund for<br>general<br>banking<br>risks** | **Revalua-<br>tion<br>reserves** | **Revalua-<br>tion<br>reserves** | **Total** | **Total** |  |
|  | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** |  |
| **As of 1 Jan. 2024** |  | **3300** |  | **8447** |  | **1191** |  | **25150** |  | **0** |  | **–15** |  | **38073** |  |
| Consolidated comprehensive income |  | 0 |  | 0 |  | 0 |  | 1402 |  | 0 |  | 98 |  | 1500 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Consolidated profit* | | *0* | | *0* | | *0* | | *1402* | | *0* | | *0* | | *1402* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Other comprehensive income* | | *0* | | *0* | | *0* | | *0* | | *0* | | *98* | | *98* | |
| Reclassifications within Equity |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| **As of 31 Dec. 2024** |  | **3300** |  | **8447** |  | **1191** |  | **26552** |  | **0** |  | **83** |  | **39573** |  |
| Consolidated comprehensive income |  | 0 |  | 0 |  | 0 |  | 1002 |  | 0 |  | 48 |  | 1050 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Consolidated profit* | | *0* | | *0* | | *0* | | *1002* | | *0* | | *0* | | *1002* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Other comprehensive income* | | *0* | | *0* | | *0* | | *0* | | *0* | | *48* | | *48* | |
| Reclassifications within Equity |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| **As of 31 Dec. 2025** |  | **3300** |  | **8447** |  | **1191** |  | **27555** |  | **0** |  | **131** |  | **40623** |  |

---

The difference to the consolidated comprehensive income is allocated to Other retained earnings or – if recognised directly in equity – to Revaluation reserves.

The note "Equity" provides details on the consolidated statement of changes in equity.

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Financial Report > Consolidated financial statements > <u>Consolidated statement of cash flows</u>

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## Consolidated statement of cash flows

---

| | | |
|:---|:---|:---|
| | <br> **2025** | **2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Consolidated profit** | **1002** | **1402** |
| **Non-cash items included in consolidated profit and reconciliation to cash flow from operating activities:** |  |  |
| Depreciation, amortisation, impairment and reversal of impairment losses (assets) and changes in risk provisions for lending business | 301 | 143 |
| Changes in provisions for pensions and similar commitments and Other provisions | 329 | 264 |
| Other non-cash expenses and income | 41 | 72 |
| Profit/loss from the disposal of assets | 0 | 0 |
| Other adjustments | –2383 | –2325 |
| **Subtotal** | **–711** | **–444** |
| **Changes in assets and liabilities from operating activities after adjustment for non-cash items:** |  |  |
| Financial assets at amortised cost | –9249 | 444 |
| Financial assets at fair value | –356 | 1061 |
| Other assets relating to operating activities | 6986 | –7251 |
| Financial liabilities at amortised cost | –6369 | –14198 |
| Financial liabilities at fair value | –641 | –66 |
| Other liabilities relating to operating activities | 988 | –2836 |
| Interest and dividends received | 15495 | 21181 |
| Interest paid | –12963 | –18689 |
| Income tax paid | –149 | –167 |
| **Cash flow from operating activities** | **–6969** | **–20965** |
| **Property, plant and equipment/Intangible assets:** |  |  |
| Cash proceeds from disposals | 10 | 17 |
| Cash payments for acquisitions | –82 | –90 |
| **Securities and investments (equity investments):** |  |  |
| Cash proceeds from disposals/Cash payments for acquisitions | 55 | 129 |
| **Cash flow from investing activities** | **–18** | **56** |
| Cash proceeds from/Cash payments for capital increases/decreases | 0 | 0 |
| Changes from other financing activities | 0 | 0 |
| **Cash flow from financing activities** | **0** | **0** |
| **Cash and cash equivalents as of the end of the previous period** | **26522** | **47431** |
| Cash flow from operating activities | –6969 | –20965 |
| Cash flow from investing activities | –18 | 56 |
| Cash flow from financing activities | 0 | 0 |
| **Cash and cash equivalents as of the end of the period** | **19535** | **26522** |

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The balance of Cash and cash equivalents reported in the statement of cash flows in accordance with IAS 7 is identical to the statement of financial position item Cash reserves and thus comprises cash on hand and balances with central banks.

The statement of cash flows shows the changes in Cash and cash equivalents in the financial year classified as the Cash flows from operating activities, investing activities and financing activities. The Other adjustments item consisted primarily of the adjustment for net interest income in the amount of EUR –2,532 million (2024: EUR –2,493 million). The cash payments for the repayment portion of lease liabilities included in Cash flow from operating activities amounted to EUR 9 million in financial year 2025 (2024: EUR 13 million). The cash payments for the interest portion of lease liabilities are reported under Interest paid.

For more information on the group's liquidity risk management, see the section on liquidity risk in the combined management report.

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C

![LOGO](g109115dsp082.jpg)

onsolidated notes

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## Accounting policies
**(1) Basis of presentation of KfW Group** 

KfW, the parent company of KfW Group, is the promotional bank of the Federal Republic of Germany and was founded in 1948 as a public-law institution based in Frankfurt am Main (Palmengartenstraße 5–9, 60325 Frankfurt am Main, Germany). KfW promotes the sustainable improvement of economic, environmental and social conditions around the world, but with an emphasis on the German economy.

The Executive Board of KfW is responsible for preparing the consolidated financial statements and the combined management report. The Executive Board will approve the publication of the consolidated financial statements on 5 March 2026.

As of the reporting date, KfW Group comprises KfW and six fully consolidated subsidiaries. One joint venture and two associated companies are accounted for using the equity method.

Pursuant to Section 315e (1) of the German Commercial Code (*Handelsgesetzbuch – "HGB"*), the consolidated financial statements as of 31 December 2025 have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union ("EU"), and with the interpretations set out by the IFRS Interpretations Committee ("IFRS IC"), as mandatory consolidated accounts in accordance with Article 4 of Regulation (EC) No. 1606/2002 ("IAS Regulation") of the European Parliament and of the Council of 19 July 2002, as well as further regulations on the adoption of certain international accounting standards. The standards and interpretations that apply are those that have been published and endorsed by the European Union as of the reporting date.

The supplementary provisions of HGB that also apply to IFRS consolidated financial statements have been taken into account. The combined management report prepared in accordance with Section 315 HGB includes the risk report with risk-oriented information on financial instruments as set out in IFRS 7, as well as information on capital and capital management as set out in IAS 1.134.

The consolidated financial statements are prepared in accordance with accounting policies that are consistent across KfW Group and on a going-concern basis. The companies included in the consolidated financial statements prepared their annual financial statements as of 31 December 2025, except for associated companies accounted for using the equity method, whose financial statements as of 30 September 2025 were used. Material events for the latter companies as of the reporting date were also taken into account.

The accounting policies in the consolidated financial statements were applied consistently with the exception of the items described in Note 3.

The reporting currency is the euro. Unless otherwise specified, all amounts are stated in millions of euros (EUR in millions).

**(2) Accounting standards that are new, amended or to be adopted for the first time** 

**A. Impact of new or amended IFRS/IFRIC interpretations adopted for the first time in the 2025 financial year** 

The amendments to IAS 21, published in August 2023, require an entity to apply a consistent approach when assessing whether a currency is exchangeable into another currency. KfW classifies a currency as exchangeable if, at the time of valuation, it is actually exchangeable via enforceable markets or mechanisms without undue delay. Additional information must be disclosed in cases of non-exchangeability. No such circumstances arose to any material extent.

The accounting standards that are new, amended or to be adopted for the first time have no significant impact on the net assets, financial and earnings position of KfW Group.

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**B. New or amended IFRS/IFRIC interpretations to be adopted in the future that were endorsed by the EU into European law before the reporting date** 

---

| | | | |
|:---|:---|:---|:---|
| **Standard**<br> **concerned** | **Mandatory**<br> **application**<br> **for financial**<br> **years from** | **Description** | **Description** |
| **IFRS 9 /IFRS 7** | 1 Jan. 2026 | The amendments to IFRS 7 and IFRS 9 published in May 2024 relate, among other things, to the requirements in IFRS 9 on the derecognition of financial liabilities using electronic payment systems and on the classification of financial assets, particularly taking into account conditional interest payments (linking interest to ESG factors). In addition, disclosure requirements have been added for financial instruments with conditional cash flows (e.g., those tied to ESG factors) and for investments in equity instruments recognised at fair value directly in equity. In mid-December 2024, the IASB published amendments to IFRS 9 and IFRS 7 on nature-dependent electricity contracts. Accordingly, the own-use exception in accordance with IFRS 9.2.4 et seq. is to be applied to long-term physical power purchase agreements if the company has been a net purchaser of renewable electricity under the contract to date and is expected to be a net purchaser for the entire remaining term of the contract. Furthermore, adjustments to the requirements for hedge accounting in IFRS 9 are planned that will make it possible to use contracts for electricity from renewable energy sources as a hedging instrument under certain conditions. The hedge accounting requirements in accordance with IAS 39 remain unaffected. Moreover, additional disclosure requirements are to be effected in order to better understand the effects of nature-dependent electricity on the financial performance and future cash flows of an entity. | The amendments to IFRS 7 and IFRS 9 published in May 2024 relate, among other things, to the requirements in IFRS 9 on the derecognition of financial liabilities using electronic payment systems and on the classification of financial assets, particularly taking into account conditional interest payments (linking interest to ESG factors). In addition, disclosure requirements have been added for financial instruments with conditional cash flows (e.g., those tied to ESG factors) and for investments in equity instruments recognised at fair value directly in equity. In mid-December 2024, the IASB published amendments to IFRS 9 and IFRS 7 on nature-dependent electricity contracts. Accordingly, the own-use exception in accordance with IFRS 9.2.4 et seq. is to be applied to long-term physical power purchase agreements if the company has been a net purchaser of renewable electricity under the contract to date and is expected to be a net purchaser for the entire remaining term of the contract. Furthermore, adjustments to the requirements for hedge accounting in IFRS 9 are planned that will make it possible to use contracts for electricity from renewable energy sources as a hedging instrument under certain conditions. The hedge accounting requirements in accordance with IAS 39 remain unaffected. Moreover, additional disclosure requirements are to be effected in order to better understand the effects of nature-dependent electricity on the financial performance and future cash flows of an entity. |
| **AIP –**<br> **Volume 11** | 1 Jan. 2026 | At the end of July 2024, the IASB published the "Annual Improvements to IFRS Accounting Standards – Volume 11" with clarifications and corrections: | At the end of July 2024, the IASB published the "Annual Improvements to IFRS Accounting Standards – Volume 11" with clarifications and corrections: |
|  |  | IFRS 1: | Hedge accounting by a first-time adopter. In IFRS 1 paragraphs B5 and B6, cross-references to IFRS 9 6.4.1 have been added, and the term "conditions" has been replaced by "qualifying criteria". |
|  |  | IFRS 7: | Gain or loss on derecognition. Disclosure of deferred difference between fair value and transaction price, credit risk disclosures. In particular, changes have been made to referencing and wording to eliminate ambiguities and inconsistencies. |
|  |  | IFRS 9: | Lessee derecognition of lease liabilities; transaction price. IFRS 9 2.1 (b)(ii) is supplemented by a cross-reference to the IFRS 9 rules on accounting for profit or loss on disposal. The reference to the definition of transaction price in accordance with IFRS 15 in IFRS 9 5.1.3 and in Appendix A has been removed, as the term "transaction price" is used in certain sections of IFRS 9 in a context that does not necessarily correspond to the definition of this term in IFRS 15. |
|  |  | IFRS 10: | Determination of a 'de facto agent'. The amendment resolves a confusion between IFRS 10 paragraphs B73 and B74 by aligning the language in the two paragraphs. |
|  |  | IAS 7: | Cost method. In IAS 7 paragraph 37 the term "cost method" has been replaced by "at cost".<br>|

---

KfW does not intend to use the permitted early-application options of the standard amendments. The changes in IFRS 9 concerning financial instruments with conditional cash flows that are not directly linked to fundamental credit risks and costs have no material impact on the financial statements. The process for assessing the cash flow criterion for these financial instruments will take account of the changed requirements from 2026. The disclosure requirements under IFRS 7 relate to ESG-linked financing. Environmental factors are the focus of the conditional events. These result in a margin adjustment based on the reduction in carbon emissions. Measures designed to implement the new disclosure requirements are largely complete. The standard amendments to IFRS 9/IFRS 7 concerning nature-dependent electricity contracts and the clarifications from the Annual Improvements to IFRS Accounting Standards – Volume 11 did not have any impact on the group's net assets, financial and earnings position.

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**C. New or amended IFRS/IFRIC interpretations to be applied in the future that were published by the EU before the reporting date but have not yet been endorsed into European law** 

---

| | | |
|:---|:---|:---|
| **Standard<br>concerned** | **Effective for<br>financial<br>years from** | **Description** |
| **IFRS 18** | 1 Jan. 2027 | The new standard IFRS 18 'Presentation and Disclosure in Financial Statements' will replace the previous IAS 1 'Presentation of Financial Statements' and is aimed at more transparent presentation and comparability of the performance of entities with a focus on a restructured income statement. Income and expenses are divided into five categories (operating, investing, financing, income taxes, and discontinued operations) with the income statement broken down by predefined subtotals. IFRS 18 also contains provisions to improve the summary and breakdown of items, as well as disclosure requirements for management-defined performance measures that are not specified in IFRS accounting standards.<br>|
| **IFRS 19** | 1 Jan. 2027 | The new standard IFRS 19 'Subsidiaries without Public Accountability: Disclosures' permits certain subsidiaries to apply IFRS accounting standards with reduced disclosures. An entity may elect to apply IFRS 19 if it is a subsidiary (within the meaning of IFRS 10), does not have public accountability (is not a financial institution and not capital markets-oriented) and has an ultimate or intermediate parent that produces publicly available consolidated financial statements that comply with IFRS accounting standards.<br>|
| **IAS 21** | 1 Jan. 2027 | The IASB issued standard amendments to IAS 21 'Translation to a Hyperinfla- tionary Presentation Currency' in November 2025. This requires that amounts for translation from a non-hyperinflationary currency into a hyperinflationary one be translated at the exchange rate on the most recent reporting date, including the comparative figures. If the presentation currency is no longer hyperinflationary, the previous method is prospectively to be used without adjusting the comparative figures. The use of methods and changes to hyperinfla- tionary status are to be disclosed. There is an exception regarding currency translation for companies that apply IAS 29.<br>|

---

KfW does not intend to use the permitted early-application options of the standard amendments. These amendments are expected to have only minor effects, if any, on KfW's net assets, financial and earnings position. The introduction of IFRS 18 results in changes in the presentation and disclosure in the consolidated financial statements, relating in particular to future classification in the income statement, and will result in additional notes to the financial statements, primarily in connection with the requirements to disclose management-defined performance measures not specified by the IFRS Accounting Standards.

**(3) Changes to material accounting policies** 

There were no changes to material accounting policies in the reporting period.

**(4) Judgements and accounting estimates** 

The consolidated financial statements include amounts based on management's judgement and/or estimates and assumptions which are determined to the best of management's ability and in accordance with the applicable accounting standard. Actual results realised in a future period may differ from these estimates. Material judgements, estimates and assumptions are required, in particular, for calculating risk provisions (including risk provisions in the lending business), recognising and measuring provisions (primarily for pension liabilities and legal risks), measuring the fair value of financial instruments based on valuation models (including determining the existence of an active market), determining remaining terms of leases, assessing and measuring impairment of assets, and assessing the utilisation of deferred tax assets. The estimates and the assumptions underlying these estimates are reviewed on an ongoing basis and are based, among other things, on historical experience or expected future events that appear likely given the particular circumstances. Where judgements as well as estimates and their underlying assumptions were required, the assumptions made are explained in the relevant notes.

KfW Group does not expect any deviations from its assumptions and does not foresee any uncertainties in its estimates that could result in a material adjustment to the related assets and liabilities during the next

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financial year. Given the strong dependency on the development of the economy and financial markets, however, such deviations and uncertainties cannot be fully ruled out. These risks are nevertheless low because valuation models – especially those involving the use of inputs not based on observable market data – are employed to measure only small parts of receivables, securities, investments and borrowings measured at fair value, on the one hand, and only a small portion of financial derivatives used to economically hedge risk, on the other hand.

Risk provisions for performing loans (Stages 1 and 2) are calculated using risk parameters geared to regulatory and internal credit risk models for the parameterisation of probability of default ("PD"), loss given default ("LGD") and exposure at default ("EAD") and adjusted to meet IFRS 9 requirements.

The current geopolitical situation remains characterised by considerable uncertainty. Including a second adverse scenario in the calculation of risk provisions assumes an increased risk of sharply rising raw material and energy prices, extensive supply chain disruptions and an economic slump that could be triggered by escalating trade conflicts and geopolitical tension. The adverse scenario has been included as a post-model adjustment with a weighting of 45% (compared with 30% as of 31 Dec. 2024) since the first quarter of 2025, to reflect the greater forecast uncertainty. The heavier weighting resulted in an increase of EUR 46 million in risk provisions in 2025.

In addition to geoeconomic risks, climate-related risks, as a category of ESG risks, may also affect credit risk and thus risk provisions through various risk drivers.

Relevant ESG risk drivers are identified consistently throughout KfW Group using the ESG materiality assessment, and are taken in account in risk management via the ESG risk profile. They are also considered in the rating processes within non-retail business. In this process, the climate, environmental and social risks highlighted in the ESG risk profile indicate any necessary adjustment to the credit rating where they are not already adequately reflected. This procedure also applies for eligible personal collateral. In this way, relevant climate-related risks within ESG risks are taken into account in determining risk provisions in both the probability of default and loss given default.

In addition to individual consideration of each climate-related risk directly in the rating process, they are also included – if relevant – in the use of macroeconomic and other influencing factors in the point-in-time adjustment of probabilities of default; of particular note is the effect on transition climate risks on energy-intensive sectors. Climate-related risks may additionally appear as risk drivers in the second adverse scenario if significant impacts are expected in the short term.

Given that risk drivers in credit risk are subject to a complete analysis for the purpose of determining risk provisions, both the impacts of macroeoconomic factors in the base scenario and the adverse scenario are predominantly charcterised by geopolitical risks and impending trade conflicts in the current environment, and to a lesser extent by climate-related risks.

In addition to risk provisions, climate-related risks may also affect the calculation of fair value of the equity investments. If climate-related risks are known at the time of valuation, they are included in the calculation.

Please refer to the relevant sections of the combined management report (risk report) for further information on the consideration of ESG risks in risk management.

The Act for a Tax-Based Immediate Investment Programme to Strengthen Germany as a Business Location *(Gesetz für ein steuerliches Investitionssofortprogramm zur Stärkung des Wirtschaftsstandorts Deutschland)* provides for a gradual reduction in the corporation tax rate, currently 15% until 2027, to 10% by 2032. Determination of deferred taxes is to be based on the tax rate expected to be applicable at the time of reversal of temporary differences. The transition to the future tax rates primarily affects the deferred taxes of KfW IPEX-Bank, particularly pension provisions, loans and advances to customers and risk provisions, and to a lesser extent also Interkonnektor as regards valuations of equity investments and tax loss carryforwards.

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The effect of the reduction in the corporation tax rate from 15% (as of 31 Dec. 2024) to the future rates amounted to EUR 12 million as of 31 December 2025. The effects relate largely to the differences in measurement of statement of financial position items, and only to a small extent to tax loss carryforwards.

The ongoing tense geopolitical environment also had an impact on foreign exchange rates. Most importantly, this resulted in a significant devaluation of the US dollar, with corresponding effects on KfW Group's earnings position. An expansion of the hedging volume through EUR/USD currency forwards has been part of the active management of foreign currency risk since the fourth quarter of 2025.

The model-based approach to determining Other comprehensive income ("OCI") was further developed in financial year 2025 for fair value designated liabilities in line with the market standard (change in estimate). This involved, from April 2025 onwards, changing the parameter used to measure the KfW funding spread, from an almost risk-free reference curve (the synthetic EONIA) to the ESTR. This resulted in a one-time income statement effect of EUR –44 million in Net gains/losses from other financial instruments at fair value through profit or loss, split between certificated liabilities and liabilities to banks and customers, as well as in an increase in OCI in the same amount.

**(5) Group of consolidated companies** 

All significant subsidiaries, joint ventures and associated companies are included in the consolidated financial statements.

Subsidiaries are all business units (including structured entities) over which the group exercises control. Control exists when a group is exposed or entitled to variable cash flows through its relationship and has the opportunity to use its power of disposal to influence the amount of such cash flows. Subsidiaries are included in the consolidated financial statements (full consolidation) from the point at which control is transferred to the group. They are deconsolidated when control is lost.

Joint ventures and associated companies are included in the consolidated financial statements in accordance with IFRS 11/IAS 28 if a joint agreement is in place or the group has significant influence. Significant influence exists when KfW can participate in financial and business policy decisions regarding the associated company even if it does not have sole or joint control.

The composition of the group of consolidated companies has not changed since the consolidated financial statements as of 31 December 2024.

The composition of the group of consolidated companies is presented in the Notes under "List of KfW Group shareholdings".

**(6) Basis of consolidation** 

Consolidation involves revaluing the total assets and liabilities of the subsidiaries at the acquisition date, irrespective of the equity interest held, incorporating them into the consolidated statement of financial position and accounting for them in subsequent periods in accordance with the applicable standards. If the revaluation adjustments result in an excess compared to acquisition cost, this excess amount is capitalised as goodwill. No goodwill is currently recognised.

Any intercompany assets and liabilities as well as expenses and revenues from transactions between consolidated group companies are eliminated through debt consolidation, or earnings and expenses consolidation, respectively. Intercompany profits between fully consolidated companies are also eliminated.

Investments in associates and joint ventures are accounted for using the equity method. The group's share of the profits or losses of associates and joint ventures is recognised in the "Net gains/losses from investments accounted for using the equity method" line item in the income statement.

There are no minority interests within KfW Group.

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**(7) Financial instruments** 

**A. Classification and measurement** 

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The rules under IFRS 9 "Financial Instruments" serve as the basis for recognition and measurement of financial instruments.

Classification of financial assets at initial recognition thus determines their subsequent measurement. Classification and subsequent measurement of debt instruments is based on the business model and characteristics of the contractual cash flows (solely payments of principal and interest, or "SPPI" criterion). Equity instruments, on the other hand, must always be measured at fair value.

IFRS 9 distinguishes between four categories of measurement for financial assets:

1. At amortised cost;

2. At fair value through profit or loss ("FVTPL"), with the two sub-categories: mandatory and designated;

3. At fair value through other comprehensive income ("FVTOCI") with no recycling into profit or loss (not used in the group);

4. At fair value through other comprehensive income ("FVTOCI") with recycling into profit or loss (not used in the group).

Instruments are assigned to business models on a portfolio basis. IFRS 9 provides for three business models to manage financial assets:

1. Hold to collect – financial assets are held with the objective of collecting contractual cash flows.

2. Hold to collect and sell – financial assets are held with the objective of both collecting the contractual cash flows and selling the financial assets (not

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;used in the group).

3. Hold to sell – financial assets held with the objective of selling, or which do not fulfil the "hold to collect" or "hold to collect and sell" criteria.

The cash flow criterion is assessed for each individual financial asset as the second step. The cash flows of financial instruments are then checked for consistency with a basic lending arrangement and as to whether they thus constitute SPPIs on the outstanding loan balance. IFRS 9 defines interest as compensation for the time value of money and credit risk assumed, although it can also include a premium for liquidity risk. As is customary for the sector, compensation (e.g. for equity or administrative costs,) and a profit margin may also be included.

If payments contain payments beyond SPPIs, they must be measured at fair value. This also applies to non-recourse financing where the cash flows of the financed asset are increased or limited in such a way that they no longer constitute interest or principal payments in economic terms and the bank is consequently not exposed to a credit risk but rather to a project or investment risk.

A financing agreement condition does not affect classification if its effect on the contractual cash flows of the financial asset is only minor (de minimis). The group employs group-wide rules and a standardised classification of contractual covenants in assessing the SPPI criterion. For sustainability-linked loans in which the interest rate varies depending on compliance with defined ESG criteria, a de minimis threshold value is generally taken as the basis for assessing the SPPI criterion. The threshold value refers to the level of margin variability.

An assessment is made in non-recourse loans as to whether mitigation of the property or project risks creates a sufficient risk buffer and whether this then outweighs the credit risk.

A financial asset must have been allocated to a portfolio with the "hold to collect" business model and meet the cash flow criterion for measurement at amortised cost. The KfW business model is focused on a long-term sustainability approach. As the group does not enter into any transactions with the intention of generating a short-term profit, the Executive Board has decided on the "hold to collect" business model for

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all credit portfolios (except for the two cases mentioned below). Moreover, the group's lending business is largely consistent with the definition of a basic lending arrangement, and thus meets the SPPI criterion. The two exceptions to the "hold to collect" business model in the lending business are as follows:

Holding arrangements for the Federal Republic of Germany: Holdings KfW maintains by mandate for the Federal Republic of Germany are not subject to KfW management. Sales are to be executed upon the Federal Government's instruction. As KfW cannot assume that these positions will remain in the portfolio for the long term, it cannot assume a "hold to collect" intention. <br>

- KfW IPEX-Bank's syndication business: This business focuses on short-term sales and not on the objective of holding and selling the assets in equal measure.

Both cases of exception are assigned to the "hold to sell" business model. The holdings are measured at FVTPL.

Securities portfolios are also assigned to the "hold to collect" business model. This applies to the group's liquidity portfolio as well. As the group places minimum requirements on the ECB-eligibility of securities with regard to its liquidity portfolio, liquidity is secured by means of repo transactions. This therefore means that sales from the liquidity portfolio are unnecessary. The ancillary agreements are recorded and evaluated in the system to check the SPPI criterion. Securitisations are checked on a case-by-case basis to address the special rules for "contractually linked instruments". Consequently, the group's securities portfolios are largely measured at amortised cost using the effective interest method, as is its lending business.

The group's investments from equity finance are accounted for at fair value through profit or loss, as these are either equity instruments or debt instruments with no fixed interest or principal payments. The group does not exercise the option of FVTOCI for equity instruments.

Consequently, the group applies only the first two categories for financial assets: amortised cost and FVTPL.

IFRS 9 only provides for two categories for financial liabilities: amortised cost and FVTPL. Financial liabilities are accounted for at FVTPL if they are classified as held for trading (mandatory fair value) or assigned to this measurement category at initial recognition through application of the fair value option (designated fair value); otherwise, they are accounted for at amortised cost. The classification must be irrevocably determined at initial recognition. Reclassification is not permitted.

All non-derivative financial liabilities are held for non-trading purposes in the group. All non-derivative financial liabilities for which the fair value option has not been exercised are classified as liabilities at amortised cost. These are thus measured at amortised cost using the effective interest method. For the group, this category covers funding reported in Financial liabilities at amortised cost (Liabilities to banks, Liabilities to customers and Certificated liabilities). The fair value option is exercised for some structured liabilities such as promissory note loans (Schuldscheindarlehen) and certificated liabilities. This concerns liabilities with bifurcated structures as well as liabilities with non-bifurcated structures for which there is an accounting mismatch unless they meet the requirements for application of hedge accounting. In exercising the fair value option, valuation effects resulting from changes in own credit risk are recognised directly in equity in the revaluation reserve.

Derivatives are concluded solely for hedging purposes in the group and measured at FVTPL.

Derivatives are recognised as of the trade date, and all other financial assets as of the settlement date. They are derecognised when the contractual rights from the assets have expired, the power of disposal or control has been transferred, or a substantial portion of the risks and rewards has been transferred to a third party unrelated to KfW Group. Financial liabilities are derecognised if the obligations specified in the contract have been discharged or cancelled or have expired.

Financial instruments are initially recognised at fair value. Directly attributable transaction costs are included as incidental acquisition costs. Loans subsequently to be measured at fair value are an exception, with their transaction costs recognised directly.

Financial instruments subsequently measured at amortised cost are measured based on the fair value at initial recognition, taking into account any principal repayments, impairments, and where applicable,

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contractual amendments. The amortisation of premiums and discounts, transaction costs and fees is performed in accordance with the effective interest method on the basis of the contractual cash flows. Discounts are amortised in the promotional lending business until the end of the first fixed interest rate period (generally five to ten years).

Subsequent measurement at fair value for recognition in the financial statements or for the disclosure of financial instruments in the Notes is presented in Section D. "Fair value" below.

In accordance with Article 2 (4) of the KfW Law, the German Federal Government may mandate transactions to KfW on a case-by-case basis involving a public interest on the part of the Federal Republic of Germany. Such transactions are referred to as mandated transactions (*Zuweisungsgeschäfte*). This means that KfW is mandated by the Federal Government to enter into or acquire certain financial instruments. Both equity and debt instruments can be used for such purposes. Mandated transactions are accounted for by applying the generally accepted IFRS rules on additions and disposals, but also on the receipt of income.

Due to the supplemental agreements with the Federal Government often associated with mandated transactions, the disposal criteria and, in particular, the existence of on-lending agreements must also be checked. In addition, a review of the initial recognition of the relevant financial instruments must be conducted. On-lending agreements ensure that cash flows between KfW and the counterparty to a given agreement are ultimately passed on to the Federal Government. While the disposal criteria are normally not met with respect to debt instruments, they are generally met when applied to equity instruments, and the financial instrument is thus de-recognised immediately after initial recognition in the statement of financial position. Equity instruments resulting from mandated transactions are therefore not recognised in the financial statements, but are included in disclosures on trust activities in the notes. See section "Other notes", notes on "Trust activities and administered loans" and "Related party disclosures".

**B. Impairments** 

In the group, provisions for loan losses are accounted for in accordance with IFRS 9 requirements and applied to the following financial instruments:

- Loans and receivables as well as third-party securities measured at amortised cost;

- Loan commitments not measured at fair value through profit or loss;

- Financial guarantees not measured at fair value through profit or loss.

Impairments are calculated based on a three-stage model. All assets are assigned to Stage 1 at initial recognition and an impairment is calculated that is equivalent to the 12-month expected credit loss ("ECL").

The change in credit risk since initial recognition of a financial instrument is then used in determining the ECL. If there has been a significant increase in credit risk (Stage 2), or there are objective indications of impairment (Stage 3), ECLs are recognised as lifetime expected losses. If, in contrast, there has been no significant increase in credit risk, the financial instrument is still assigned to Stage 1 and only the ECLs for the term of the instrument resulting within the next 12 months from potential loss events are taken into account.

A lifetime ECL is recognised for financial instruments in Stage 2 as risk provisioning. This is based on risk parameters oriented to regulatory and internal credit risk models for parameterisation of probability of default ("PD"), loss given default ("LGD") and exposure at default ("EAD"). Interest income for financial instruments in Stage 2 is recorded using the effective interest method based on the gross carrying amount.

A lifetime ECL is also recognised for financial instruments in Stage 3 as risk provisioning. Assignment to Stage 3 and thus classification as impaired is undertaken in line with the group-wide default definition, which reflects the definition of "default of an obligor" in accordance with Article 178 of the Capital Requirements Regulation. The definition distinguishes between the 90 days past due and unlikely to pay criteria. A distinction is made in calculating impairment in Stage 3 between significant (non-retail) and non-significant (retail) financial instruments. Impairment for retail business in Stage 3 is calculated based on risk parameters and applying a PD of 1. Individual impairment is recognised for incurred losses and is computed on the basis of individual loans for significant portfolios in the lending business. The amount of the impairment loss equals the difference between the carrying amount of the loan and the present value of discounted expected future cash flows from interest, redemption payments and collateral cash flows.

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Any reversals of individual impairment losses are accounted for through profit or loss. Interest income for these financial instruments is recognised based on the net carrying amount.

In contrast to the lending business, expected losses for defaulted securities are not calculated based on cash flow but instead on market values in Stage 3. This is due to the assumption that the market value in the case of impairment is primarily influenced by credit rating factors.

Purchased or originated credit-impaired financial assets ("POCI") are not significant due to the group's business model. The group has therefore decided not to separately disclose these special requirements. If there are individual cases that meet the POCI definition, they are assigned to Stage 3 based on the default rating at the time of purchase.

In assigning an asset to a stage, the group uses a nuanced approach that takes both ratings and qualitative information into account.

It uses the change in the probability of default over the remaining term (lifetime PD) compared with the probability of default expected for this period at the time of initial recognition (forward lifetime PD) as a basis to assess whether a transaction can migrate from Stage 1 to Stage 2. This ensures that only transactions for which there is a significant deviation from the originally expected probability of default are transferred to Stage 2. Concessions (contractual modifications) made to the obligor for economic or legal reasons (forbearance), are also considered as a factor in transfer to a subsequent stage. KfW uses portfolio-level assessment (collective assessment) only in justified cases for risky portfolios.

As there is no individual rating specific to an obligor in the retail business, transfers from Stage 1 to Stage 2 are based on other credit deterioration indicators, such as negative factors or 30-days-past-due status.

The group does not exercise the option of waiving assessment on whether there has been a significant increase in credit risk, if the instrument is determined to have low credit risk at the reporting date (low credit risk exemption).

The IFRS 9 impairment model takes a symmetrical approach to migration, meaning that forward migration to Stage 2 or Stage 3 as well as reversion back from Stages 2 and 3 are possible. Periods of good conduct are defined for the retail business, based on previous past-due status (> 30 days) or default. These range from 90 days to two years, depending on the specifics of the case. This accounts for the fact that no rating-based transfer criterion is applied to the retail business, and therefore, for example, in the absence of a payment default (> 30 days) without a good conduct period, there would be an immediate reversion to Stage 1.

Expected credit losses for Stage 1 and Stage 2 and the retail business in Stage 3 are calculated based on individual transactions using statistical risk parameters. The regulatory and internal credit risk models for parametrisation of PD, EAD and LGD that are used in risk management serve as the basis for this calculation. These parameters are adjusted as appropriate to determine expected credit losses in accordance with IFRS 9. This approach makes it possible to apply a largely uniform credit risk modelling in line with regulatory, risk management and IFRS requirements even though they may individually differ somewhat in scope. Fundamentally, best estimate parameters are therefore used to determine the expected credit loss; margins of conservatism are not included. Downturn components are only taken into account in the risk parameters in crisis situations.

Calculation of one-year PD is based on the internal rating system, in which every exposure is assigned a PD score that corresponds to a rating scale of 18 levels for non-defaulted transactions and two levels for defaulted transactions. The lifetime PDs are derived from the one-year PD via migration matrices. For IFRS-9-compliant PD modelling, the internal credit risk parameters are adjusted by placing a greater weight on macroeconomic factors from a point-in-time perspective. The adjustment is made through segment and rating-specific modelling of PD premiums and discounts on regulatory PD (through-the-cycle PD). This is based on expert estimates of the economic situation of sectors and countries, with assessment of expected effects, taking into account forward-looking information. This approach differs for the retail business, for which premiums and discounts are calculated applying an expert model based on econometric factors.

LGD is the loss ratio that results in the event of default after taking collateral into account. In accordance with IFRS 9 impairment requirements, a multi-year view without taking internal costs into account is generally

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required. The regulatory LGD parameters are adjusted so that internal costs for IFRS 9 are not included in the calculation of expected credit losses.

The EAD for a given quantum of time corresponds to the loan drawdown expected at the time of default, taking into account additional drawings on open lines of credit. For the off-balance sheet portion, the expected drawdown is calculated based on credit conversion factors.

The macroeconomic information to be considered when calculating ECLs is included through both the point-in-time adjustment of the probability of default and a second macroeconomic scenario, in order to address forecast uncertainty in the current macroeconomic environment.

Risk provisions for on-balance sheet lending and securities business are deducted directly from the statement of financial position line item Financial assets at amortised cost. Risk provisions for the off-balance sheet lending business are accounted for on the liabilities side under Provisions (sub-item: Risk provisions for lending business).

Credit risks resulting from the on- and off-balance sheet lending business and from financial assets measured at amortised cost are accounted for through impairments recognised in profit or loss in the amount of the one-year expected credit loss (Stage 1) or the lifetime expected credit loss (Stage 2 and Stage 3). Additions to and reversals of risk provisions are recognised in Net gains/losses from risk provisions in the income statement.

An asset is written off in the event that it, or a portion thereof, is estimated as irrecoverable. In the non-retail business, this is not performed until there is no longer a prospect of recovery, as, for instance, all collateral has been realised or, in the event of insolvency, creditor quotas have been distributed or insolvency proceedings have been discontinued for lack of assets. Write-offs in the retail business are performed pursuant to defined criteria such as insolvency or a fixed default period, which are both related to termination of the loan. Recovery is pursued as long as it is economically viable.

In the case of a write-off, the gross carrying amount is reduced by the amount of the write-off. Current provisions for loan losses are utilised first, and any remaining amount is written off directly. Similar to recoveries on loans already written off, this direct write-off is also reported through profit or loss in the Net gains/losses from risk provisions item.

**C. Contractual modifications** 

Contractual modifications are credit rating or market-induced adjustments to contractual cash flows. By contrast, an adjustment of contractual payments agreed at the time the contract was concluded is not deemed a contractual modification.

Substantial contractual modifications result in derecognition of financial assets even if the same or the modified contract legally remains valid. The modified financial instrument is treated in accordance with IFRS 9 as a new contract and reclassified on the basis of classification criteria. Derecognition resulting from substantial modification is not relevant for the "hold to collect" business model.

There is no write-off for non-substantial contractual modifications. Instead, the gross carrying amount is adjusted to the present value of the modified cash flows calculated using the original effective interest rate. This valuation difference is recognised in profit or loss as a modification gain or loss and amortised through net interest income on subsequent reporting dates.

The modification list serves as the group-wide basis for identification of relevant contractual modifications. This distinction between substantial and non-substantial modification is normally made based on qualitative criteria such as contractual amendments that result in a violation of the cash flow criterion within the meaning of IFRS 9 4.1.1(b).

In the event of a non-substantial modification, an assessment must be made of whether the credit risk has increased significantly and whether a stage transfer may consequently be necessary. This ensures that a credit risk-related contractual modification triggers an ad hoc rating as an early warning signal or at least a documented review of the need for an ad hoc rating in accordance with requirements for early detection of risks. This current rating is taken into account accordingly in the assignment to stages.

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**D. Fair value** 

Subsequent measurement at fair value, which, depending on the measurement category, is regularly determined either for recognition in the statement of financial position or for the disclosure of financial instruments in the Notes, is based on the following hierarchy at KfW Group:

***Active market – allocation to level 1 (Quoted market price)***

The best objective evidence of fair value is provided by published price quotations in an active market. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available and those prices represent current – i.e., traded on the date of conclusion or shortly before – and regularly occurring market transactions on an arm's length basis. Together with the traded nominal volumes, the contract sizes and the number of contracts, this assessment takes into account in particular the bid-ask spreads observed which in the event of a significant increase indicate the absence of an active market.

***No active market – allocation to level 2 (Valuation methods based on observable market data [model]) or level 3 (Valuation methods based in part on data not observable in a market)***

If the financial instrument is not quoted in an active market, valuation techniques are used. The valuation techniques applied include, in particular, the discounted cash flow ("DCF") method and option pricing models, as well as a comparison to the fair value of a financial instrument with almost identical characteristics (e.g., multiple-based models). The valuation techniques take account of all input parameters that the market participants would include in the pricing of that financial instrument, e.g., market interest rates, risk-free interest rates, credit spreads or swap curves. As these input parameters can generally be observed in the market and are usually the only significant parameters for measuring financial instruments using valuation techniques, the level for the financial instruments measured at fair value using valuation methods is usually level 2. This allocation also generally applies for prices quoted on inactive markets published by price service agencies.

If significant input parameters that are not observable on the market, such as expected risk-free customer margins or capital costs, are used in valuation techniques, the financial instrument is allocated to level 3.

If, at the date of initial recognition, differences arise between the market-based transaction price and the model price resulting from a valuation technique that makes significant use of unobservable parameters, an analysis is performed to determine whether there are economic reasons for these initial differences (e.g. conclusion of a transaction on a market that is not the main market for this transaction). These economic reasons only apply to a small part of the derivative portfolio of KfW Group, which comprises a hedging instrument for customers with respect to the export and project financing business. In relation to this, OTC (over the counter) derivatives in line with the market are not concluded on the main market (OTC interbank market) relevant to valuation. The initial differences determined upon conclusion of these derivatives are amortised through profit or loss over the life of the financial instruments, as the valuation parameters unobservable on the market are relevant to the valuation procedure. The reliability of this valuation technique is ensured via regular model validations.

This (valuation) hierarchy is applied in the group as follows:

Fair values are derived from active markets, in particular, for bonds and other fixed-income securities – unless there are inactive markets, and valuation techniques or prices quoted on inactive markets published by price service agencies are therefore used – as well as own issues reported on the liabilities side. Valuation techniques for non-derivative financial instruments are used primarily for products reported under Financial assets at fair value (loans and advances to banks, loans and advances to customers, and equity investments) and Financial liabilities at fair value (liabilities to banks, liabilities to customers, and certificated liabilities). Valuation techniques are also used for OTC derivatives.

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The steps detailed below are taken for certain product groups:

For securities in the Securities and investments line item, the group examines whether a financial instrument is quoted on an active market on the basis of homogeneous portfolios. Market activity is assessed based on the following criteria:

– There is more than one market maker.

– Prices are set on a regular basis.

– Prices deviate only slightly between market makers.

– The bid-ask spread is narrow.

Prices on active markets are used to determine the fair value of the group's asset securities as of the reporting date. In addition, for parts of the portfolio, prices from price service agencies are used that do not qualify as prices quoted on active markets. Should these not be available in individual cases, valuation techniques are used to determine fair value taking into account observable market parameters. The input parameters include, in particular, changes in creditworthiness and risk-free interest rates, but they also take into account general and financial instrument-specific tightening of the market due to lower liquidity.

In measuring OTC derivatives, valuation adjustments are determined for counterparty risks (credit valuation adjustments), own default risk (debt valuation adjustments), collateral costs under credit support annexes, collateral valuation adjustments and funding cost adjustments ("FCA"). KfW's institute-specific funding costs are used to calculate the FCA. Value adjustments are not calculated separately for each transaction but for the portfolio of transactions on which a framework agreement is based. The allocation to individual transactions is based on the relative credit adjustment approach. The resulting adjustment amounts are very low as KfW generally pledges collateral for positive market values in accordance with standard market collateral agreements. In accordance with market practices, risk-free overnight interest rates are used for the valuation of the derivatives portfolio.

The fair value of Loans to banks and customers is calculated using the DCF method based on the discounting of the risk-adjusted cash flows. The expected loss calculated for the respective reporting date is used to correct the contractual cash flows.

The holding arrangements for the Federal Republic of Germany (*Platzhaltergeschäfte*) are accounted for as receivables from the Federal Government. The receivables comprise the KfW-funded purchase price of the assets held for the Federal Republic of Germany as well as additional benefit from the sales proceeds of the assets. The receivables are measured at fair value, with the additional benefit being accounted for as a key value driver using current market prices of the assets held.

The valuation of equity investments is often based on generally accepted standard methods such as the DCF method for valuation of direct investments and the net asset value method for fund investments. The procedure used in the past in the equity investment environment of DEG and Capital has been refined, particularly with a view to the measurement of fund investments at fair value. Because the funds provide the net asset values at a later point in time, there is a three-month time lag between the group's reporting date (31 December 2025) and the reporting date for the funds (30 September 2025). Measures are therefore being taken to minimise this time lag by looking through the investments as of the group's reporting date and taking into account additional information at the level of the investments in the valuation as of the reporting date.

Plausibility checks also continue to be conducted on fund valuations to ensure the quality of the reported net asset values. These include, among other things, quality assurance measures such as standardising valuations for identical investments in different funds and analysing changes in value of the investments within the fund over time.

The Federal Republic of Germany's liability for specific KfW liabilities in accordance with Article 1a of the KfW Law has an advantageous effect on KfW's ability to refinance itself. In determining the fair value of KfW's liabilities, the effect of this explicit direct state guarantee is also taken into account. The state guarantee does not represent an independent unit of account.

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The fair value of financial instruments due on demand, such as cash reserves or receivables and liabilities due on demand, is their carrying amount.

When no prices from liquid markets are available and prices on inactive markets cannot be provided by price service agencies, recognised valuation models and methods are used. The DCF method is used for securities, swaps, and currency and money market transactions with no embedded options or complex coupons. Stand-alone options, as well as derivatives with embedded options, triggers, guaranteed interest rates and/or complex coupon agreements, are measured using recognised models (e.g., Hull & White) unless they are listed on a stock exchange.

The aforementioned models are calibrated, if possible, on the basis of observable market data for instruments that are similar in terms of the type of transaction, maturity, and credit quality.

**E. Financial guarantee contracts** 

A financial guarantee contract is a contract that requires the guarantor to make specified payments that compensate the holder for a loss it incurs because a specified debtor fails to meet its contractual payment obligations. For the guarantor, a financial guarantee contract is to be measured at fair value at initial recognition, which is zero at contract conclusion, as the value of the premium on fair value contracts is equal to the value of the guarantee obligation (net presentation). Moreover, fair value at initial recognition is no longer carried forward in such net presentation, but rather incoming premium payments are recognised through profit or loss in Net commission income. If a financial guarantee contract is not designated to the fair value measurement category at initial recognition, a provision is recognised for expected losses from a financial guarantee as part of a subsequent assessment, applying IFRS 9 rules for risk provisioning. The group does not voluntarily designate financial guarantee contracts for measurement at fair value.

For the holder, on the other hand, this is a contingent asset that may not be capitalised. However, a (non-impaired) financial guarantee contract is, for the holder, collateral that may be included in calculating risk provisions for the recognised reference asset.

Provisions for expected losses from financial guarantees are reported under Provisions for credit risks.

KfW also uses financial guarantee instruments via both public and private credit agencies as collateral for loans. Due in particular to its role as partner institution for government programmes, KfW uses both federal guarantees and guarantees from the EU's EFSD+ (European Fund for Sustainable Development) programme in its global activities.

KfW assumes the role of protection seller in its loan programmes by assuming credit risks in the form of risk sub-participations and financial guarantees.

**F. Reporting and Notes** 

Current interest and similar income from a financial asset are generally recorded under Interest income. If, due to the low interest environment, negative interest rates arise from a financial asset, these are also recorded in Interest income, with a minus sign. Premiums, discounts, processing fees and charges are amortised in Interest income using the effective interest method. Processing fees that are not amortised under the effective interest method are recognised under Commission income.

Any fair value changes of financial assets at fair value through profit or loss are recognised in Net gains/losses from other financial instruments at fair value through profit or loss.

Current interest arising from a financial liability is recorded in Interest expense. This also applies in the case of negative interest resulting from an environment. Premiums and discounts are also amortised in Interest expense using the effective interest method over the expected life.

Results from the repurchase of own issues categorised as liabilities measured at amortised cost are recognised at the repurchase date in Net other operating income.

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Classes for financial instruments have been largely defined in agreement with the group's business model which is focused on the lending business. The definition is based in particular on the national requirements for balance sheet classification at banks and financial services institutions. The following classes (and sub-classes) were defined for financial assets and financial liabilities:

**Transition of the statement of financial position items for financial instruments to classes in accordance with IFRS 7.6** 

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|:---|:---|:---|
| <br> **Statement of financial position item** | **Class** | **Sub-class** |
| Financial assets<br> at amortised cost | *Loans and advances to banks* | <br> Money-market transactions |
| Financial assets<br> at amortised cost | *Loans and advances to banks* | Loans and advances |
| Financial assets<br> at amortised cost | *Loans and advances to banks* | Promissory note loans |
| Financial assets<br> at amortised cost | *Loans and advances to banks* | Other receivables |
| Financial assets<br> at amortised cost | *Loans and advances to customers* | Money-market transactions |
| Financial assets<br> at amortised cost | *Loans and advances to customers* | Loans and advances |
| Financial assets<br> at amortised cost | *Loans and advances to customers* | Promissory note loans |
| Financial assets<br> at amortised cost | *Loans and advances to customers* | Other receivables |
| Financial assets<br> at amortised cost | *Securities and investments* | Bonds and other fixed-income<br> securities |
| Financial assets at fair value | *Loans and advances to banks* | Money-market transactions |
| Financial assets at fair value | *Loans and advances to banks* | Loans and advances |
| Financial assets at fair value | *Loans and advances to banks* | Promissory note loans |
| Financial assets at fair value | *Loans and advances to banks* | Other receivables |
| Financial assets at fair value | *Loans and advances to customers* | Money-market transactions |
| Financial assets at fair value | *Loans and advances to customers* | Loans and advances |
| Financial assets at fair value | *Loans and advances to customers* | Promissory note loans |
| Financial assets at fair value | *Loans and advances to customers* | Other receivables |
| Financial assets at fair value | *Securities and investments* | Bonds and other fixed-income securities |
| Financial assets at fair value | *Securities and investments* | Shares and other non-fixed income securities |
| Financial assets at fair value | *Securities and investments* | Equity investments |
| Financial assets at fair value | *Securities and investments* | Shares in non-consolidated subsidiaries |
| Financial assets at fair value | *Other derivatives* | Interest-related derivatives |
| Financial assets at fair value | *Other derivatives* | Cross-currency derivatives |
| Financial assets at fair value | *Other derivatives* | Other derivatives |
| Financial liabilities<br> at amortised cost | *Liabilities to banks* | Money-market transactions |
| Financial liabilities<br> at amortised cost | *Liabilities to banks* | Promissory note loans |
| Financial liabilities<br> at amortised cost | *Liabilities to banks* | Other financial liabilities |
| Financial liabilities<br> at amortised cost | *Liabilities to customers* | Money-market transactions |
| Financial liabilities<br> at amortised cost | *Liabilities to customers* | Promissory note loans |
| Financial liabilities<br> at amortised cost | *Liabilities to customers* | Other financial liabilities |
| Financial liabilities<br> at amortised cost | *Certificated liabilities* | Money-market issues |
| Financial liabilities<br> at amortised cost | *Certificated liabilities* | Bonds and notes |
| Financial liabilities<br> at fair value | *Liabilities to banks* | Money-market transactions |
| Financial liabilities<br> at fair value | *Liabilities to banks* | Promissory note loans |
| Financial liabilities<br> at fair value | *Liabilities to banks* | Other financial liabilities |
| Financial liabilities<br> at fair value | *Liabilities to customers* | Money-market transactions |
| Financial liabilities<br> at fair value | *Liabilities to customers* | Promissory note loans |
| Financial liabilities<br> at fair value | *Liabilities to customers* | Other financial liabilities |
| Financial liabilities<br> at fair value | *Certificated liabilities* | Money-market issues |
| Financial liabilities<br> at fair value | *Certificated liabilities* | Bonds and notes |
| Financial liabilities<br> at fair value | *Other derivatives* | Interest-related derivatives |
| Financial liabilities<br> at fair value | *Other derivatives* | Cross-currency derivatives |
| Financial liabilities<br> at fair value | *Other derivatives* | Other derivatives<br>|

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In addition, the items from the asset and liability sides of the statement of financial position, Value adjustments from macro fair value hedge accounting, Derivatives designated for hedge accounting, and Off-balance sheet transactions each form a separate class.

The Loans and advances to banks class primarily consists of the promotional lending business, in which loans are typically granted to the final borrowers through accredited commercial banks. These assets are presented in this class when the commercial banks underwrite part of the liability. Promotional loans that commercial banks on-lend without underwriting of liability are recognised in the class Loans and advances to customers.

The Loans and advances to banks and Loans and advances to customers classes also include loans that benefit from a subsidy (interest rate reductions) granted by KfW under the European Recovery Program ("ERP") economic promotion programme. The promotional grants awarded annually to KfW through the ERP Special Fund based on the ERP Economic Planning Act (*ERP-Wirtschaftsplangesetz*) for the purpose of executing the ERP economic promotion programme are recognised as deferred income in other liabilities and are amortised in profit or loss under Interest income as the underlying funding expenses occur.

The Securities and investments class mainly comprises bonds and other fixed-income securities held in securities portfolios that belong to KfW and its subsidiaries, along with equity investments.

The securities portfolios mainly serve to support KfW's liquidity position and to stabilise and ensure the group's promotional capacity in the long term.

To achieve the same accounting treatment for equity investments with and without significant influence, individual group business areas that provide equity finance as part of their promotional mandate are considered as venture capital organisations for accounting purposes provided, they meet the respective requirements (DEG and KfW Capital). These equity investments, like other equity investments, are allocated to the Securities and investments class.

The Liabilities to banks and Liabilities to customers classes largely comprise KfW Group borrowings and money-market transactions.

Issued bonds, notes and money market securities are allocated to the Certificated liabilities class. Own issues repurchased in the open market are deducted from the liabilities as of the repurchase date.

In some of the Notes, these classes are broken down into additional sub-classes that relate mainly to products (for example, Loans and advances to banks are reported separately for money-market transactions and loans and advances).

Information about the type and extent of risks associated with financial instruments is also provided in the risk report section of the combined management report.

**(8) Derivatives and hedging relationships** 

**A. Hedging transactions / Hedge accounting** 

KfW Group enters into financial derivatives to economically hedge interest rate fluctuation and currency risks, particularly those related to funding, lending and securities activities. Interest rate swaps, interest rate/currency swaps and base currency swaps are mainly used for this purpose. Interest rate swaps are used to convert fixed rate interest payments of the issuances or lending transactions into variable payments. In the case of refinancing in a foreign currency, payments are also converted into the functional currency (EUR). The hedge ratio for the issues is normally 1:1. Ineffectiveness therefore results exclusively from unhedged risks such as counterparty risk or tenor or basis spread risks.

Economic hedging relationships are designated as hedge accounting relationships or designated as fair value through profit or loss by using the fair value option when the IFRS requirements are met. Economic hedging relationships can also be recognised in the financial statements through bifurcation of separable embedded derivatives on the liabilities side that are accounted for through profit or loss. In these cases, if the hedges are

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economically effective, the impact on the financial statements, with respect to the hedged risks, from the instruments used for hedging purposes and the hedged transactions will substantially offset each other, so that the group's income statement substantially reflects the risk-mitigating impact of these hedging relationships.

However, not all economic hedging relationships qualify for hedge accounting or the fair value option. In these cases, the risk-mitigating impact of the derivatives used for hedging purposes is not reflected in the accounts because the hedged risk associated with the underlying transactions is not recognised in profit or loss under IFRS. The applicable recognition requirements may therefore lead to one-sided valuation results from the derivatives used for hedging purposes in the group's income statement – as well as volatility in profit or loss – despite an economically effective hedging relationship.

Hedge accounting in the group is used solely in the form of fair value hedges to recognise economic hedging relationships. The hedging relationship is designated, firstly, at individual transaction and group level in the form of micro fair value hedge accounting, and, secondly, at portfolio level in the form of macro fair value hedge accounting. The group has exercised the option of applying IAS 39 rules for hedge accounting. If risk-free overnight interest rates are used in the valuation of the derivatives, this market practice is also subject to micro fair value hedge accounting for the measurement of the hedged risk related to the hedged item. The hedged risk in macro fair value hedge accounting generally relates to the variable interest rates of the derivative portfolio. The effectiveness of the hedging relationships is assessed using the dollar offset method and a regression analysis (80%–125% range for assessing effectiveness).

In micro fair value hedge accounting, interest and currency risks from bonds allocated to Securities and investments (in the Financial assets at amortised cost item) and, above all, from borrowings (in the Financial liabilities at amortised cost item) are hedged. In micro fair value hedging relationships at individual transaction level, the fair value changes attributable to the hedged risks are reported as an adjustment of the carrying amount of the hedged items with the corresponding gain or loss recognised under Net gains/losses from hedge accounting. The hedging instruments used for this purpose are recognised at fair value in Derivatives designated for hedge accounting. Changes in the value of the hedging instruments are also recognised in Net gains/losses from hedge accounting, largely compensating the profit or loss effects of the hedged items.

Macro fair value hedge accounting is used to hedge against interest risks primarily from loan receivables (in the Financial assets at amortised cost item) and firm obligations via future fixed-rate financing that are hedged against interest risks as part of dynamic asset liability management in the group. The fair value changes attributable to the hedged risks in the hedged portfolios in the Amortised cost category (loans and advances / liabilities) are accounted for in Value adjustments from macro fair value hedge accounting on the assets or liabilities side. Fair value changes attributable to the hedged risks from the hedged portfolios are reported in Net gains/losses from hedge accounting.

The hedging instruments are reported at fair value in Derivatives designated for hedge accounting. Changes in the value of these instruments are also recognised in Net gains/losses from hedge accounting, with the effect that they almost fully offset the earnings effects from the valuation of the hedged portfolios.

The portfolio of hedged items is updated monthly in the context of a dynamic hedge de-designation and designation process. The resulting fair value adjustments are amortised over the residual term of the maturity period in Net gains/losses from hedge accounting. Disposals from the hedged portfolios result in a proportional amortisation of the related fair value adjustments in Net gains/losses from hedge accounting. When cash flows from hedging instruments are derecognised while the economic hedge based on non-derivative financial instruments remains, the related fair value adjustments from the hedged portfolios are amortised in Net interest income.

If the strict hedge accounting requirements for the designation of hedging relationships between derivatives and financial assets/liabilities are not fulfilled within KfW Group, the fair value option is used in certain circumstances. The fair values of the hedging instruments are presented in Financial assets at fair value or Financial liabilities at fair value, and the changes are presented in Net gains/losses from other financial instruments at fair value through profit or loss. These are largely offset by valuation effects from the hedged transactions. Fair value changes in liabilities resulting from changes in KfW's own credit risk are directly recognised in OCI.

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Further derivative financial instruments are used to hedge risks, but their economic hedging relationships are not reflected in the accounts. The fair values of these hedging instruments are also presented in Financial assets at fair value or Financial liabilities at fair value, and the changes are presented in Net gains/losses from other financial instruments at fair value through profit or loss.

KfW Group neither uses derivatives for trading purposes nor enters into derivatives acting as a broker or intermediary on behalf of third parties.

**B. Embedded derivatives** 

Derivative financial instruments can be part of a hybrid (combined) financial liability as embedded derivatives. Under certain conditions, they are accounted for separately from the host contract, similar to stand-alone derivatives. They must be bifurcated if the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract. The host contract is accounted for according to its classification at inception.

KfW Group enters into contracts with separable embedded derivatives particularly with respect to its own funding. In the case of these products, the embedded derivatives must be bifurcated and recognised separately. Changes in fair value are then recognised in Net gains/losses from other financial instruments at fair value through profit or loss in the sub-line item Financial derivatives not qualifying for hedge accounting, where they have a compensatory effect on the valuation of the economic hedging derivatives.

The fair value option was selected for certificated liabilities with bifurcated (embedded) derivatives recorded prior to bifurcation.

**(9) Offsetting of financial instruments** 

KfW uses the EUREX central clearing system to settle some of its derivative transactions. This form of settling derivative transactions results in the recognition of a net amount in the statement of financial position for the transactions affected, as the involvement of EUREX as the central counterparty (CCP) meets all of the requirements for offsetting as set out in the relevant IFRS standard. This means that positive and negative fair values of derivatives for which EUREX acts as the central counterparty are offset against the corresponding collateral and reported in a net item in the statement of financial position.

In the case of reverse repo and repo transactions, for which EUREX acts as the central counterparty, receivables and liabilities are also offset if the currencies and the value dates are the same.

In addition, framework agreements featuring netting agreements are in place between KfW and its business partners for OTC derivatives and securities repo transactions.

One form of netting is close-out netting, which provides for the elimination of all rights and obligations relating to individual transactions under the framework agreement upon termination of said framework agreement by the contractual partner, or upon the latter's insolvency, with the rights and obligations replaced by a single compensation claim (or obligation) in the amount of the net replacement costs of the terminated individual transactions. This does not represent a present legal claim for offsetting.

Close-out netting is not to be confused with the offsetting of payments in the ordinary course of business. The same framework agreement may provide for the latter, i.e., that payments due on the same day and in the same currency may be offset and a net payment made instead of each individual payment (payment netting). This represents a present legal claim for offsetting.

KfW's framework agreements relating to bilateral OTC derivatives (not in central clearing) generally include close-out netting agreements with the business partners. Payment netting is limited in the agreement to the relevant individual transaction, so that multiple transaction payment netting does not occur. The requirements for offsetting financial assets and financial liabilities are therefore not met for these KfW OTC derivatives.

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KfW's framework agreements for repo transactions include close-out netting agreements and, in some cases, payment netting agreements with the business partners as well. However, as KfW does not, as a rule, perform multiple transaction payment netting with repo transactions, the requirements for the offsetting of financial assets and financial liabilities are not met for such KfW repo transactions.

In accordance with the collateral agreements concluded for OTC derivatives and repo transactions, the values of the available collateral are used in determining the single compensation claim (or obligation) in close-out netting. Both cash and securities are permitted forms of collateral under the existing collateral agreements between KfW and its business partners. The collateral agreements provide for a transfer of title in the case of securities as collateral. Consequently, the transferred securities are not subject to any selling or pledging restrictions.

**(10) Foreign currency translation** 

The functional currency of KfW and its consolidated subsidiaries is the euro. Monetary assets and liabilities denominated in a foreign currency are converted at the spot rate as of the reporting date.

Non-monetary assets and liabilities denominated in a foreign currency are normally converted at historical rates if they are measured at (amortised) cost. Currency translation is based on the European Central Bank reference rates.

The changes in value resulting from foreign currency translation are reported in the income statement under Net gains/losses from other financial instruments at fair value through profit or loss.

**(11) Revenue from contracts with customers** 

IFRS 15 defines the nature, amount and timing of revenue arising from contracts with customers. Such revenue includes fees which are not an integral part of the effective interest rate and which are reported under Commission income. In this context, a five-step principle-based model is to be applied to relevant customer contracts. Moreover, the Notes are to include comprehensive detailed quantitative and qualitative information. IFRS 15 does not apply to fees and charges that are an integral part of the effective interest rate as they fall under the scope of IFRS 9.

There are primarily mandate contractual arrangements with the Federal Government as contracting authority within the meaning of IFRS 15. They include fees for the administration of German Financial Cooperation for the promotion of developing countries and emerging economies, fees for the administration of certain programmes subsidised by the Federal Government, and fees for debt collection on certain loans. The group also charges fees for administrative services for other mandate agreements as well as for processing services and for services for lending and trust activities. Individual services may be grouped together into a bundle of services that qualifies as a separate performance obligation within the meaning of IFRS 15. The value of the transaction is therefore not broken down.

As performance obligations are mostly satisfied over time, revenue from customer contracts is recognised according to the measure of progress and is thus normally recognised over time.

KfW Group has no items that require recognising customer acquisition or contract fulfilment costs as assets. One-time advance payments to be allocated are deferred and recognised as contract liabilities in the statement of financial position under Other liabilities.

If the service has already been performed but fees have not yet been paid or if there is not yet any claim to payment, a contract asset is to be recognised in the statement of financial position under Other assets. If the claim becomes unconditional, the contract asset is to be reclassified as a Trade receivable adjusting the carrying amount where applicable. This rule is applied to fees for administration of certain programmes subsidised by the Federal Government. Based on the very good credit rating and short remaining life, no expected credit loss is calculated.

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**(12) Promotional lending business at KfW** 

The general promotional loans market, which distinguishes itself from the market for general lending business, is relevant for KfW's promotional lending business conducted as part of its legal promotional mandate. This market is characterised by the fact that promotional banks, as part of their legal mandate, pass on all funding advantages to the ultimate borrowers in financing projects eligible for promotion. In setting the terms and conditions of the corresponding promotional loans, KfW uses its current term-differentiated refinancing rates.

At initial recognition of such loans, the fair value is thus equivalent to the transaction value.

KfW also grants promotional loans which include additional subsidies granted during the first fixed interest rate period, in the form of interest rate reductions impacting KfW's earnings position. The fair value of these promotional loans – measured using the parameters of the general promotional loan market – is thus not equivalent to the transaction value at initial recognition as in this case the interest rate is below the market rate.

The difference that normally results from such loan commitments – present value of the nominal scheduled interest rate reductions during the first fixed interest rate period – is recognised in profit or loss as an interest expense and accounted for as an adjustment to the carrying amount in loans and advances under the item Financial assets at amortised cost. The adjustment to the carrying amount is amortised in Net interest income using the effective interest rate method. In the event of unscheduled repayment in full, this is recognised in profit or loss under Interest income.

Differences that relate to irrevocable loan commitments are reported in Provisions. Changes to the portfolio are offset via the adjustments to the carrying amounts of already disbursed promotional loans recognised on the assets side.

In certain circumstances, KfW can agree with the shareholder ERP Special Fund on an obligation for future grants under ERP programmes. This obligation is recognised at the time of the contractual agreement as a provision with a negative impact on the current earnings position, and is utilised in subsequent years for specific grants under ERP programmes. The requirements for such obligations are reviewed annually before year-end and presented to the Executive Board for decision.

**(13) Non-current assets held for sale** 

Under IFRS 5, separate presentation and measurement requirements apply to non-current assets held for sale if the assets are available for immediate sale and such sale is highly probable. Assets that meet the IFRS 5 criteria are reported in the separate statement of financial position item: Non-current assets held for sale. The IFRS 5 measurement requirements are not applied if they relate to financial assets. In this case, the IFRS 9 measurement requirements continue to apply instead.

**(14) Repurchase agreements** 

KfW Group enters into repurchase agreements as standardised repos or reverse repos. These are combinations of simultaneous spot and forward transactions on interest-bearing securities with the same counterparty. The terms and modalities of collateral and its use follow common market practice. Credit claims are also an eligible type of collateral for open-market transactions.

The interest-bearing securities sold under repo transactions (spot sales) continue to be recognised and measured under Financial assets at amortised cost. The repayment obligation towards the counterparty is carried under Financial liabilities at amortised cost for the amount of cash consideration received. The repo rate as a fee for borrowing is recorded by the group, as the borrower, under Interest expense over the term of the agreement. The borrower is entitled to the coupon on the security. A repayment claim is recognised and measured under Financial assets at amortised cost for the amount of cash outflow generated by reverse repos. The securities received (spot purchases) are not recognised or measured. The repo rate as a fee for lending is recorded in the group as the lender under Interest income over the term of the agreement.

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**(15) Property, plant and equipment** 

The land and buildings and the plant and equipment reported by KfW Group are carried at cost less depreciation on a straight-line basis and any impairment, both recognised in Administrative expense. In accordance with the requirements in IAS 36, an impairment is recognised if there are indications of impairment and the carrying amount of the asset exceeds the recoverable amount, i.e., the lower of fair value less costs of disposal and value in use. The useful life is determined based on expected wear and tear. KfW Group assumes an estimated useful life of 40 to 50 years for buildings, four years for workstation computer equipment and five to 15 years for other property, plant and equipment. Gains and losses from the sale of property, plant and equipment are recognised in Net other operating income.

Payments in advance and assets under construction are recognised in Other property, plant and equipment and are not subject to depreciation.

**(16) Leases** 

In accordance with IFRS 16 "Leases", KfW as lessee reports each right of use in Property, plant and equipment and the associated lease obligation in Other liabilities. The lessee measures lease liabilities at the present value of the lease payments not paid at that date, discounted at the lessee's incremental borrowing rate. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. Accordingly, KfW determines the incremental borrowing rate of the basis of the refinancing rate it uses for its own issues.

KfW applies IAS 36 "Impairment of Assets" to rights of use to determine whether the right of use is impaired and to recognise any impairment loss identified. Depreciation, amortisation and impairments of rights of use are reported in Administrative expense. Interest expense from discounting the rights of use and the interest compounded on lease liabilities are included in Other interest expense.

The effects on net assets, financial and earnings position, which are minimal, arise only from the "leasing buildings" class.

For short-term leases with a maximum term of 12 months and leases in which the underlying asset is of low value, KfW uses the relief provided for in IFRS 16.5 and does not recognise a right of use.

The small number of contracts in which KfW Group acts as a lessor are classified as operating leases. The leased asset is recognised under Property, plant and equipment and the corresponding rental income in Other operating income.

**(17) Intangible assets** 

Under Intangible assets, KfW Group reports purchased and internally generated software at cost, less straight-line amortisation and impairments, both recognised in Administrative expense. The useful life is determined based on expected wear and tear. KfW Group assumes a useful life of five years.

Assets are impaired when the carrying amount of an asset exceeds the recoverable amount. An impairment is recorded when no future economic benefits can be identified.

Internally generated software under development is reported under Other intangible assets and is not subject to amortisation.

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**(18) Risk provisions** 

Provisions include provisions for pensions and similar commitments, credit risks, interest rate reductions in irrevocable loan commitments granted by KfW in the promotional lending business and negatively affecting its earnings position, as well as other obligations of uncertain amount and timing involving a probable outflow of funds.

The employees of the group participate in a company pension plan that pays retirement, long-term disability and survivor benefits. KfW Group has various pension plans, consisting exclusively of defined-benefit schemes. The benefits largely depend on the length of company service and salary. The pension plan that was applied for new hires until 1985 offered a full pension (*Gesamtversorgung*), in which a certain portion of the income paid before the benefits were due was allocated as a benefit after deducting the state pension. Apart from employer-financed pension plans there are also plans in place involving contributions by employees.

The group pension plans are subject to the following risks in particular: longevity, interest rate fluctuation, pension adjustment risk as well as the risk of future changes to the assessment bases.

Longevity risk is the risk that higher expenses will be incurred for the company pension plan if the pensioners live longer than projected. In general, this risk is balanced out across all pensioners and would only have an impact if life expectancy were to rise faster in the future than anticipated.

Due to the long term of the company pension plan, provisions for pension obligations are subject to general interest rate fluctuation risks.

Pension adjustment risk largely relates to the pension plan offering a full pension (*Gesamtversorgung*). In this scheme, benefits are recalculated as soon as there is a change in the base income eligible for pension or the state pension to be offset. Another pension plan must be examined regularly in terms of forecast and actual pension adjustments, undertaking such adjustments if necessary.

The amount of the benefits promised under the existing pension plans in the group depends, among other things, on development of the income eligible for benefits and the social security contribution ceiling (*Beitragsbemessungsgrenze*). There is a risk that the basis of assessment will develop differently than was assumed.

Pension obligations are calculated by an independent qualified actuary in accordance with the projected unit credit method on the basis of group-wide uniform parameters such as age, length of company service and salary. The pension provision is recognised at the present value of the defined-benefit obligations as of the reporting date. The discount factor is based on current market conditions for a portfolio of high-quality corporate bonds/bonds from supranational issuers with a maturity matching that of the obligations. The definition of the portfolio takes into account current market conditions. Additional demographic factors (including the 2018 G Heubeck actuarial tables) and actuarial assumptions (rate of salary and pension increases, rate of staff turnover, etc.) are taken into account.

No plan assets were defined for the pension obligations of the group, so the related special accounting rules do not apply. Provisions for pensions and similar obligations are financed in-house with assets with corresponding maturities.

Actuarial gains and losses are immediately recognised at the time they occur. They occur as a result of remeasurement of pension obligations as of the reporting date compared to the figures forecast at the beginning of the year.

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Additions to pension provisions distinguish between service cost and interest expense. Service cost is reported under Administrative expense; interest expense is reported under Other interest expense. The pension provision changes recognised directly in equity comprise the actuarial gains and losses reported in Revaluation reserves; these are reported in Other comprehensive income.

Pension-like obligations include commitments for deferred compensation, early retirement and partial retirement (*Altersteilzeit*). Actuarial reports are prepared, and a provision is recognised accordingly for these types of commitments as well. No actuarial gains or losses are incurred.

Other provisions, including those for obligations to employees and for audit and consultancy services, are recognised at the estimated expenditure. Long-term provisions are discounted where the effect is material. Added to this are obligations arising from the assumption of the tasks of the State Insurance Company of the German Democratic Republic in liquidation (*Staatliche Versicherung der Deutschen Demokratischen Republik in Abwicklung – "SinA" institution under public law*), which are offset by receivables in the same amount from the Federal Agency for Special Tasks Associated with Unification (*Bundesanstalt für vereinigungsbedingte Sonderaufgaben – "BvS"*) reported under Other assets. If the provision is not required in full or if the reason for creating the provision no longer applies, the provision is reversed via the same income statement item that was used in creating the provision.

See the note on "Promotional lending business at KfW" for provisions relating to promotional grants.

**(19) Income tax assets and liabilities** 

Income taxes are accounted for and measured in accordance with IAS 12. Current and deferred income tax assets are reported in the item Income tax assets; current and deferred income tax liabilities under Income tax liabilities. Current income tax assets and liabilities are recognised in the amount expected to be returned or paid in the future.

The tax rates applicable are those in effect on the reporting date or those that can be assumed with sufficient certainty to be in effect on the reporting date. KfW and DEG are exempt from income taxes pursuant to Section 5 (1) no. 2 of the German Corporation Tax Act (*Körperschaftsteuergesetz – KStG*) and Section 3 no. 2 of the German Trade Tax Act (*Gewerbesteuergesetz – GewStG*).

Deferred income tax assets and liabilities are generally recognised on temporary differences between the carrying amounts of assets and liabilities in accordance with IFRS and the corresponding tax value. Deferred tax assets are only recognised for temporary differences from items and for unused tax loss carryforwards if their realisation is sufficiently probable. The impairment test is carried out regularly on the basis of group business sector planning for each group company. Deferred taxes are measured at the tax rates expected at the time of realisation of the deferred taxes. The tax rates used are those in force or that have been announced as of the reporting date. Reversal effects for the significant temporary differences for each year affected by the tax rate reduction were forecast using appropriate methods (cash flow development and average valuations of general risk provisions carried forward). In so doing, the tax rate applicable in each year of the reversal effect was used for the calculation of deferred taxes. Deferred income tax assets and liabilities are offset on the assumption that they relate to the same taxable entity, the same tax type and the same tax authority.

If temporary differences have arisen from a transaction recognised directly in equity, the resulting deferred income tax assets and liabilities are also recognised directly in equity. Income from and expenses for current and deferred income taxes is recognised in the consolidated income statement under Income taxes.

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**(20) Equity** 

The equity structure is determined, in particular, by the KfW Law and the requirements of IFRS.

Pursuant to Article 10 (2) and (3) of the KfW Law, KfW's net income for the period determined in accordance with HGB is transferred to reserves and is included in equity under IFRS.

Under IFRS, any remaining consolidated net income is allocated to Other retained earnings in the same period.

Revaluation reserves comprise transactions to be recognised directly in equity in accordance with IFRS. These include valuation results from the change in own credit risk of liabilities measured at fair value through profit or loss and from defined benefit pension obligations. They also may include deferred taxes, depending on the underlying transaction.

**(21) Trust activities** 

Assets and liabilities held by KfW Group in its own name but for the account of third parties are not recognised if the trustor retains all risks and opportunities. At KfW, this applies in particular to loans and equity investments made by KfW on behalf of the Federal Government. Both opportunities and risks remain with the Federal Government in such transactions.

Fees from trust activities are recognised under Commission income.

Further information can be found in the note "Financial instruments" in section "A. Classification and measurement" in the comments on mandated transactions.

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## Notes to the consolidated statement of comprehensive income
**(22) Net interest income** 

**Analysis of Net interest income** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Interest and similar income from loans and advances to banks and customers | 10187 | 10358 |
| Similar income from off-balance sheet transactions | 34 | 38 |
| Interest income from securities and investments | 748 | 703 |
| Interest income from hedges recognised in the statement of financial position | 3109 | 7464 |
| Other interest income | 401 | 1568 |
| **Interest income from the effective interest method** | **14479** | **20132** |
| Interest and similar income from loans and advances to banks and customers | 212 | 343 |
| Interest income from securities and investments | 89 | 86 |
| Interest income from Other derivatives | 715 | 619 |
| **Other interest income** | **1017** | **1049** |
| **Interest income, total** | **15495** | **21181** |
| Interest and similar expense for liabilities to banks and customers | 401 | 795 |
| Interest expense for certificated liabilities | 10420 | 8969 |
| Interest expense from hedges recognised in the statement of financial position | 1292 | 7653 |
| Interest expense from Other derivatives | 255 | 518 |
| Other interest expense | 595 | 754 |
| **Interest expense, total** | **12963** | **18689** |
| **Net interest income** | **2532** | **2493** |

---

Expenses for granting promotional loans below market rates – due to additional promotional funds in the form of interest rate reductions with an impact on KfW's earnings position – amount to EUR 421 million (2024: EUR 408 million) and are reported in Other interest expense. In addition to the charges resulting from the present value of the nominal scheduled interest rate reductions in new lending business, the Other interest expense item also includes the expenses arising from amortisation at a constant effective interest rate. Other interest expense also contains interest expense for pension provisions in the amount of EUR 66 million (2024: EUR 62 million). Interest and similar income from loans and advances to banks and customers also comprises income from accrual-based amortisation in the amount of the pro-rata nominal planned interest rate reductions for these promotional loans in the amount of EUR 251 million (2024: EUR 211 million).

Interest income resulting from balances with central banks in the amount of EUR 390 million (2024: EUR 1,565 million) is reported under Other interest income from the effective interest method.

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Interest income from stage 3 loan receivables in the amount of EUR 41 million (2024: EUR 63 million) is reported under Interest and similar income from loans and advances to banks and customers.

Interest income from hedges recognised in the statement of financial position comprises interest income from derivatives designated for hedge accounting as well as interest income from amortisation of value adjustments from hedge accounting. Interest income or interest expense from derivatives designated for hedge accounting is recognised depending on the related hedged item in the interest income or interest expense from hedges recognised in the statement of financial position for related financial assets or liabilities. Including the interest income or expense from the hedged items and derivatives in hedge accounting means that presentation is based on the economic substance of the hedged financial assets (floating rate financial assets) or hedged financial liabilities (floating rate financial liabilities).

**Gross analysis of negative interest contributions** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Interest income, total | 15495 | 21181 |
| Negative interest from the lending business | 39 | 49 |
| Interest income from the deposit-taking business | 183 | 252 |
| **Interest income (gross)** | **15718** | **21482** |
| Interest expense, total | 12963 | 18689 |
| Negative interest from the deposit-taking business | 183 | 252 |
| Interest expense from the lending business | 39 | 49 |
| **Interest expense (gross)** | **13186** | **18989** |

---

The negative interest contributions included in Interest income resulted from loans and advances to banks, loans and advances to customers, and securities and investments.

The positive interest contributions in Interest expense are largely due to liabilities to banks and liabilities to customers and certificated liabilities.

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**(23) Net gains/losses from risk provisions** 

**Analysis of Risk provisions by transaction** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Expenses for risk provisions for lending business (Loans and advances to banks/customers and off-balance sheet lending transactions) | 843 | 781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expenses for additions to risk provisions | 798 | 730 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Direct write-offs | 45 | 51 |
| Expenses for risk provisions for securities and investments | 10 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expenses for additions to risk provisions | 10 | 11 |
| **Expenses for risk provisions** | **853** | **792** |
| Income from risk provisions for lending business (Loans and advances to banks/customers and off-balance sheet lending transactions) | 676 | 832 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income from the reversal of risk provisions | 634 | 789 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income from recoveries of amounts previously written off | 42 | 43 |
| Income from risk provisions for securities and investments | 6 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income from the reversal of risk provisions | 6 | 11 |
| **Income from risk provisions** | **682** | **843** |
| **Net gains/losses from non-substantial contractual modifications** | **1** | **–4** |
| **Other risk provisions for lending business** | **12** | **–8** |
| **Total** | **–158** | **39** |

---

**(24) Net commission income** 

**Analysis of Commission income** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Revenue from contracts with customers** | **699** | **690** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From mandate contractual arrangements with the Federal Government<sup>1)</sup>  | 613 | 626 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fee income from mandate agreements, processing activities and services | 23 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fee income from the lending business | 57 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other revenue from contracts with customers | 7 | 7 |
| **Other commission income** | **11** | **3** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial guarantee contracts | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | 11 | 3 |
| **Commission income, total** | **711** | **693** |

---

<sup>1)</sup> Includes commission income in the amount of EUR 67 million (2024: EUR 68 million) from mandate contractual arrangements with the Federal Government in trust activities 

**96** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of comprehensive income</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Commission income by segment in financial year 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **2025** | **Mittelstandsbank &<br>Private Kunden** <br>***(SME Bank &***<br>***Private Clients)*** | **Individualfinanzierung<br>& Öffentliche Kunden**<br>***(Customised Finance &***<br>***Public Clients)*** | **KfW Capital** | **Export and<br>project finance** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| **Commission income** | **305** | **38** | **16** | **47** |
| of which Federal Government | 303 | 34 | 9 | 0 |
| % | 99% | 90% | 58% | 0% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **2025** | <br>**KfW**<br>**Development** <br>**Bank** | <br>**DEG** | <br>**Financial markets** | <br>**Head office** | <br>**KfW Group** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| **Commission income** | **279** | **21** | **0** | **6** | **711** |
| of which Federal Government | 258 | 4 | 0 | 5 | 613 |
| % | 93% | 19% | 0% | 83% | 86% |

---

**Commission income by segment in financial year 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **2024** | **Mittelstandsbank &<br>Private Kunden**<br>***(SME Bank &***<br>***Private Clients)*** | **Individualfinanzierung**<br>**& Öffentliche Kunden**<br>***(Customised Finance &<br>Public Clients)*** | **KfW Capital** | **Export and**<br>**project finance** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| **Commission income** | **328** | **32** | **16** | **26** |
| of which Federal Government | 326 | 29 | 9 | 0 |
| % | 99% | 89% | 59% | 0% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **2024** | <br>**KfW<br>Development<br>Bank** | <br>**DEG** | <br>**Financial markets** | <br>**Head office** | <br>**KfW Group** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| **Commission income** | **274** | **12** | **0** | **4** | **693** |
| of which Federal Government | 255 | 4 | 0 | 4 | 626 |
| % | 93% | 33% | 0% | 81% | 90% |

---

**97** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of comprehensive income</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Out-of-period income** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**2025** | <br>**2025** | <br>**2024** | <br>**2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Revenue in current period resulting from service(s) performed in the previous period(s) |  | 19 |  | 26 |

---

Variable consideration may have been agreed in connection with services for the Federal Government which is to be recognised at the point in time when the service is performed, to the extent that it is highly probable that a significant reversal in revenue will not occur. If the underlying conditions cease to apply, this may result in a revaluation, which in turn may lead to aperiodic revenue that is to be recognised prospectively through profit or loss in accordance with IFRS 15.

**Analysis of Commission expense** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**2025** | <br>**2025** | <br>**2024** | <br>**2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Commission expense for lending business | | 11 | | 10 |
| Other commission expense |  | 28 |  | 19 |
| **Commission expense** |  | **39** |  | **30** |

---

**(25) Net gains/losses from hedge accounting** 

**Analysis of Net gains/losses from hedge accounting by type of hedging relationship** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Hedge ineffectiveness** | **Hedge ineffectiveness** | **Items in the income statement**<br> **that contain cases of**<br> **hedge ineffectiveness** |
|  | <br>**2025** | <br>**2024** |  |
|  | **EUR in millions** | **EUR in millions** |  |
| **Micro fair value hedges** | **21** | **–52** | Net gains/losses from hedge accounting |
| Interest risk | –6 | –13 | – |
| Interest-currency risk | 28 | –39 | – |
| **Macro fair value hedges** | **–149** | **159** | Net gains/losses from hedge accounting |
| Interest risk | –149 | 159 |  |
| **Total** | **–128** | **107** | Net gains/losses from hedge accounting |

---

**Analysis of Net gains/losses from micro fair value hedge accounting by hedged item** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Hedging of securities and investments | 4 | 3 |
| Hedging of liabilities to banks and customers | –3 | –5 |
| Hedging of certificated liabilities | 21 | –49 |
| **Subtotal: Effectiveness of hedges** | **23** | **–51** |
| Amortisation of value adjustments | –1 | –1 |
| **Total** | **21** | **–52** |

---

**98** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of comprehensive income</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Gross analysis of valuation gains/losses from micro fair value hedge accounting:** 

**Comparison of hedged items and hedging instruments in financial year 2025** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Hedged items** | **Hedging<br>instruments** | **Effectiveness<br>of hedges** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Hedging of securities and investments | 9 | –5 | 4 |
| Hedging of liabilities to banks and customers | –270 | 267 | –3 |
| Hedging of certificated liabilities | –59 | 79 | 20 |
| **Total** | **–320** | **342** | **21** |

---

**Gross analysis of valuation gains/losses from micro fair value hedge accounting:** 

**Comparison of hedged items and hedging instruments in financial year 2024** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Hedged items** | **Hedging<br>instruments** | **Effectiveness<br>of hedges** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Hedging of securities and investments | 655 | –652 | 3 |
| Hedging of liabilities to banks and customers | –605 | 600 | –5 |
| Hedging of certificated liabilities | –5961 | 5911 | –50 |
| **Total** | **–5911** | **5858** | **–52** |

---

**Gross analysis of net gains/losses from macro fair value hedge accounting:** 

**Comparison of hedged items and hedging instruments in financial year 2025** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Hedged items** | **Hedging<br>instruments** | **Effectiveness<br>of hedges** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Valuation result | –3915 | 4082 | 168 |
| Amortisation | 2801 | –3152 | –351 |
| Realisation | 34 | 0 | 34 |
| **Net gains/losses from macro fair value hedge accounting** | **–1080** | **931** | **–149** |

---

**Gross analysis of net gains/losses from macro fair value hedge accounting:** 

**Comparison of hedged items and hedging instruments in financial year 2024** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Hedged items** | **Hedging<br>instruments** | **Effectiveness<br>of hedges** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Valuation result | 2193 | –1526 | 667 |
| Amortisation | 3209 | –3761 | –552 |
| Realisation | 43 | 0 | 43 |
| **Net gains/losses from macro fair value hedge accounting** | **5446** | **–5287** | **159** |

---

**99** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of comprehensive income</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Net gains/losses from macro fair value hedge accounting include the valuation of hedging instruments and the valuation of hedged risks from the hedged portfolios. It also includes the amortisation of the value adjustments from the dynamic hedge designation and de-designation and the pro rata reversal of value adjustments in the event of derecognition of financial instruments from the underlying portfolios as well as the pull-to-par effect of the hedging derivatives.

**(26) Net gains/losses from other financial instruments at fair value through profit or loss** 

**Analysis of Net gains/losses from other financial instruments at fair value through profit or loss** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Loans and advances to banks/customers | 14 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances | 5 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Miscellaneous receivables (money market transactions, promissory note loans and Other receivables) | 8 | 19 |
| Securities and investments | 393 | –6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bonds and other fixed-income securities | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares and other non-fixed income securities | 275 | –28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity investments | 118 | 23 |
| Liabilities to banks and customers | 23 | –5 |
| Certificated liabilities | –45 | 199 |
| Other derivatives | –143 | –267 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial derivatives not qualifying for hedge accounting | –143 | –267 |
| Foreign currency translation | –212 | 88 |
| **Total** | **30** | **44** |

---

Net gains/losses from assets include the net gains/losses from holding arrangements for the Federal Republic of Germany – if attributable to KfW, KfW IPEX-Bank's syndication business with a focus on short-term placement, loans that do not meet the SPPI criterion (loans and advances to banks and loans and advances to customers), equity investments and fund investments, recognised in Shares and other non-fixed income securities.

The gains realised from the disposal of non-current assets held for sale included in net gains/losses from securities and investments amounted to EUR 18 million in financial year 2025 (2024: EUR 0 million).

Net gains/losses from liabilities measured at fair value include the results from promissory note loans (liabilities to banks/liabilities to customers) and bonds and notes (certificated liabilities).

Net gains/losses from financial derivatives not qualifying for hedge accounting are mainly attributable to derivatives in economic hedges. Economic hedges are recognised by exercising the fair value option for the hedged items. The hedged items include, in particular, borrowings in the form of Certificated liabilities, Liabilities to banks and Liabilities to customers.

Furthermore, this line item includes gains/losses from bifurcated embedded derivatives resulting from hybrid contracts under financial liabilities. The net gains/losses from the valuation of the associated hedging derivatives are thus compensated for.

**100** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of comprehensive income</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Gross analysis of results from economically hedged borrowings:** 

**Comparison of hedged items and hedging instruments** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Borrowings | –22 | 194 |
| Hedging instruments | 5 | –249 |
| **Total (effectiveness of economic hedges)** | **–17** | **–55** |

---

**(27) Net gains/losses from disposal of financial assets at amortised cost** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Income from the disposal of financial assets at amortised cost | 0 | 0 |
| Expense from the disposal of financial assets at amortised cost | 1 | 0 |
| **Total** | **0** | **0** |

---

**(28) Net gains/losses from investments accounted for using the equity method** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2024** | **2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Net gains/losses from investments accounted for using the equity method |  | –6 |  | 20 |

---

**(29) Administrative expense** 

**Analysis of Administrative expense** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2024** | **2024** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
| Wages and salaries |  | 848 |  | 795 |  |
| Social security contributions |  | 131 |  | 116 |  |
| Expenses for pension provision and other employee benefits |  | 109 |  | 49 |  |
| **Personnel expense** |  | **1088** |  | **961** |  |
| Other administrative expenses |  | 575 |  | 621 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*thereof Office costs* | | *60* | | *62* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*thereof Personnel-related material costs* | | *41* | | *44* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*thereof Office operating costs* | | *134* | | *123* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*thereof Costs of external services* | | *303* | | *355* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*thereof Costs of public relations work* | | *27* | | *27* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*thereof Other material costs* | | *9* | | *10* | |
| Depreciation, amortisation and impairment of property, plant and equipment and intangible assets |  | 88 |  | 90 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*of which impairments of rights of use arising from leases* | | *9* | | *10* | |
| **Non-personnel expense** |  | **663** |  | **711** |  |
| **Total** |  | **1751** |  | **1672** |  |

---

**101** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of comprehensive income</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(30) Net other operating income or loss** 

**Analysis of Net other operating income or loss** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Other operating income | 25 | 31 |
| Other operating expense | 25 | 83 |
| **Total** | **0** | **–52** |

---

Other operating income primarily includes income from the reversal of other provisions in the amount of EUR 5 million (2024: EUR 12 million).

In the previous year, Other operating expense consisted primarily of the obligation to award grants under KfW's ERP promotional programmes in the amount of EUR 70 million. No contribution was made in 2025.

**(31) Taxes on income** 

**Analysis of Taxes on income by component** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Current taxes on income | 149 | 167 |
| Deferred taxes | 41 | 72 |
| **Total** | **189** | **239** |

---

Current taxes include taxes on income for group companies and non-deductible investment income tax recorded at the level of (tax-exempt) KfW and DEG, and tax expenses posted for previous years at the level of DEG.

The reconciliation presents the relationship between the calculated income tax expense for the financial year and reported taxes on income.

**102** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of comprehensive income</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Income tax reconciliation** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| Profit/loss from operating activities (before taxes) | 1192 | 1641 |
| Group income tax rate | 0% | 0% |
| **Calculated income tax expense in the financial year** | **0** | **0** |
| Effects of tax rate differentials within the group | 186 | 177 |
| Effect of tax rate changes | 12 | 36 |
| Effects of previous year taxes recorded in the reporting year | 9 | 7 |
| Effects of non-deductible taxes on income | 0 | 0 |
| Effects of non-deductible business expenses | 1 | 3 |
| Effects of tax-free income | –6 | –22 |
| Trade tax add-ons/reductions | 0 | 0 |
| Permanent accounting differences | –16 | 37 |
| Effects of changes in recognised deferred tax assets | 3 | 1 |
| **Reported taxes on income/expense** | **189** | **239** |
| **Average effective tax rate** | **16%** | **15%** |

---

KfW's applicable income tax rate of 0%, on which the reconciliation is based, takes into account the tax status of KfW as a non-taxable public-law institution and the fact that this status predominantly determines profit/ loss from operating activities.

The effects of tax rate differentials result from individual group companies being taxable and the related different tax rates. The tax rates continue to range from 0% to 32%.

**Global Minimum Tax ("GMT") in accordance with the OECD Pillar Two rules** 

KfW Group falls within the scope of the GMT pursuant to the OECD Pillar Two rules.

KfW as group parent is a state-owned promotional bank and is therefore deemed an excluded entity pursuant to Section 5 (1) no. 1 of the German Minimum Tax Act *(Mindeststeuergesetz – "MinStG")*. KfW Capital GmbH & Co. KG and DEG GmbH are also excluded from the scope of the MinStG. The remainder of the KfW enterprise group that falls within the scope of the Minimum Tax Act applies the transitional safe harbour rules pursuant to Section 83 Minimum Tax Act. The group assumes that there will be no relevant tax burden as a result of the global minimum taxation law due to this transitional arrangement.

KfW Group currently assumes that the joint venture DC Nordseekabel GmbH & Co. KG falls under the country-by-country reporting ("CbCR") safe harbour rules of Section 84 (1) no. 3 MinStG and, accordingly, that national top-up taxes will not apply for the joint venture.

**103** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Segment reporting</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Segment reporting
**(32) Segment reporting by business sector** 

In accordance with the provisions of IFRS 8, segment reporting follows the internal management reporting system, which is used by the group's main decision-makers to assess each segment's performance and to allocate resources to segments.

In accordance with the business sector structure for the group, the segments and their products and services can be presented as follows:

---

| | |
|:---|:---|
|  | – Start-up financing |
| Mittelstandsbank & Private Kunden<br> (*SME Bank* & *Private Clients*) | – Financing of general corporate investments and investments in innovation, energy and environmental protection |
| Mittelstandsbank & Private Kunden<br> (*SME Bank* & *Private Clients*) | – Education financing |
| | – Financing for housing construction, conversion and refurbishment |
| Individualfinanzierung & Öffentliche<br> Kunden | – Financing of municipal and social infrastructure |
| Individualfinanzierung & Öffentliche<br> Kunden | – Customised corporate financing with equity and debt capital |
| (*Customised Finance* & *Public Clients*) | – Customised financing of banks and promotional institutions of the federal states |
| | – Mandated transactions for energy supply (debt capital) |
| KfW Capital | – Investments in German and European venture capital and venture debt funds |
| KfW Capital | – Co-investments in start-ups (via special purpose vehicles) |
| Export and project finance | – Financing of German and European export activities |
| Export and project finance | – Financing of projects and investments which are of special interest for Germany and Europe<br>|
| KfW Development Bank | – Promotion of developing countries and emerging economies on behalf of the Federal Government with standard |
| KfW Development Bank | loans/grants refinanced through budget funds and promotional/development loans from market funds raised by KfW |
| DEG | – Financing provided by DEG – Deutsche Investitions- und Entwicklungs-gesellschaft mbH in developing countries and |
| DEG | emerging economies (private enterprise financing)<br>|
|  | – Securities and money market investments |
| Financial markets | – Holding arrangements of the Federal Republic of Germany |
| Financial markets | – Transactions mandated by the Federal Government, loan granted to Greece |
| | – Funding |
|  | – Central interest rate and currency management |
| Head office | – Strategic equity investments |

---

The internal schedule of earnings was adjusted in financial year 2025. The new variables added were the economic result, consolidated profit before IFRS effects from hedging, and IFRS effects from hedging<sup>1</sup>). The comparative figures from the previous year were adjusted on the basis of the new earnings structure. The business sectors are measured on the basis of their contribution to consolidated profit before IFRS effects.

The individual items are based on the following methods:

Net interest income (before promotional expense) includes the net interest generated from lending business calculated on the basis of the market interest rate method<sup>2)</sup>. The item also includes the imputed return on equity allocated according to the business sectors' planned regulatory capital. Head office also includes the treasury result, which largely consists of the income/loss from maturity transformation. The profit contribution from KfW funding<sup>3)</sup> is allocated to the Financial markets business sector. <br>

<sup>1)</sup> See the Alternative key financial figures used section in the group management report for a description of the economic result and IFRS effects from hedging

<sup>2)</sup> Funding at matching maturities using KfW's internal refinancing curve is assumed for the calculation of net interest income in this method.

<sup>3)</sup> The difference between the realised refinancing rates and the maturity-matched refinancing rates calculated in-house

**104** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Segment reporting</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

– Promotional expense included in Interest, Commission and Administrative expense and Other operating expense in the income statement is reported separately pursuant to the internal management report due to the special relevance of promotional expense as a management variable.

Promotional expense is understood to mean certain expenses from the two business sectors Mittelstandsbank & Private Kunden (*SME Bank* & *Private Clients*) and Individualfinanzierung & Öffentliche Kunden (*Customised Finance* & *Public Clients*) that have a positive impact on the achievement of KfW's promotional objectives. Promotional expense primarily consists of additions of the interest rate reductions accounted for at present value<sup>4</sup>) from new commitments as well as from the compounding effect. Additional promotional components are the expenses for upfront fees paid to sales partners for the processing of small and micro loans (included in Commission expense), for innovative digital promotional approaches (included in Commission and Administrative expense), for available and product-related marketing and sales measures (included in Administrative expense), and, from 2023, for promotional grants awarded by KfW under ERP promotion (included in Other operating expense).

The allocation of Administrative expense (before promotional expense) is based on the results from activity-based accounting by cost centres<sup>5)</sup>. Administrative expense (before promotional expense) includes depreciation on property, plant and equipment and amortisation of intangible assets and rights of use. <br>

– In the Risk provisions for lending business item, net impairment charges, direct write-offs, recoveries on loans written off and the net gains/losses from non-substantial contractual modifications are distributed among the segments according to the underlying loan.

The valuation result (before promotional expense and IFRS effects) comprises net gains/losses from other financial instruments at fair value (before IFRS effects from hedging), net gains/losses from risk provisions in the securities business, net gains/losses from the disposal of financial instruments measured at amortised cost, net gains/losses from investments accounted for using the equity method and net other operating income (before promotional expense). <br>

The item IFRS effects from hedging relates to temporary effects on earnings from the valuation of derivative financial instruments. It comprises the result from hedge accounting and other valuation results included in net gains/losses from other derivative financial instruments at fair value through profit or loss, and is recognised separately in the internal income accounts. <br>

– When taxes on income are allocated to the business sectors (excluding the Head office) only the current taxes on income are taken into account. Deferred taxes are allocated to the Head office.

– Segment assets are not reported because, in accordance with the internal management reporting system, they are used neither to assess each segment's performance nor to allocate resources to segments.

The presentation of segment income and expenses is based on consolidated figures. Administrative and commission expense as well as commission income and other operating income resulting from service relationships within KfW Group are adjusted in segment reporting. Any remaining negligible consolidation effects are reported in the reconciliation/consolidation column. <br>

<sup>4)</sup> See note regarding "KfW's promotional lending business" for details of KfW's interest rate reductions in the promotional lending business

<sup>5)</sup> The costs incurred in the organisational units are largely allocated to the products by means of core services.

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Segment reporting</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Segment reporting by business sector for financial year 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Mittelstandsbank<br>& Private Kunden<br>*(SME Bank* &<br>*Private Clients)*** | **Individualfinan-**<br>**zierung & Öffent-<br>liche Kunden<br>*(Customised<br>Finance* & *Public*<br>*Clients)*** | **KfW Capital<sup>1)</sup>** | **Export and<br>project finance** | **KfW<br>Development<br>Bank<sup>1)</sup>** |
| | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| <br>**Volume of new commitments** | **49059** | **12212** | **748** | **24181** | **9960** |
| Net interest income (before promotional expense) | 500 | 131 | –12 | 1049 | 205 |
| Net commission income (before promotional expense) | 304 | 37 | 16 | 47 | 279 |
| Administrative expense (before promotional expense) | 441 | 90 | 30 | 338 | 437 |
| **Operating result before valuation (before promotional expense)** | **364** | **79** | **–26** | **757** | **47** |
| Risk provisions for lending business | –8 | –16 | 0 | –112 | –1 |
| Valuation result (before promotional expense and IFRS effects) | 4 | 28 | 184 | –1 | 54 |
| **Economic result** | **359** | **91** | **158** | **644** | **100** |
| Promotional expense | 433 | 35 | 0 | 0 | 0 |
| Taxes on income | 0 | 0 | 1 | 139 | 0 |
| **Consolidated profit before IFRS effects** | **–74** | **56** | **158** | **505** | **100** |
|  IFRS effects from hedging | 0 | 0 | 0 | –1 | 0 |
|  **Consolidated profit** | **–74** | **56** | **158** | **504** | **100** |
|  | **DEG** | **Financial markets** | **Head office<sup>1)</sup>** | **Reconciliation/**<br>**consolidation** | <br>**KfW Group** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| **Volume of new commitments** | **2350** | **0** | **0** | **–548** | **97961** |
| Net interest income (before promotional expense) | 162 | 495 | 426 | 0 | 2957 |
| Net commission income (before promotional expense) | 5 | –8 | 6 | 0 | 685 |
| Administrative expense (before promotional expense) | 160 | 99 | 145 | 0 | 1739 |
| **Operating result before valuation (before promotional expense)** | **8** | **389** | **286** | **0** | **1903** |
| Risk provisions for lending business | –13 | –5 | 0 | 0 | –155 |
| Valuation result (before promo-tional expense and IFRS effects) | 16 | –7 | –9 | –1 | 267 |
| **Economic result** | **11** | **377** | **277** | **–2** | **2016** |
| Promotional expense | 0 | 0 | 0 | 0 | 468 |
| Taxes on income | 10 | 0 | 40 | 0 | 189 |
| **Consolidated profit before IFRS effects** | **1** | **377** | **237** | **–2** | **1359** |
|  IFRS effects from hedging | –1 | –2 | –353 | 0 | –356 |
|  **Consolidated profit** | **0** | **375** | **–116** | **–2** | **1002** |

---

<sup>1)</sup> The valuation result of the business sectors includes the following net gains/losses from investments accounted for using the equity method: KfW Capital EUR –26 million, KfW Development Bank EUR 6 million and head office EUR 14 million.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Segment reporting by business sector for financial year 2024** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Mittelstandsbank<br>& Private Kunden<br>*(SME Bank* &<br>*Private Clients)*** | **Individualfinan-**<br>**zierung & Öffent-<br>liche Kunden<br>*(Customised<br>Finance* & *Public*<br>*Clients)*** | **KfW Capital<sup>1)</sup>** | **Export and<br>project finance<sup>1)</sup>** | **KfW<br>Development<br>Bank<sup>1)</sup>** |
| | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| <br>**Volume of new commitments** | **35816** | **41570** | **1590** | **23916** | **7839** |
| Net interest income (before promotional expense) | 531 | 108 | –22 | 1012 | 202 |
| Net commission income (before promotional expense) | 327 | 32 | 16 | 26 | 274 |
| Administrative expense (before promotional expense) | 462 | 87 | 27 | 321 | 436 |
| **Operating result before valuation (before promotional expense)** | **397** | **53** | **–32** | **717** | **40** |
| Risk provisions for lending business | –56 | 0 | 0 | 28 | 12 |
| Valuation result (before promotional expense and IFRS effects) | 0 | 1 | 31 | 25 | 20 |
| **Economic result** | **341** | **54** | **–2** | **770** | **73** |
| Promotional expense | 477 | 26 | 0 | 0 | 0 |
| Taxes on income | 0 | 0 | 1 | 150 | 0 |
| **Consolidated profit before IFRS effects** | **–136** | **28** | **–2** | **620** | **73** |
|  IFRS effects from hedging | 0 | 0 | 0 | –9 | 0 |
|  **Consolidated profit** | **–136** | **28** | **–2** | **611** | **73** |
|  | **DEG** | **Financial markets** | **Head office** | **Reconciliation/**<br>**consolidation** | <br>**KfW Group** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| **Volume of new commitments** | **2470** | **0** | **0** | **–369** | **112831** |
| Net interest income (before promotional expense) | 136 | 478 | 454 | 0 | 2900 |
| Net commission income (before promotional expense) | 1 | –5 | 4 | 0 | 675 |
| Administrative expense (before promotional expense) | 153 | 99 | 73 | 0 | 1658 |
| **Operating result before valuation (before promotional expense)** | **–17** | **375** | **385** | **0** | **1917** |
| Risk provisions for lending business | 58 | –4 | 0 | 0 | 39 |
| Valuation result (before promotional expense and IFRS effects) | 5 | 16 | 41 | 0 | 140 |
| **Economic result** | **47** | **387** | **426** | **0** | **2097** |
| Promotional expense | 0 | 0 | 0 | 0 | 504 |
| Taxes on income | 16 | 0 | 72 | 0 | 239 |
| **Consolidated profit before IFRS effects** | **31** | **387** | **354** | **0** | **1354** |
|  IFRS effects from hedging | –2 | –3 | 62 | 0 | 48 |
|  **Consolidated profit** | **29** | **384** | **416** | **0** | **1402** |

---

<sup>1)</sup> The valuation result of the business sectors includes the following net gains/losses from investments accounted for using the equity method: <br>KfW Capital EUR –2 million, Export and project finance EUR 14 million and KfW Development Bank EUR 7 million.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The reconciliation/consolidation column includes all adjustments necessary to reconcile segment information with the aggregated information for the group. The consolidation effects reported for "Volume of new commitments" relate to commitments for programme loans made by Mittelstandsbank & Private Kunden (*SME Bank* & *Private Clients*) and Individualfinanzierung & Öffentliche Kunden (*Customised Finance* & *Public Clients*) for which KfW IPEX-Bank acts as on-lending bank. The other amounts in this column result from minimal consolidation effects.

**(33) Segment reporting by region** 

Net interest and commission income are allocated on the basis of the customers' geographical location. The imputed return on equity included in net interest income, the profit contribution from KfW funding and the treasury result are allocated to Germany. KfW receives commission income from the Federal Government for supporting developing countries and emerging economies using budget funds of the Federal Government. These funds are allocated according to the region of the country receiving the investment.

Property, plant and equipment and intangible assets are not reported according to region because, apart from immaterial amounts, these assets relate to Germany.

**Segment reporting by region for financial year 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **Europe**<br>**(excl. Germany)** | | **Reconciliation/**<br>**consolidation** | |
|  | **Germany**<br> **EUR in millions** | **EUR in millions** | **Rest of the world**<br> **EUR in millions** | **EUR in millions** | **KfW Group**<br> **EUR in millions** |
| Net interest income | 1377 | 531 | 624 | 0 | 2532 |
| Net commission income | 350 | 50 | 272 | 0 | 672 |
| **Segment income** | **1727** | **582** | **896** | **0** | **3204** |

---

**Segment reporting by region for financial year 2024** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **Europe**<br>**(excl. Germany)** | | **Reconciliation/**<br>**consolidation** | |
|  | **Germany**<br> **EUR in millions** | **EUR in millions** | **Rest of the world**<br> **EUR in millions** | **EUR in millions** | **KfW Group**<br> **EUR in millions** |
| Net interest income | 1360 | 524 | 609 | 0 | 2493 |
| Net commission income | 370 | 39 | 254 | 0 | 664 |
| **Segment income** | **1730** | **563** | **863** | **0** | **3156** |

---

The reconciliation/consolidation column includes all adjustments necessary to reconcile segment information with the aggregated information for the group. The amounts in this column result solely from minimal consolidation effects.

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of financial position</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Notes to the consolidated

## statement of financial position
**(34) Cash reserves** 

**Analysis of Cash reserves** 

---

| | | |
|:---|:---|:---|
|  | <br>**31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Cash | 0 | 0 |
| Balances with central banks | 19535 | 26522 |
| **Total** | **19535** | **26522** |

---

**(35) Financial assets at amortised cost** 

**Analysis of Financial assets at amortised cost by class** 

---

| | | |
|:---|:---|:---|
| | **31 Dec. 2025** | **31 Dec. 2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Loans and advances to banks** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Money-market transactions | 17134 | 16499 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances | 288316 | 291690 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other receivables | 30290 | 12339 |
| **Loans and advances to customers** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Money-market transactions | 800 | 500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances | 135478 | 141993 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Promissory note loans | 2316 | 1989 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other receivables | 1529 | 1492 |
| **Securities and investments** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bonds and other fixed-income securities | 37746 | 37991 |
| **Total gross** | **513609** | **504492** |
| less risk provisions for |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks | –115 | –122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers | –1772 | –1696 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments | –12 | –8 |
| **Total net** | **511710** | **502666** |

---

Receivables from reverse repurchase agreements ("reverse repos") amounted to EUR 23,282 million (31 Dec. 2024: EUR 9,630 million) and are included in Loans and advances to banks – Other receivables and Loans and advances to customers – Other receivables.

The cash collateral pledged of EUR 6,633 million (31 Dec. 2024: EUR 2,469 million) is attributable to cash collateral on derivatives and is included in Loans and advances to banks – Other receivables and Loans and advances to customers – Other receivables.

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of financial position</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Analysis of Loans and advances by underwriting liability type** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Loans and advances to banks** | **Loans and advances to banks** | **Loans and advances to customers** | **Loans and advances to customers** |
|  | <br>**31 Dec. 2025** | <br>**31 Dec. 2024** | <br>**31 Dec. 2025** | <br>**31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Direct loans | 69141 | 68919 | 129594 | 132812 |
| On-lent customer loans with full underwriting borne by the on-lending commercial bank | 210146 | 209116 | 0 | 0 |
| On-lent customer loans with partial underwriting borne by the on-lending commercial bank | 9725 | 14248 | 0 | 0 |
| On-lent customer loans without underwriting borne by the on-lending commercial bank | 0 | 0 | 3886 | 5159 |
| Direct customer loans with full underwriting borne by the on-lending commercial bank | 0 | 0 | 1171 | 3074 |
| Direct and on-lent subordinated loans | 320 | 314 | 859 | 983 |
| Adjustment to the carrying amount due to the interest rate being below the market rate for promotional loans paid out with additional promotional funds in the form of interest rate reductions with an impact on KfW's earnings position. | –1016 | –907 | –31 | –33 |
| **Total** | **288316** | **291690** | **135478** | **141993** |

---

Direct loans to banks include, in particular, global loans granted as part of financing for domestic housing construction and SMEs.

Direct loans to customers include, in particular, loans granted under export and project financing, municipal financing and education financing. The item also includes loans connected with certain transactions mandated by the Federal Government in accordance with the KfW Law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(36) Gross carrying amounts** 

**Development of gross carrying amounts of financial assets at amortised cost – Loans and advances to banks** 

---

| | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **<br>Financial year 2025** | **<br>Financial year 2025** | **<br>Financial year 2025** | **<br>Financial year 2025** | | | | | **Financial year 2024** | **Financial year 2024** | **Financial year 2024** | **Financial year 2024** | | |  |
|  | **Stage 1** | **Stage 1** | **Stage 2** | **Stage 2** | **Stage 3** | **Stage 3** | **Total** | **Total** | **Stage 1** | **Stage 1** | **Stage 2** | **Stage 2** | **Stage 3** | **Stage 3** | **Total** | **Total** |  |
|  | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** |  |
|  | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** |  |
| **As of 1 Jan.** |  | **318108** |  | **1223** |  | **1196** |  | **320527** |  | **321416** |  | **2098** |  | **1128** |  | **324642** |  |
| Transfer from stage 2 and stage 3 to stage 1 |  | 30 |  | –30 |  | 0 |  | 0 |  | 657 |  | –656 |  | –1 |  | 0 |  |
| Transfer from stage 1 and stage 3 to stage 2 |  | –444 |  | 462 |  | –18 |  | 0 |  | –503 |  | 531 |  | –27 |  | 0 |  |
| Transfer from stage 1 and stage 2 to stage 3 |  | –468 |  | –139 |  | 607 |  | 0 |  | –665 |  | –208 |  | 873 |  | 0 |  |
| Additions – New business and increased utilisation |  | 326274 |  | 49 |  | 35 |  | 326358 |  | 123210 |  | 29 |  | 68 |  | 123307 |  |
| Disposals |  | –311414 |  | –516 |  | –729 |  | –312659 |  | –126710 |  | –578 |  | –769 |  | –128056 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which financial assets written off* | | *–311414* | | *–516* | | *–713* | | *–312644* | | *–126710* | | *–578* | | *–713* | | *–128000* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which default on receivables* | | *0* | | *0* | | *–15* | | *–15* | | *0* | | *0* | | *–56* | | *–56* | |
| Changes from non-substantial contractual modification |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Exchange rate and other changes |  | 1541 |  | –3 |  | –25 |  | 1514 |  | 704 |  | 7 |  | –77 |  | 635 |  |
| **As of 31 Dec.** |  | **333627** |  | **1047** |  | **1067** |  | **335741** |  | **318108** |  | **1223** |  | **1196** |  | **320527** |  |

---

**Development of gross carrying amounts of financial assets at amortised cost – Loans and advances to customers** 

---

| | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **<br>Financial year 2025** | **<br>Financial year 2025** | **<br>Financial year 2025** | **<br>Financial year 2025** | | | | | **Financial year 2024** | **Financial year 2024** | **Financial year 2024** | **Financial year 2024** | | |  |
|  | **Stage 1** | **Stage 1** | **Stage 2** | **Stage 2** | **Stage 3** | **Stage 3** | **Total** | **Total** | **Stage 1** | **Stage 1** | **Stage 2** | **Stage 2** | **Stage 3** | **Stage 3** | **Total** | **Total** |  |
|  | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** |  |
|  | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** |  |
| **As of 1 Jan.** |  | **138066** |  | **3714** |  | **4193** |  | **145974** |  | **134370** |  | **5252** |  | **4707** |  | **144328** |  |
| Transfer from stage 2 and stage 3 to stage 1 |  | 607 |  | –607 |  | 0 |  | 0 |  | 1778 |  | –1774 |  | –5 |  | 0 |  |
| Transfer from stage 1 and stage 3 to stage 2 |  | –2328 |  | 2662 |  | –334 |  | 0 |  | –1567 |  | 1666 |  | –98 |  | 0 |  |
| Transfer from stage 1 and stage 2 to stage 3 |  | –1085 |  | –237 |  | 1322 |  | 0 |  | –864 |  | –305 |  | 1169 |  | 0 |  |
| Additions – New business and increased utilisation |  | 26221 |  | 139 |  | 34 |  | 26395 |  | 36386 |  | 271 |  | 41 |  | 36698 |  |
| Disposals |  | –23904 |  | –901 |  | –1046 |  | –25851 |  | –33541 |  | –1500 |  | –1386 |  | –36428 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which financial assets written off* | | *–23903* | | *–901* | | *–951* | | *–25756* | | *–33541* | | *–1499* | | *–1251* | | *–36291* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which default on receivables* | | *–1* | | *0* | | *–95* | | *–96* | | *0* | | *–1* | | *–135* | | *–137* | |
| Changes from non-substantial contractual modification |  | 0 |  | 1 |  | 0 |  | 1 |  | –4 |  | 0 |  | 0 |  | –4 |  |
| Exchange rate and other changes |  | –6075 |  | –114 |  | –206 |  | –6396 |  | 1509 |  | 104 |  | –234 |  | 1379 |  |
| **As of 31 Dec.** |  | **131502** |  | **4657** |  | **3964** |  | **140123** |  | **138066** |  | **3714** |  | **4193** |  | **145974** |  |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of gross carrying amounts of financial assets at amortised cost – Securities and investments** 

---

| | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **<br>Financial year 2025** | **<br>Financial year 2025** | **<br>Financial year 2025** | **<br>Financial year 2025** | | | | | **Financial year 2024** | **Financial year 2024** | **Financial year 2024** | **Financial year 2024** | | |  |
|  | **Stage 1** | **Stage 1** | **Stage 2** | **Stage 2** | **Stage 3** | **Stage 3** | **Total** | **Total** | **Stage 1** | **Stage 1** | **Stage 2** | **Stage 2** | **Stage 3** | **Stage 3** | **Total** | **Total** |  |
|  | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** |  |
|  | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** |  |
| **As of 1 Jan.** |  | **37907** |  | **83** |  | **0** |  | **37991** |  | **36001** |  | **64** |  | **0** |  | **36065** |  |
| Transfer from stage 2 and stage 3 to stage 1 |  | 82 |  | –82 |  | 0 |  | 0 |  | 65 |  | –65 |  | 0 |  | 0 |  |
| Transfer from stage 1 and stage 3 to stage 2 |  | –21 |  | 21 |  | 0 |  | 0 |  | –84 |  | 84 |  | 0 |  | 0 |  |
| Additions – New business and increased utilisation |  | 33382 |  | 0 |  | 0 |  | 33382 |  | 33632 |  | 0 |  | 0 |  | 33632 |  |
| Disposals |  | –33594 |  | 0 |  | 0 |  | –33594 |  | –32406 |  | –1 |  | 0 |  | –32407 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which financial assets written off* | | *–33594* | | *0* | | *0* | | *–33594* | | *–32406* | | *–1* | | *0* | | *–32407* | |
| Exchange rate and other changes |  | –32 |  | –1 |  | 0 |  | –32 |  | 700 |  | 1 |  | 0 |  | 701 |  |
| **As of 31 Dec.** |  | **37724** |  | **22** |  | **0** |  | **37746** |  | **37907** |  | **83** |  | **0** |  | **37991** |  |

---

**Development of gross carrying amounts of off-balance sheet lending transactions** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **<br>Financial year 2025** | **<br>Financial year 2025** | | | **Financial year 2024** | **Financial year 2024** | |
| |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |
| | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** |
| <br>**As of 1 Jan.** | **140475** | **1322** | **283** | **142081** | **137227** | **1847** | **455** | **139528** |
| Transfer from stage 2 and stage 3 to stage 1 | 0 | 0 | 0 | 0 | 14 | –14 | 0 | 0 |
| Transfer from stage 1 and stage 3 to stage 2 | –66 | 66 | 0 | 0 | –390 | 390 | 0 | 0 |
| Transfer from stage 1 and stage 2 to stage 3 | –3 | –8 | 11 | 0 | –50 | 0 | 50 | 0 |
| Additions – New business and increased utilisation | 46317 | 750 | 109 | 47176 | 65955 | 448 | 9 | 66412 |
| Disposals | –48801 | –426 | –7 | –49233 | –62261 | –1349 | –231 | –63842 |
| Exchange rate and other changes | –73 | –1 | –14 | –88 | –18 | 0 | 0 | –18 |
| **As of 31 Dec.** | **137850** | **1704** | **382** | **139936** | **140475** | **1322** | **283** | **142081** |

---

The gross carrying amount of financial assets for which risk provisioning at the time of modification was assigned to stage 2 or 3 and was transferred back to stage 1 during the reporting period amounted to EUR 35 million as of the reporting date (31 Dec. 2024: EUR 103 million).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(37) Risk provisions** 

**Development of risk provisions for financial assets at amortised cost – Loans and advances to banks** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **<br>Financial year 2025** | **<br>Financial year 2025** | | | **Financial year 2024** | **Financial year 2024** | |
| |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |
| | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** |
| <br>**As of 1 Jan.** | **45** | **24** | **52** | **122** | **52** | **32** | **84** | **167** |
| Transfer from stage 2 and stage 3 to stage 1 | 1 | –1 | 0 | 0 | 14 | –14 | 0 | 0 |
| Transfer from stage 1 and stage 3 to stage 2 | –1 | 1 | 0 | 0 | 0 | 0 | 0 | 0 |
| Transfer from stage 1 and stage 2 to stage 3 | –1 | –2 | 3 | 0 | 0 | –3 | 3 | 0 |
| Additions | 45 | 12 | 16 | 74 | 27 | 27 | 14 | 68 |
| Utilisation | 0 | 0 | –8 | –8 | 0 | 0 | –49 | –49 |
| Reversals | –50 | –10 | –7 | –66 | –49 | –18 | –24 | –92 |
| Net present value effect | 0 | 0 | 3 | 3 | 0 | 0 | 4 | 4 |
| Exchange rate and other changes | –3 | 0 | –6 | –9 | 1 | 0 | 21 | 22 |
| **As of 31 Dec.** | **37** | **25** | **53** | **115** | **45** | **24** | **52** | **122** |

---

**Development of risk provisions for financial assets at amortised cost – Loans and advances to customers** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **<br>Financial year 2025** | **<br>Financial year 2025** | | | **Financial year 2024** | **Financial year 2024** | |
| |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |
| | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** |
| <br>**As of 1 Jan.** | **192** | **229** | **1276** | **1696** | **162** | **300** | **1223** | **1685** |
| Transfer from stage 2 and stage 3 to stage 1 | 29 | –29 | 0 | 0 | 62 | –62 | 0 | 0 |
| Transfer from stage 1 and stage 3 to stage 2 | –11 | 27 | –16 | 0 | –7 | 23 | –16 | 0 |
| Transfer from stage 1 and stage 2 to stage 3 | –9 | –54 | 63 | 0 | –8 | –24 | 31 | 0 |
| Additions | 167 | 182 | 315 | 663 | 169 | 133 | 271 | 573 |
| Utilisation | 0 | 0 | –57 | –57 | 0 | 0 | –93 | –93 |
| Reversals | –149 | –126 | –240 | –515 | –188 | –146 | –258 | –593 |
| Net present value effect | 0 | 0 | 55 | 55 | 0 | 0 | 95 | 95 |
| Exchange rate and other changes | –3 | –6 | –61 | –70 | 3 | 4 | 22 | 29 |
| **As of 31 Dec.** | **215** | **223** | **1335** | **1772** | **192** | **229** | **1276** | **1696** |

---

**113** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of risk provisions for financial assets at amortised cost – Securities and investments** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **<br>Financial year 2025** | **<br>Financial year 2025** | | | **Financial year 2024** | **Financial year 2024** | |
| |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |
| | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** |
| <br>**As of 1 Jan.** | **8** | **0** | **0** | **8** | **8** | **0** | **0** | **8** |
| Transfer from stage 2 and stage 3 to stage 1 | 0 | 0 | 0 | 0 | 6 | –6 | 0 | 0 |
| Additions | 9 | 1 | 0 | 10 | 5 | 6 | 0 | 11 |
| Reversals | –6 | 0 | 0 | –7 | –10 | –1 | 0 | –11 |
| **As of 31 Dec.** | **10** | **2** | **0** | **12** | **8** | **0** | **0** | **8** |

---

**Development of Risk provisions for lending business (off-balance sheet lending transactions)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **<br>Financial year 2025** | **<br>Financial year 2025** | | | **Financial year 2024** | **Financial year 2024** | |
| |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |<br>**Stage 1** | **Stage 2** | **Stage 3** |<br>**Total** |
| | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** |
| <br>**As of 1 Jan.** | **17** | **9** | **48** | **74** | **24** | **16** | **50** | **90** |
| Transfer from stage 2 and stage 3 to stage 1 | 1 | –1 | 0 | 0 | 2 | –2 | 0 | 0 |
| Transfer from stage 1 and stage 3 to stage 2 | –1 | 1 | 0 | 0 | –1 | 1 | 0 | 0 |
| Transfer from stage 1 and stage 2 to stage 3 | 0 | –2 | 2 | 0 | 0 | 0 | 0 | 0 |
| Additions | 31 | 24 | 5 | 60 | 28 | 14 | 47 | 89 |
| Reversals | –25 | –11 | –16 | –52 | –36 | –19 | –50 | –105 |
| Exchange rate and other changes | –1 | 0 | –4 | –4 | 0 | 0 | 0 | 1 |
| **As of 31 Dec.** | **21** | **21** | **36** | **78** | **17** | **9** | **48** | **74** |

---

The post-model adjustment for the greater forecast uncertainty regarding global economic development particularly due to geopolitical crises and the threat of trade conflicts amounted to EUR 145 million as of the reporting date (31 Dec. 2024: EUR 100 million).

Provisions for losses on loans and advances also include money market investments and reverse repos.

In the reporting year, EUR 58 million (2024: EUR 100 million) in interest income was not collected for impaired loans and advances.

The contractual balance outstanding of financial assets that were written off during the reporting period and that are still subject to enforcement measures amounted to EUR 90 million as of the reporting date (31 Dec. 2024: EUR 98 million).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(38) Financial assets at fair value** 

**Analysis of Financial assets at fair value by class** 

---

| | | |
|:---|:---|:---|
| | <br> **31 Dec. 2025** | **31 Dec. 2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Loans and advances to banks – FVM** | |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 14 | 58 |
| **Loans and advances to customers – FVM** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans and advances | 8154 | 8232 |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 0 | 0 |
| **Securities and investments – FVM** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds and other fixed-income securities | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares and other non-fixed income securities | 4360 | 3919 |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity investments | 1142 | 1112 |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares in non-consolidated subsidiaries | 96 | 92 |
| **Other derivatives – FVM** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-related derivatives | 1205 | 1357 |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cross-currency derivatives | 610 | 947 |
| **Total** | **15581** | **15716** |

---

An amount of EUR 8.0 billion (31 Dec. 2024: EUR 8.1 billion) is attributable to Holding arrangements of the Federal Republic of Germany within Loans and advances to customers – FVM (Loans and advances).

Cross-currency swaps are presented under Cross-currency derivatives.

Other derivatives include derivatives with positive fair values of EUR 149 million (31 Dec. 2024: EUR 87 million) attributable to embedded derivatives that are bifurcated.

**(39) Value adjustments from macro fair value hedge accounting** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Value adjustments to assets under macro fair value hedge accounting |  | –10,444 |  | –9,375 |

---

The fair values attributable to hedged risks in the hedged portfolios in the at amortised cost measurement category are included in this item.

**(40) Derivatives designated for hedge accounting** 

**Analysis of derivatives with positive fair values designated for hedge accounting by type of hedging relationship** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Micro fair value hedge accounting | 1339 | 6572 |
| Macro fair value hedge accounting | 692 | 873 |
| **Total** | **2031** | **7445** |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Analysis of derivatives with positive fair values designated for hedge accounting** 

**by type of hedging instrument** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Interest-related derivatives | 1471 | 1529 |
| Cross-currency derivatives | 560 | 5916 |
| **Total** | **2031** | **7445** |

---

Only Interest-related derivatives are designated for macro fair value hedge accounting. Cross-currency swaps are presented under Cross-currency derivatives.

**(41) Investments accounted for using the equity method** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Investments accounted for using the equity method | 448 | 500 |
| **Total** | **448** | **500** |

---

The note regarding "Disclosures on shareholdings" includes a list of Investments accounted for using the equity method.

**(42) Non-current assets held for sale** 

This item from the statement of financial position contains an equity investment of KfW with a fair value of EUR 12 million (31 Dec. 2024: EUR 37 million of DEG) in a technology company that meets the criteria under IFRS 5 of "non-current assets held for sale", and is therefore to be reported separately.

Disposal of the equity investment within the next 12 months is highly likely.

All equity investments recognised as assets held for sale in the consolidated financial statements as of 31 December 2024 were sold as planned in 2025.

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to the consolidated statement of financial position</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(43) Property, plant and equipment** 

**Analysis of Property, plant and equipment by class** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Land and buildings | 802 | 818 |
| Plant and equipment | 66 | 65 |
| Rights of use arising from leases | 39 | 29 |
| Other property, plant and equipment | 18 | 10 |
| **Total** | **925** | **922** |

---

Additions to rights of use arising from leases amounted to EUR 28 million (2024: EUR 4 million). Payments in advance and assets under construction are presented in Other property, plant and equipment.

**Development of Property, plant and equipment in financial year 2025** 

---

| | | | |
|:---|:---|:---|:---|
| | | **Accumulated**<br>**depreciation,**<br>**impairment and**<br>**reversal of**<br>**impairment**<br>**losses** | |
| | **Acquisition/**<br>**production cost**<br><br><br>**EUR in millions** | **EUR in millions** | **Net carrying**<br>**amount**<br><br><br>**EUR in millions** |
| <br>**Carrying amount as of 1 Jan. 2025** | **1493** | **–571** | **922** |
| Additions/reversals of impairment losses | 70 | 0 | 70 |
| Disposals | –79 | 69 | –10 |
| Amortisation | 0 | –58 | –58 |
| Impairment losses | 0 | 0 | 0 |
| **Carrying amount as of 31 Dec. 2025** | **1485** | **–560** | **925** |

---

**Development of Property, plant and equipment in financial year 2024** 

---

| | | | |
|:---|:---|:---|:---|
| | | **Accumulated**<br>**depreciation,**<br>**impairment and**<br>**reversal of**<br>**impairment**<br>**losses** | |
| | **Acquisition/**<br>**production cost**<br><br><br>**EUR in millions** | **EUR in millions** | **Net carrying**<br>**amount**<br><br><br>**EUR in millions** |
| <br>**Carrying amount as of 1 Jan. 2024** | **1533** | **–604** | **929** |
| Additions/reversals of impairment losses | 70 | –2 | 68 |
| Disposals | –109 | 92 | –17 |
| Amortisation | 0 | –57 | –57 |
| Impairment losses | 0 | 0 | 0 |
| **Carrying amount as of 31 Dec. 2024** | **1493** | **–571** | **922** |

---

**117** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(44) Intangible assets** 

**Analysis of Intangible assets by class** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
| Software |  | 45 |  | 60 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Purchased software* | | *21* | | *24* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Internally generated software* | | *24* | | *36* | |
| Other intangible assets |  | 5 |  | 8 |  |
| **Total** |  | **50** |  | **69** |  |

---

Other intangible assets include, in particular, software under development.

**Development of Intangible assets in financial year 2025** 

---

| | | | |
|:---|:---|:---|:---|
| | | **Accumulated**<br>**amortisation,**<br>**impairment and**<br>**reversal of**<br>**impairment losses** | |
| | **Acquisition/**<br>**production cost**<br><br>**EUR in millions** | **EUR in millions** | **Net carrying amount**<br><br><br>**EUR in millions** |
| <br>**Carrying amount as of 1 Jan. 2025** | **459** | **–391** | **69** |
| Additions/reversals of impairment losses | 12 | 0 | 12 |
| Disposals | –15 | 15 | 0 |
| Amortisation | 0 | –30 | –30 |
| Impairment losses | 0 | 0 | 0 |
| **Carrying amount as of 31 Dec. 2025** | **456** | **–406** | **50** |

---

**Development of Intangible assets in financial year 2024** 

---

| | | | |
|:---|:---|:---|:---|
| | | **Accumulated**<br>**amortisation,**<br>**impairment and**<br>**reversal of**<br>**impairment losses** | |
| | **Acquisition/**<br>**production cost**<br><br>**EUR in millions** | **EUR in millions** | **Net carrying amount**<br><br><br>**EUR in millions** |
| <br>**Carrying amount as of 1 Jan. 2024** | **473** | **–391** | **82** |
| Additions/reversals of impairment losses | 19 | 0 | 19 |
| Disposals | –33 | 33 | 0 |
| Amortisation | 0 | –33 | –33 |
| Impairment losses | 0 | 0 | 0 |
| **Carrying amount as of 31 Dec. 2024** | **459** | **–391** | **69** |

---

**118** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(45) Income tax assets** 

**Analysis of Income tax assets** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Current income tax assets | 11 | 23 |
| Deferred income tax assets | 72 | 86 |
| **Total** | **83** | **109** |

---

Current income tax assets result from creditable taxes (investment income tax/solidarity surcharge) and tax receivables from advance tax payments of the taxable group subsidiaries during financial year 2025 and the preceding years.

Deferred income tax assets mostly result from valuation differences relating to the statement of financial position items listed below and to loss carryforwards. The amount of deferred tax assets relating to loss carryforwards is based on a corresponding forecast of future income. As of 31 December 2024, the volume of deferred tax assets not recognised was EUR 10 million (31 Dec. 2024: EUR 8 million) relating to loss carryforwards, and EUR 0 million (31 Dec. 2024: EUR 0 million) relating to accounting issues.

Further information on the amount recognised directly in equity as deferred taxes under Revaluation reserves can be found in the note on "Equity".

**Composition of deferred tax assets by statement of financial position item** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Financial assets at amortised cost | 50 | 52 |
| Financial assets at fair value | 0 | 2 |
| Financial liabilities at amortised cost | 0 | 0 |
| Financial liabilities at fair value | 0 | 2 |
| Provisions | 22 | 31 |
| Other statement of financial position items | 1 | 1 |
| Tax loss carryforwards | 2 | 4 |
| **Subtotal** | **75** | **92** |
| Offset against deferred tax liabilities | 3 | 6 |
| **Total** | **72** | **86** |

---

**119** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(46) Other assets** 

**Analysis of Other assets** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Other assets and receivables | 739 | 696 |
| Prepaid expenses | 54 | 57 |
| **Total** | **793** | **754** |

---

Other assets and receivables includes primarily the receivables from the Federal Agency for Special Tasks Associated with Unification *(Bundesanstalt für vereinigungsbedingte Sonderaufgaben – "BvS")* in the amount of EUR 682 million (31 Dec. 2024: EUR 634 million), which are offset in equal amount by provisions arising from the assumption of the operations of the State Insurance Company of the German Democratic Republic in liquidation *(Staatliche Versicherung der Deutschen Demokratischen Republik in Abwicklung – "SinA")*, an institution under public law.

**Development of assets from contractual rights** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2024** | **2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| **As of 1 Jan.** | | **0** | | **0** |
| Additions | | 0 | | 0 |
| Disposals |  | 0 |  | 0 |
| **As of 31 Dec.** |  | **0** |  | **0** |

---

**(47) Financial liabilities at amortised cost** 

**Analysis of Financial liabilities at amortised cost by class** 

---

| | | |
|:---|:---|:---|
| | **31 Dec. 2025** | **31 Dec. 2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Liabilities to banks** | |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Money-market transactions | 438 | 982 |
| &nbsp;&nbsp;&nbsp;&nbsp; Promissory note loans | 1287 | 1087 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other financial liabilities | 928 | 4393 |
| **Liabilities to customers** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Money-market transactions | 638 | 471 |
| &nbsp;&nbsp;&nbsp;&nbsp; Promissory note loans | 15722 | 23964 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other financial liabilities | 5557 | 5654 |
| **Certificated liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Money-market issues | 53919 | 32494 |
| &nbsp;&nbsp;&nbsp;&nbsp; Bonds and notes | 400645 | 416457 |
| **Total** | **479133** | **485502** |

---

Liabilities from cash collateral received are included in Other financial liabilities. These are attributable to cash collateral on derivatives in the amount of EUR 249 million (31 Dec. 2024: EUR 3,339 million), and to cash collateral on other transactions in the amount of EUR 941 million (31 Dec. 2024: EUR 1,148 million).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

New securities (money market issues, bonds and notes) under the sub-item certificated liabilities, with a nominal volume of EUR 212.7 billion and which are to be measured at amortised cost, were issued during the current financial year (2024: EUR 157.6 billion). The volume of repayments due to maturity during the same period amounted to EUR 191.0 billion (nominal) (2024: EUR 167.2 billion) and the volume of early repurchases to EUR 0.2 billion (nominal) (2024: EUR 0.5 billion).

Liabilities include liabilities from repurchase agreements and securities lending transactions under Other financial liabilities.

**(48) Financial liabilities at fair value** 

**Analysis of Financial liabilities at fair value by class** 

---

| | | |
|:---|:---|:---|
| | <br> **31 Dec. 2025** | **31 Dec. 2024** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Liabilities to banks – FVD** | |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Promissory note loans | 268 | 225 |
| **Liabilities to customers – FVD** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Promissory note loans | 590 | 719 |
| **Certificated liabilities – FVD** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Bonds and notes | 6062 | 6537 |
| **Other derivatives – FVM** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest-related derivatives | 1537 | 1494 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cross-currency derivatives | 847 | 799 |
| **Total** | **9305** | **9774** |

---

As in the previous year, there were no new issues in the current financial year under sub-item certificated liabilities to be measured at fair value. The volume of repayments due to maturity during the same period amounted to EUR 0.1 billion (nominal) (2024: EUR 0.2 billion) and the volume of early repurchases to EUR 0.2 billion (nominal) (2024: EUR 0.0 billion).

Cross-currency swaps are presented under Cross-currency derivatives.

Other derivatives include derivatives with negative fair values of EUR 2 million (31 Dec. 2024: EUR 5 million) attributable to embedded derivatives that are bifurcated.

**121** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(49) Value adjustments from macro fair value hedge accounting** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Value adjustments to liabilities under macro fair value hedge accounting |  | –16 |  | –16 |

---

The fair values attributable to hedged risks in the hedged portfolios in the at amortised cost measurement category are included in this item.

**(50) Derivatives designated for hedge accounting** 

**Analysis of derivatives with negative fair values designated for hedge accounting** 

**by type of hedging relationship** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Micro fair value hedge accounting | 7472 | 5619 |
| Macro fair value hedge accounting | 714 | 1362 |
| **Total** | **8185** | **6982** |

---

**Analysis of derivatives with negative fair values designated for hedge accounting** 

**by type of hedging instrument** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Interest-related derivatives | 3095 | 5068 |
| Cross-currency derivatives | 5091 | 1914 |
| **Total** | **8185** | **6982** |

---

**(51) Risk provisions** 

**Analysis of Provisions by class** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Provisions for pensions and similar commitments | 1881 | 1904 |
| Provisions for credit risks | 78 | 74 |
| Other provisions | 1069 | 969 |
| **Total** | **3027** | **2948** |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of Provisions for pensions and similar commitments in financial year 2025** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Defined benefit<br>obligations** | **Defined benefit<br>obligations** | **Early<br>retirement** | **Early<br>retirement** | **Partial<br>retirement** | **Partial<br>retirement** | **Total** | **Total** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
| **As of 1 Jan. 2025** |  | **1874** |  | **27** |  | **3** |  | **1904** |  |
| Additions |  | 111 |  | 60 |  | 2 |  | 172 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Current service cost* | | *45* | | *60* | | *2* | | *107* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Interest cost* | | *66* | | *0* | | *0* | | *66* | |
| Actuarial gains and losses |  | –135 |  | 0 |  | 0 |  | –135 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Changes in demographic assumptions* | | *0* | | *0* | | *0* | | *0* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Changes in financial assumptions* | | *–164* | | *0* | | *0* | | *–164* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Changes in experience adjustments* | | *29* | | *0* | | *0* | | *29* | |
| Utilisation |  | –65 |  | –7 |  | –1 |  | –73 |  |
| Reversals |  | 0 |  | –4 |  | 0 |  | –4 |  |
| Transfers |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Contributions by members (recognised in equity) |  | 16 |  | 0 |  | 0 |  | 16 |  |
| **As of 31 Dec. 2025** |  | **1800** |  | **77** |  | **3** |  | **1881** |  |

---

The average expected residual term of the defined-benefit pension obligations was 15.0 years as of 31 December 2025 (31 Dec. 2024: 16.0 years).

**Development of Provisions for pensions and similar commitments in financial year 2024** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | <br> **Defined benefit<br>obligations** | <br> **Defined benefit<br>obligations** | **Early<br>retirement** | **Early<br>retirement** | **Partial<br>retirement** | **Partial<br>retirement** | **Total** | **Total** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
| **As of 1 Jan. 2024** |  | **1809** |  | **33** |  | **2** |  | **1844** |  |
| Additions |  | 108 |  | 3 |  | 1 |  | 112 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Current service cost* | | *46* | | *0* | | *1* | | *48* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Interest cost* | | *62* | | *2* | | *0* | | *64* | |
| Actuarial gains and losses |  | 6 |  | 0 |  | 0 |  | 6 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Changes in demographic assumptions* | | *–22* | | *0* | | *0* | | *–22* | |
| &nbsp;&nbsp;&nbsp;&nbsp; *Changes in experience adjustments* | | *28* | | *0* | | *0* | | *28* | |
| Utilisation |  | –63 |  | –9 |  | –1 |  | –73 |  |
| Contributions by members (recognised in equity) |  | 14 |  | 0 |  | 0 |  | 14 |  |
| **As of 31 Dec. 2024** |  | **1874** |  | **27** |  | **3** |  | **1904** |  |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Provisions for pensions and similar commitments are calculated on the basis of the 2018 G Heubeck actuarial tables and the following other actuarial assumptions:

**Actuarial assumptions in % p.a.** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
| Technical discount rate | 4.08 | 3.49 |
| Rate of salary increases | 3.00 | 3.00 |
| Rate of pension increases | 2.00 | 2.00 |
| Rate of staff turnover | 3.23 | 3.23 |

---

The technical discount rate as of 31 December 2025 reflects an adjustment to the average residual term of the defined benefit pension obligations translating into an adjustment to the average capital commitment period used.

**Sensitivity of defined benefit pension obligations as of 31 December 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Difference** | | **Difference** | |
|  |  | **Change in**<br>**defined benefit**<br>**obligations** |  | **Change in**<br>**defined benefit**<br>**obligations** |
|  |  | **EUR in millions** |  | **EUR in millions** |
| Life expectancy | +1 year | 64 | –1 year | –67 |
| Technical discount rate | +0.25% | –63 | –0.25% | 67 |
| Rate of salary increases | +0.50% | 10 | –0.50% | –10 |
| Rate of pension increases | +0.50% | 94 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–0.50% | –52 |
| Rate of staff turnover | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;+1.00% | –1 | –1.00% | 1 |

---

**Sensitivity of defined benefit pension obligations as of 31 December 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Difference** | | **Difference** | |
|  |  | **Change in**<br>**defined benefit**<br>**obligations** |  | **Change in**<br>**defined benefit**<br>**obligations** |
|  |  | **EUR in millions** |  | **EUR in millions** |
| Life expectancy | +1 year | 71 | –1 year | –73 |
| Technical discount rate | +0.25% | –70 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–0.25% | 75 |
| Rate of salary increases | +0.50% | 13 | –0.50% | –12 |
| Rate of pension increases | +0.50% | 103 | –0.50% | –57 |
| Rate of staff turnover | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;+1.00% | –1 | –1.00% | 1 |

---

**Development of Risk provisions for lending business** 

For the development of Risk provisions for lending business (off-balance sheet transactions) see the note regarding "Risk provisions".

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of Other provisions in financial year 2025** 

---

| | | | |
|:---|:---|:---|:---|
| | <br> **Obligations to**<br> **employees** | **Other**<br>**provisions** | <br> **Total** |
| | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| <br>**As of 1 Jan. 2025** | **38** | **931** | **969** |
| Additions | 12 | 154 | 166 |
| Utilisation | –10 | –51 | –60 |
| Reversals | 0 | –6 | –6 |
| **As of 31 Dec. 2025** | **40** | **1029** | **1069** |

---

The Obligations to employees column shows other long-term employee benefits including provisions for service anniversaries. Corresponding actuarial reports have been prepared for these obligations.

Other provisions include provisions for the obligation to award grants under the ERP Special Fund in subsequent years in the amount of EUR 124 million (31 Dec. 2024: EUR 135 million).

An Other provisions item in the amount of EUR 149 million (31 Dec. 2024: EUR 100 million) is reported due to the interest rate being below the market rate for irrevocable promotional loan commitments with additional promotional funds in the form of interest rate reductions impacting KfW's earnings position. Changes to existing provisions are presented as net additions or, in the case of a decline, as a transfer via the adjustments to the carrying amounts of already disbursed promotional loans recognised on the assets side under Financial assets at amortised cost – Loans and advances to banks or customers.

Other provisions also comprise obligations arising from the assumption of the operations of the State Insurance Company of the German Democratic Republic in liquidation *(Staatliche Versicherung der Deutschen Demokra-tischen Republik in Abwicklung – "SinA")*, an institution under public law, in the amount of EUR 682 million (31 Dec. 2024: EUR 634 million), which are offset by receivables in the same amount from the Federal Agency for Special Tasks Associated with Unification (*Bundesanstalt für vereinigungsbedingte Sonderaufgaben – "BvS"*) recognised in Other assets. Other provisions also include provisions for legal risks offset by receivables from the Federal Government in the same amount.

**Development of Other provisions in financial year 2024** 

---

| | | | |
|:---|:---|:---|:---|
| | **Obligations to<br>employees** | <br> **Other<br>provisions** | <br> **Total** |
| | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| <br>**As of 1 Jan. 2024** | **35** | **842** | **877** |
| Additions | 11 | 154 | 165 |
| Utilisation | –8 | –53 | –61 |
| Reversals | –1 | –12 | –13 |
| **As of 31 Dec. 2024** | **38** | **931** | **969** |

---

**(52) Income tax liabilities** 

**Analysis of Income tax liabilities** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Current income tax liabilities | 46 | 206 |
|  Deferred income tax liabilities | 56 | 23 |
|  **Total** | **102** | **230** |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Current income tax liabilities as of 31 December 2025 primarily consisted of tax provisions at the level of taxable companies included in the group.

Deferred income tax liabilities mostly resulted from valuation differences relating to the statement of financial position items listed below.

**Composition of deferred tax liabilities by statement of financial position item** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Financial assets at fair value – Other derivatives | 0 | 0 |
|  Financial assets at amortised cost | 0 | 0 |
|  Financial assets at fair value – Securities and investments | 55 | 24 |
|  Investments accounted for using the equity method | 3 | 4 |
|  Other statement of financial position items | 1 | 1 |
|  **Subtotal** | **59** | **29** |
|  Offset against deferred tax assets | 3 | 6 |
|  **Total** | **56** | **23** |

---

**(53) Other liabilities** 

**Analysis of Other liabilities** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Other financial liabilities | 274 | 300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof Accruals* | 201 | 202 |
| Deferred income | 49 | 44 |
|  Lease liabilities | 39 | 30 |
|  **Total** | **362** | **374** |

---

Deferred income contains liabilities resulting from contractual obligations ("contract liabilities" in accordance with IFRS 15). These developed as follows:

**Development of liabilities from contractual obligations** 

---

| | | |
|:---|:---|:---|
| | <br> **2025** | <br> **2024** |
| | **EUR in millions** | **EUR in millions** |
| <br> **As of 1 Jan.** | **43** | **37** |
|  Additions | 15 | 25 |
|  Disposals | –19 | –19 |
|  **As of 31 Dec.** | **38** | **43** |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(54) Equity** 

**Analysis of Equity** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2025** |  | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |  | **EUR in millions** |
|  Subscribed capital |  | 3750 |  | 3750 |
| less uncalled outstanding contributions |  | –450 |  | –450 |
| **Paid-in subscribed capital** |  | **3300** |  | **3300** |
| Capital reserve |  | 8447 |  | 8447 |
|  Reserve from the ERP Special Fund |  | 1191 |  | 1191 |
|  Retained earnings |  | 27555 |  | 26552 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Statutory reserve under Article 10 (2) KfW Law* | | *1875* | | *1875* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Special reserve under Article 10 (3) KfW Law* | | *18916* | | *17988* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Special reserve less the special loss account from provisioning pursuant to Section 17 (4) of the D-Mark Balance Sheet Law* | | *21* | | *21* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Other retained earnings* | | *6742* | | *6668* |
|  Revaluation reserves |  | 131 |  | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Valuation result from the change in own credit risk of liabilities designated at fair value through profit or loss* | | *79* | | *160* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Actuarial gains and losses from defined-benefit pension obligations (after tax)* | | *52* | | *–77* |
|  **Total** |  | **40623** |  | **39573** |

---

The Federal Government owns 80% of KfW's share capital, the German federal states 20%. In accordance with Article 1a of the KfW Law, the Federal Republic of Germany is liable for certain liabilities of KfW. There is no profit distribution in accordance with Article 10 (1) of the KfW Law. KfW's net income amounting to EUR 928 million (2024: EUR 871 million) was used to increase the special reserve under Article 10 (3) KfW Law.

Equity forms the basis for the capital available for covering risks, which is matched against the capital requirements derived from internal management.

For information concerning Equity in relation to risk-bearing capacity, see the risk report in the combined management report.

The revaluation reserves developed as follows:

**Development of revaluation reserves** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Valuation result from<br>the change in own<br>credit risk of liabilities<br>designated at fair value<br>through profit or loss** | **Valuation result from<br>the change in own<br>credit risk of liabilities<br>designated at fair value<br>through profit or loss** | **Actuarial gains<br>and losses from<br>defined benefit<br>pension obligations** | **Actuarial gains<br>and losses from<br>defined benefit<br>pension obligations** | **Effects of<br>deferred taxes** | **Effects of<br>deferred taxes** | **Total** | **Total** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
|  **As of 1 Jan. 2024** |  | **55** |  | **–68** |  | **–2** |  | **–15** |  |
|  Consolidated comprehensive income |  | 105 |  | –6 |  | –1 |  | 98 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Other comprehensive income* | | *105* | | *–6* | | *–1* | | *98* | |
|  **As of 31 Dec. 2024** |  | **160** |  | **–74** |  | **–3** |  | **83** |  |
|  Consolidated comprehensive income |  | –81 |  | 135 |  | –6 |  | 48 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Other comprehensive income* | | *–81* | | *135* | | *–6* | | *48* | |
|  **As of 31 Dec. 2025** |  | **79** |  | **61** |  | **–9** |  | **131** |  |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(55) Expected time to maturity for assets and liabilities** 

The table below breaks down the assets and liabilities by maturity, or expected realisation.

There is a differentiation between assets and liabilities due or realisable within up to 12 months after the reporting date (short term) and those due or realisable more than 12 months after the reporting date (long term).

Financial instruments without contractually agreed terms are classed as short term. These also include the statement of financial position items Cash reserves, Non-current assets held for sale, and Current income tax assets and liabilities.

The long term category includes the items Investments accounted for using the equity method, Property, plant and equipment, Intangible assets, and Deferred Income tax assets and liabilities.

**Assets** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |
|  | **short term** | **long term** | **short term** | **long term** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
|  Cash reserves | 19535 | 0 | 26522 | 0 |
| Financial assets at amortised cost | 106667 | 405043 | 107460 | 395207 |
| Financial assets at fair value | 379 | 15202 | 697 | 15020 |
| Value adjustments from macro fair value hedge accounting | –161 | –10283 | –1271 | –8103 |
| Derivatives designated for hedge accounting | 572 | 1458 | 2127 | 5318 |
| Investments accounted for using the equity method | 0 | 448 | 0 | 500 |
| Non-current assets held for sale | 12 | 0 | 37 | 0 |
| Property, plant and equipment | 0 | 925 | 0 | 922 |
| Intangible assets | 0 | 50 | 0 | 69 |
| Income tax assets | 11 | 72 | 23 | 86 |
| Other assets | 111 | 682 | 119 | 635 |
|  **Total** | **127127** | **413596** | **135713** | **409652** |

---

**Liabilities and equity** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br> **31 Dec. 2025** | <br> **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |
|  | **short term** | **long term** | **short term** | **long term** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
|  Financial liabilities at amortised cost | 135541 | 343591 | 134496 | 351006 |
| Financial liabilities at fair value | 441 | 8864 | 344 | 9430 |
| Value adjustments from macro fair value hedge accounting | –2 | –14 | –2 | –14 |
| Derivatives designated for hedge accounting | 1696 | 6490 | 1268 | 5713 |
| Provisions | 218 | 2809 | 165 | 2783 |
| Income tax liabilities | 46 | 56 | 206 | 23 |
| Other liabilities | 325 | 37 | 348 | 27 |
|  **Total** | **138266** | **361834** | **136825** | **368968** |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Notes to financial instruments
The different IFRS 9 measurement categories are abbreviated as follows in the Notes to financial instruments:

---

| | | |
|:---|:---|:---|
| ACO | = | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial instruments measured at amortised cost |
| FVM | = | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial instruments measured at fair value |
| FVD | = | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial instruments designated at fair value |

---

**(56) Gains and losses from financial instruments by measurement category** 

The following tables show the results from financial instruments included in the different statement of comprehensive income items presented by measurement category. The result from foreign currency translation is not included.

**Gains and losses from financial instruments by measurement category in financial year 2025** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | | **Financial liabilities**<br>**at fair value** | **Financial liabilities**<br>**at fair value** | | |
|  |<br>**Financial**<br>**assets at**<br> **amortised**<br>**cost** |<br>**Financial**<br>**liabilities at**<br> **amortised**<br>**cost** |<br>**Financial**<br>**assets at**<br> **fair value –**<br>**FVM** | | |<br>**Derivatives**<br>**designated**<br>**for hedge**<br>**accounting** | |
|  | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **FVM**<br><br>**EUR in**<br> **millions** | **FVD**<br><br>**EUR in**<br> **millions** | **EUR in**<br>**millions** |<br>**Total**<br><br>**EUR in**<br> **millions** |
| Interest income | 11.361<sup>1)</sup> | 0 | 607 | 410 | 0 | 3118 | 15495 |
| Interest expense | –421 | –10545 | –61 | –195 | –333 | –1337 | –12893 |
| Net gains/losses from risk provisions | –158 | 0 | 0 | 0 | 0 | 0 | –158 |
| Commission income | 11 | 0 | 0 | 0 | 0 | 0 | 11 |
| Commission expense | –11 | –8 | 0 | 0 | 0 | 0 | –19 |
| Net gains/losses from hedge accounting | –1070 | –329 | 0 | 0 | 0 | 1272 | –128 |
| Net gains/losses from other financial instruments at fair value through profit or loss | 0 | 0 | 111 | –133 | –22 | 0 | –44 |
| Net gains/losses from disposal of financial assets at amortised cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Net other operating income or loss | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in revaluation reserves | 0 | 0 | 0 | 0 | –81 | 0 | –81 |
| **Total** | **9712** | **–10883** | **656** | **82** | **–436** | **3052** | **2184** |

---

<sup>1)</sup> Includes interest income from financial guarantees of EUR 34 million

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Gains and losses from financial instruments by measurement category in financial year 2024** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | | **Financial liabilities**<br>**at fair value** | **Financial liabilities**<br>**at fair value** | | |
|  |<br>**Financial**<br>**assets at**<br> **amortised**<br>**cost** |<br>**Financial**<br>**liabilities at**<br> **amortised**<br>**cost** |<br>**Financial**<br>**assets at**<br> **fair value –**<br>**FVM** | | |<br>**Derivatives**<br> **designated**<br>**for hedge**<br>**accounting** | |
|  | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **FVM**<br><br>**EUR in**<br> **millions** | **FVD**<br><br>**EUR in**<br> **millions** | **EUR in**<br>**millions** |<br>**Total**<br><br>**EUR in**<br> **millions** |
| Interest income | 12.644<sup>1)</sup> | 0 | 808 | 241 | 0 | 7488 | 21181 |
| Interest expense | –406 | –9579 | –89 | –430 | –356 | –7765 | –18624 |
| Net gains/losses from risk provisions | 39 | 0 | 0 | 0 | 0 | 0 | 39 |
| Commission income | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
| Commission expense | –10 | –5 | 0 | 0 | 0 | 0 | –16 |
| Net gains/losses from hedge accounting | 6085 | –6550 | 0 | 0 | 0 | 572 | 107 |
| Net gains/losses from other financial instruments at fair value through profit or loss | 0 | 0 | –162 | 58 | 194 | 0 | 90 |
| Net gains/losses from disposal of financial assets at amortised cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Net other operating income or loss | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
| Change in revaluation reserves | 0 | 0 | 0 | 0 | 105 | 0 | 105 |
| **Total** | **18356** | **–16132** | **557** | **–130** | **–58** | **295** | **2888** |

---

<sup>1)</sup> Includes interest income from financial guarantees of EUR 38 million

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(57) Disclosures on fair value** 

The following tables show the financial instruments measured at fair value or for which the fair value is indicated in the Notes according to the valuation methods used. There is also a comparison of fair value and carrying amount.

**Fair value of financial instruments by valuation method as of 31 December 2025** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Fair Value** | **Fair Value** | **Fair Value** | | |
| |<br>**Carrying**<br>**amount**<br>**(statement**<br> **of financial**<br>**position)** | | | | | |
| | **EUR in**<br> **millions** | **Level 1**<br><br><br>**EUR in**<br> **millions** | **Level 2**<br><br><br>**EUR in**<br> **millions** | **Level 3**<br><br><br>**EUR in**<br> **millions** |<br>**Total**<br><br><br>**EUR in**<br> **millions** |<br>**Difference**<br>**from**<br>**carrying**<br>**amount**<br>**EUR in**<br> **millions** |
| <br>**Assets** |  |  |  |  | |  |
| Cash reserves | 19535 | 19535 | 0 | 0 | 19535 | 0 |
| Financial assets at amortised cost |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks | 335625 | 0 | 46850 | 277437 | 324287 | –11338 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers | 138351 | 0 | 989 | 134999 | 135988 | –2363 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments | 37734 | 29334 | 3489 | 4965 | 37788 | 54 |
| Financial assets at fair value |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks – FVM | 14 | 0 | 0 | 14 | 14 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers – FVM | 8154 | 0 | 8026 | 128 | 8154 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – FVM | 5599 | 102 | 3360 | 2136 | 5599 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 1814 | 0 | 1812 | 2 | 1814 | 0 |
| Value adjustments from macro fair value hedge accounting | –10444 | n/a | n/a | n/a | n/a | 10444 |
| Derivatives designated for hedge accounting | 2031 | 0 | 2031 | 0 | 2031 | 0 |
| Non-current assets held for sale | 12 | 0 | 0 | 12 | 12 | 0 |
| **Total** | **538424** | **48971** | **66557** | **419693** | **535221** | **–3203** |
| **Liabilities and equity** |  |  |  |  |  |  |
| Financial liabilities at amortised cost |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks | 2652 | 0 | 2634 | 0 | 2634 | –18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers | 21917 | 0 | 21201 | 0 | 21201 | –715 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities | 454564 | 381679 | 69441 | 4 | 451124 | –3440 |
| Financial liabilities at fair value |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks – FVD | 268 | 0 | 268 | 0 | 268 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers – FVD | 590 | 0 | 590 | 0 | 590 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities – FVD | 6062 | 3990 | 2066 | 6 | 6062 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 2384 | 0 | 2369 | 15 | 2384 | 0 |
| Value adjustments from macro fair value hedge accounting | –16 | n/a | n/a | n/a | n/a | 16 |
| Derivatives designated for hedge accounting | 8185 | 0 | 8185 | 0 | 8185 | 0 |
| **Total** | **496608** | **385669** | **106755** | **26** | **492450** | **–4158** |

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**131** 

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**Fair value of financial instruments by valuation method as of 31 December 2024** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Fair Value** | **Fair Value** | **Fair Value** | | |
| |<br>**Carrying**<br>**amount**<br>**(statement**<br> **of financial**<br>**position)** | | | | | |
| | **EUR in**<br> **millions** | **Level 1**<br><br><br>**EUR in**<br> **millions** | **Level 2**<br><br><br>**EUR in**<br> **millions** | **Level 3**<br><br><br>**EUR in**<br> **millions** |<br>**Total**<br><br><br>**EUR in**<br> **millions** |<br>**Difference**<br>**from**<br>**carrying**<br>**amount**<br>**EUR in**<br> **millions** |
| <br>**Assets** |  |  |  |  | |  |
| Cash reserves | 26522 | 26522 | 0 | 0 | 26522 | 0 |
| Financial assets at amortised cost |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks | 320406 | 0 | 28320 | 279286 | 307607 | –12799 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers | 144278 | 0 | 778 | 141528 | 142306 | –1972 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments | 37982 | 29660 | 3257 | 4899 | 37816 | –167 |
| Financial assets at fair value |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks – FVM | 58 | 0 | 0 | 58 | 58 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers – FVM | 8232 | 0 | 8085 | 147 | 8232 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – FVM | 5123 | 91 | 2699 | 2334 | 5123 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 2303 | 0 | 2299 | 4 | 2303 | 0 |
| Value adjustments from macro fair value hedge accounting | –9375 | n/a | n/a | n/a | n/a | 9375 |
| Derivatives designated for hedge accounting | 7445 | 0 | 7445 | 0 | 7445 | 0 |
| Non-current assets held for sale | 37 | 0 | 37 | 0 | 37 | 0 |
| **Total** | **543012** | **56273** | **52920** | **428256** | **537449** | **–5563** |
| **Liabilities and equity** |  |  |  |  |  |  |
| Financial liabilities at amortised cost |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks | 6462 | 0 | 6447 | 0 | 6447 | –15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers | 30089 | 0 | 29367 | 0 | 29367 | –722 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities | 448951 | 396089 | 46383 | 0 | 442472 | –6479 |
| Financial liabilities at fair value |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks – FVD | 225 | 0 | 225 | 0 | 225 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers – FVD | 719 | 0 | 719 | 0 | 719 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities – FVD | 6537 | 4152 | 2385 | 0 | 6537 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 2293 | 0 | 2275 | 18 | 2293 | 0 |
| Value adjustments from macro fair value hedge accounting | –16 | n/a | n/a | n/a | n/a | 16 |
| Derivatives designated for hedge accounting | 6982 | 0 | 6982 | 0 | 6982 | 0 |
| **Total** | **502241** | **400241** | **94782** | **18** | **495042** | **–7200** |

---

Interest-related changes in value are also included in measuring the fair value of the financial instruments. Accordingly, when the comparison is made with the carrying amount, it is necessary to take into account the changes in value (interest-related) resulting from the recognition of Loans and advances and borrowings in macro fair value hedge accounting.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Change in level assignment of financial instruments measured at fair value with a transfer between levels 1 and 2 in financial year 2025** 

---

| | | |
|:---|:---|:---|
| | **Transfer<br>from level 1**<br>**to level 2** | **Transfer<br>from level 2**<br>**to level 1** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Assets** |  |  |
| Financial assets at fair value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks – FVM | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers – FVM | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – FVM | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 0 | 0 |
| Derivatives designated for hedge accounting | 0 | 0 |
| Non-current assets held for sale | 0 | 0 |
| **Total** | **0** | **0** |
| **Liabilities and equity** |  |  |
| Financial liabilities at fair value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks – FVD | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers – FVD | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities – FVD | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 0 | 0 |
| Derivatives designated for hedge accounting | 0 | 0 |
| **Total** | **0** | **0** |

---

The group did not make any transfers between levels in financial year 2025. The group primarily made transfers from level 2 to level 1 in financial year 2024 as quoted market prices from active markets were available again for the respective financial instruments.

**133** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Change in level assignment of financial instruments measured at fair value with a transfer between levels 1 and 2 in financial year 2024** 

---

| | | |
|:---|:---|:---|
| | **Transfer<br>from level 1 to<br>level 2** | **Transfer<br>from level 2 to<br>level 1** |
| | **EUR in millions** | **EUR in millions** |
| <br>**Assets** |  |  |
| Financial assets at fair value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks – FVM | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers – FVM | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – FVM | 0 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 0 | 0 |
| Derivatives designated for hedge accounting | 0 | 0 |
| Non-current assets held for sale | 0 | 0 |
| **Total** | **0** | **3** |
| **Liabilities and equity** |  |  |
| Financial liabilities at fair value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks – FVD | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers – FVD | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities – FVD | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 0 | 0 |
| Derivatives designated for hedge accounting | 0 | 0 |
| **Total** | **0** | **0** |

---

**134** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of financial assets measured at fair value assigned to level 3 in financial year 2025** 

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | | | | |  |
|  | **Loans and**<br> **advances to<br>banks**<br>**– FVM** | **Loans and**<br> **advances to<br>banks**<br>**– FVM** | **Loans and<br> advances to<br>customers –<br>FVM** | **Loans and<br> advances to<br>customers –<br>FVM** | **Securities<br>and<br>investments<br>– FVM** | **Securities<br>and<br>investments<br>– FVM** | **Other<br> derivatives<br>– FVM** | **Other<br> derivatives<br>– FVM** | **Non-current<br>assets held<br>for sale** | **Non-current<br>assets held<br>for sale** | **Total** | **Total** |  |
|  | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br>millions** | **EUR in<br> millions** | **EUR in<br> millions** |  |
| **As of 1 Jan. 2025** |  | **58** |  | **147** |  | **2334** |  | **4** |  | **0** |  | **2542** |  |
|  **A.Changes recognised in the income statement** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Net interest and commission income |  | 0 |  | –2 |  | 0 |  | 0 |  | 0 |  | –3 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *–2* | | *0* | | *0* | | *0* | | *–2* | |
| Net gains/losses from hedge accounting |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *0* | | *0* | | *0* | |
| Net gains/losses from other financial instruments at fair value through profit or loss |  | –12 |  | 6 |  | 35 |  | –1 |  | 7 |  | 35 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *5* | | *22* | | *82* | | *–1* | | *7* | | *116* | |
| **Total changes recognised in the income statement** |  | **–12** |  | **4** |  | **35** |  | **–1** |  | **7** |  | **32** |  |
|  **B.Changes recognised directly in equity** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Changes in level assignment |  | 0 |  | 0 |  | –229 |  | 1 |  | 0 |  | –228 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer from level 1 and level 2 |  | 0 |  | 0 |  | 548 |  | 1 |  | 0 |  | 549 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer to level 1 and level 2 |  | 0 |  | 0 |  | –777 |  | 0 |  | 0 |  | –777 |  |
| Additions |  | 0 |  | 15 |  | 134 |  | 4 |  | 0 |  | 152 |  |
| Disposals |  | –26 |  | –32 |  | –130 |  | –4 |  | 0 |  | –192 |  |
| **Total changes recognised directly in equity** |  | **–26** |  | **–17** |  | **–226** |  | **1** |  | **0** |  | **–268** |  |
| Changes in consolidated group |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Exchange rate changes |  | –6 |  | –6 |  | –1 |  | –2 |  | 0 |  | –15 |  |
| Other changes |  | 0 |  | 0 |  | –5 |  | 0 |  | 5 |  | 0 |  |
| **As of 31 Dec. 2025** |  | **14** |  | **128** |  | **2136** |  | **2** |  | **12** |  | **2292** |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of financial liabilities measured at fair value assigned to level 3 in financial year 2025** 

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | | |  |
|  | **Liabilities<br>to banks**<br>**– FVD** | **Liabilities<br>to banks**<br>**– FVD** | **Liabilities<br>to customers**<br>**– FVD** | **Liabilities<br>to customers**<br>**– FVD** | **Certificated<br>liabilities**<br>**– FVD** | **Certificated<br>liabilities**<br>**– FVD** | **Other<br>derivatives**<br>**– FVM** | **Other<br>derivatives**<br>**– FVM** | **Total** | **Total** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
| **As of 1 Jan. 2025** |  | **0** |  | **0** |  | **0** |  | **18** |  | **18** |  |
| **A. Changes recognised in the income statement** |  |  |  |  |  |  |  |  |  |  |  |
| Net interest and commission income |  | 0 |  | 0 |  | 0 |  | –1 |  | –1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *–1* | | *–1* | |
| Net gains/losses from hedge accounting |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *0* | | *0* | |
| Net gains/losses from other financial instruments at fair value through profit or loss |  | 0 |  | 0 |  | 0 |  | –4 |  | –4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *–3* | | *–3* | |
| **Total changes recognised in the income statement** |  | **0** |  | **0** |  | **0** |  | **–6** |  | **–6** |  |
| **B. Changes recognised directly in equity** |  |  |  |  |  |  |  |  |  |  |  |
| Change in revaluation reserves |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *0* | | *0* | |
| Changes in level assignment |  | 0 |  | 0 |  | 6 |  | 3 |  | 10 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer from level 1 and level 2 |  | 0 |  | 0 |  | 6 |  | 3 |  | 10 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer to level 1 and level 2 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Additions |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Disposals |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| **Total changes recognised directly in equity** |  | **0** |  | **0** |  | **6** |  | **3** |  | **10** |  |
| Exchange rate changes |  | 0 |  | 0 |  | 0 |  | –1 |  | –1 |  |
| Other changes |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| **As of 31 Dec. 2025** |  | **0** |  | **0** |  | **6** |  | **15** |  | **22** |  |

---

The group carried out transfers from levels 1 and 2 to level 3 because in financial years 2025 and 2024 quoted prices on the active market or observable market parameters were no longer available or their effect on fair value was deemed material. In contrast, the group carried out transfers from level 3 to levels 1 and 2 if quoted prices on the active market or observable market parameters were available again or the effect of non-observable parameters on fair value was deemed immaterial.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of financial assets measured at fair value assigned to level 3 in financial year 2024** 

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | **Financial assets at fair value** | | | | |  |
|  | **Loans and<br>advances to<br>banks**<br>**– FVM** | **Loans and<br>advances to<br>banks**<br>**– FVM** | **Loans and<br>advances to<br>customers<br>– FVM** | **Loans and<br>advances to<br>customers<br>– FVM** | **Securities<br>and<br>investments<br>– FVM** | **Securities<br>and<br>investments<br>– FVM** | **Other<br>derivatives<br>– FVM** | **Other<br>derivatives<br>– FVM** | **Non-current<br>assets held<br>for sale** | **Non-current<br>assets held<br>for sale** | **Total** | **Total** |  |
|  | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in**<br> **millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** |  |
| **As of 1 Jan. 2024** |  | **41** |  | **284** |  | **1370** |  | **44** |  | **12** |  | **1751** |  |
|  **A.Changes recognised in the income statement** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Net interest and commission income |  | 0 |  | –5 |  | 0 |  | 0 |  | 0 |  | –5 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *–4* | | *0* | | *0* | | *0* | | *–4* | |
| Net gains/losses from hedge accounting |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *0* | | *0* | | *0* | |
| Net gains/losses from other financial instruments at fair value through profit or loss |  | 14 |  | 0 |  | 72 |  | 4 |  | 0 |  | 90 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *16* | | *1* | | *–9* | | *–2* | | *0* | | *5* | |
| **Total changes recognised in the income statement** |  | **14** |  | **–5** |  | **72** |  | **4** |  | **0** |  | **85** |  |
| **B. Changes recognised directly in equity** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Changes in level assignment |  | 0 |  | 0 |  | 919 |  | –43 |  | 0 |  | 877 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer from level 1 and level 2 |  | 0 |  | 0 |  | 1200 |  | 0 |  | 0 |  | 1200 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer to level 1 and level 2 |  | 0 |  | 0 |  | –280 |  | –43 |  | 0 |  | –323 |  |
| Additions |  | 0 |  | 13 |  | 450 |  | 6 |  | 0 |  | 470 |  |
| Disposals |  | 0 |  | –152 |  | –491 |  | –7 |  | 0 |  | –651 |  |
| **Total changes recognised directly in equity** |  | **0** |  | **–139** |  | **879** |  | **–44** |  | **0** |  | **695** |  |
| Changes in consolidated group |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Exchange rate changes |  | 3 |  | 7 |  | 1 |  | 1 |  | 0 |  | 12 |  |
| Other changes |  | 0 |  | 0 |  | 12 |  | –1 |  | –12 |  | –1 |  |
| **As of 31 Dec. 2024** |  | **58** |  | **147** |  | **2334** |  | **4** |  | **0** |  | **2542** |  |

---

**137** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Development of financial liabilities measured at fair value assigned to level 3 in financial year 2024** 

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | **Financial liabilities at fair value** | | |  |
|  | **Liabilities<br>to banks**<br>**– FVD** | **Liabilities<br>to banks**<br>**– FVD** | **Liabilities<br>to customers**<br>**– FVD** | **Liabilities<br>to customers**<br>**– FVD** | **Certificated<br>liabilities**<br>**– FVD** | **Certificated<br>liabilities**<br>**– FVD** | **Other<br>derivatives**<br>**– FVM** | **Other<br>derivatives**<br>**– FVM** | **Total** | **Total** |  |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |  |
| **As of 1 Jan. 2024** |  | **0** |  | **0** |  | **0** |  | **23** |  | **23** |  |
| **A. Changes recognised in the income statement** |  |  |  |  |  |  |  |  |  |  |  |
| Net interest and commission income |  | 0 |  | 0 |  | 0 |  | 3 |  | 3 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *4* | | *4* | |
| Net gains/losses from hedge accounting |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *0* | | *0* | |
| Net gains/losses from other financial instruments at fair value through profit or loss |  | 0 |  | 0 |  | 0 |  | –6 |  | –6 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *0* | | *0* | |
| **Total changes recognised in the income statement** |  | **0** |  | **0** |  | **0** |  | **–3** |  | **–3** |  |
| **B. Changes recognised directly in equity** |  |  |  |  |  |  |  |  |  |  |  |
| Change in revaluation reserves |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Contracts still valid at year-end* | | *0* | | *0* | | *0* | | *0* | | *0* | |
| Changes in level assignment |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer from level 1 and level 2 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer to level 1 and level 2 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Additions |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| **Disposals** |  | **0** |  | **0** |  | **0** |  | **–2** |  | **–2** |  |
| **Total changes recognised directly in equity** |  | **0** |  | **0** |  | **0** |  | **–2** |  | **–2** |  |
| Exchange rate changes |  | 0 |  | 0 |  | 0 |  | 2 |  | 2 |  |
| Other changes |  | 0 |  | 0 |  | 0 |  | –1 |  | –1 |  |
| **As of 31 Dec. 2024** |  | **0** |  | **0** |  | **0** |  | **18** |  | **18** |  |

---

**138** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The following tables show how an alternative determination of relevant unobservable data, i.e., values in best and worst case scenarios, would impact fair values for significant products allocated to this level.

**Information on unobservable data as of 31 December 2025** 

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Major classes** | **Valuation method**<br> **used** | **Relevant unobservable**<br> **data with alternative**<br> **determination** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Range** |
| Loans and advances to banks and loans and advances to customers – FVM | Discounted cash flow method | Risk costs | +/– 10% |
| Securities and investments from equity finance business – FVM | Discounted cash flow method<sup>1)</sup> | Cost of capital | 0.5% to 1.5%<br> (absolute fluctuation) |
|  |  | Long-term result | 5%<br> (relative fluctuation) |
|  |  | Risk costs | +/– 10% |
| Other derivatives – derivatives with positive or negative fair values, which comprise a hedging instrument for customers with respect to export and project finance – FVM | Discounted cash flow method | Expected loss | +/– 30% |

---

<sup>1)</sup> If the cost of capital and the long-term result could not be used for valuation, the sensitivities were calculated on the basis of the cost of risk.

**Information on unobservable data as of 31 December 2024** 

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Major classes** | **Valuation method**<br> **used** | **Relevant unobservable**<br> **data with alternative**<br> **determination** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Range** |
| Loans and advances to banks and loans and advances to customers – FVM | Discounted cash flow method | Risk costs | +/– 10% |
| Securities and investments from equity finance business – FVM | Discounted cash flow method<sup>1)</sup> | Cost of capital | 0.5% to 1.5%<br> (absolute fluctuation) |
|  |  | Long-term result | 5%<br> (relative fluctuation) |
|  |  | Risk costs | +/– 10% |
| Other derivatives – derivatives with positive or negative fair values, which comprise a hedging instrument for customers with respect to export and project finance – FVM | Discounted cash flow method | Expected loss | +/– 30% |

---

<sup>1)</sup> If the cost of capital and the long-term result could not be used for valuation, the sensitivities were calculated on the basis of the cost of risk.

**139** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to financial instruments</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Sensitivity analysis for the financial assets measured at fair value assigned to level 3** 

**as of 31 December 2025** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Best case<br>scenario** | **Reported value** | **Worst case<br>scenario** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Financial assets at fair value |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks – FVM | 15 | 14 | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers – FVM | 135 | 128 | 118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – FVM | 2378 | 2136 | 1915 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 2 | 2 | 2 |
|  Non-current assets held for sale | 12 | 12 | 11 |
| **Total** | **2543** | **2292** | **2060** |

---

**Sensitivity analysis for the financial liabilities measured at fair value assigned to level 3** 

**as of 31 December 2025** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Best case<br>scenario** | **Reported value** | **Worst case<br>scenario** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Financial liabilities at fair value |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities – FVD | 6 | 6 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 15 | 15 | 15 |
| **Total** | **22** | **22** | **22** |

---

**Sensitivity analysis for the financial assets measured at fair value assigned to level 3** 

**as of 31 December 2024** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Best case<br>scenario** | **Reported value** | **Worst case<br>scenario** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Financial assets at fair value |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to banks – FVM | 60 | 58 | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers – FVM | 155 | 147 | 137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – FVM | 2256 | 2334 | 2435 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 4 | 4 | 4 |
|  Non-current assets held for sale | 0 | 0 | 0 |
| **Total** | **2474** | **2542** | **2631** |

---

**Sensitivity analysis for the financial liabilities measured at fair value assigned to level 3** 

**as of 31 December 2024** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Best case<br>scenario** | **Reported value** | **Worst case<br>scenario** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Financial liabilities at fair value |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other derivatives – FVM | 18 | 18 | 18 |
| **Total** | **18** | **18** | **18** |

---

**140** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(58) Disclosures on micro fair value hedge accounting** 

**Disclosures on hedged items in micro fair value hedge accounting by risk type – 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | **Statement<br>of financial<br>position items<br>in which the<br>hedged items<br>are reported** | |
| | **Carrying**<br> **amount of**<br> **hedged items**<br> **EUR in millions** | **Accumulated<br>hedge fair value<br>adjustment<br>(fair value of the**<br> **hedged**<br> **risk for the**<br> **hedged item)**<br> **EUR in millions** | **Hedge**<br> **fair value**<br> **adjustment to**<br> **be amortised<br>(discontinued<br>hedge<br>relationships)**<br> **EUR in millions** |  | **Fair value changes<br>in hedged items to<br>determine hedge<br>ineffectiveness<br>(income statement<br>effect – hedged<br>items)**<br> **EUR in millions** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – Bonds and other fixed-income securities | 28736 | –633 | 0 | Financial assets at<br>amortised cost | 9 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – Bonds and other fixed-income securities | 0 | 0 | 0 | Financial assets at<br>amortised cost | 0 |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks/customers – promissory note loans | 7199 | –440 | 0 | Financial liabilities<br>at amortised cost | –270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities | 246205 | –8106 | 56 | Financial liabilities<br>at amortised cost | 1261 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks/customers – promissory note loans | 0 | 0 | 0 | Financial liabilities<br>at amortised cost | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities | 97921 | –10 | 286 | Financial liabilities<br>at amortised cost | –1320 |

---

**141** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Disclosures on hedged items in micro fair value hedge accounting by risk type – 2024** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | **Statement<br>of financial<br>position items<br>in which the<br>hedged items<br>are reported** | |
| | **Carrying**<br> **amount of**<br> **hedged items**<br> **EUR in millions** | **Accumulated<br>hedge fair value<br>adjustment<br>(fair value of the**<br> **hedged**<br> **risk for the**<br> **hedged item)**<br> **EUR in millions** | **Hedge**<br> **fair value**<br> **adjustment to**<br> **be amortised<br>(discontinued<br>hedge<br>relationships)**<br> **EUR in millions** |  | **Fair value changes<br>in hedged items to<br>determine hedge<br>ineffectiveness<br>(income statement<br>effect – hedged<br>items)**<br>**EUR in millions** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – Bonds and other fixed-income securities | 29301 | –642 | 0 | Financial assets at<br>amortised cost | 655 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities and investments – Bonds and other fixed-income securities | 0 | 0 | 0 | Financial assets at<br>amortised cost | 0 |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks/customers – promissory note loans | 19419 | –710 | 0 | Financial liabilities<br>at amortised cost | –605 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities | 246255 | –6842 | 90 | Financial liabilities<br>at amortised cost | –5173 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks/customers – promissory note loans | 0 | 0 | 0 | Financial liabilities<br>at amortised cost | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities | 113898 | –1329 | 221 | Financial liabilities<br>at amortised cost | –788 |

---

**142** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Disclosures on hedging instruments in micro fair value hedge accounting by risk type – 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | **Statement of<br>financial position<br>items in which the<br>hedging instruments<br>are reported** | | |
| | **Par value<br>of hedging**<br> **instruments**<br>**EUR in<br>millions** | **Carrying<br>amount<br>of hedging<br>instruments**<br>**EUR in<br>millions** |  | **Fair value changes in<br>hedging instruments to<br>determine hedge<br>ineffectiveness (income<br>statement effect –**<br> **hedging instruments)**<br>**EUR in**<br>**millions** | **Average<br>interest rate<br>of hedging<br>instruments<sup>1)</sup> %** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 108176 | 779 | Derivatives designated<br>for hedge accounting | –5 | –0.3 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 46083 | 560 | Derivatives designated<br>for hedge accounting | 0 | 2.1<sup>2)</sup> |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 181820 | 2381 | Derivatives designated<br>for hedge accounting | –1002 | –1.1 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 103584 | 5091 | Derivatives designated<br>for hedge accounting | 1348 | 1.6<sup>2)</sup> |

---

<sup>1)</sup> Average interest rate based on the coupon of the fixed leg of the derivatives weighted with nominal volume

<sup>2)</sup> Cross-currency interest rate swaps are primarily used to hedge interest risks, but also to hedge foreign currency risks. The difference between the average interest rate of the interest rate swaps and the cross-currency interest rate swaps results from the different interest rate of the hedged currencies, among other factors. 

**Disclosures on hedging instruments in micro fair value hedge accounting by risk type – 2024** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | **Statement of<br>financial position<br>items in which the<br>hedging instruments<br>are reported** | | |
| | **Par value<br>of hedging**<br> **instruments**<br>**EUR in<br>millions** | **Carrying<br>amount<br>of hedging<br>instruments**<br>**EUR in<br>millions** |  | **Fair value changes in<br>hedging instruments to<br>determine hedge<br>ineffectiveness (income<br>statement effect –**<br> **hedging instruments)**<br>**EUR in**<br>**millions** | **Average<br>interest rate<br>of hedging<br>instruments<sup>1)</sup> %** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 99353 | 656 | Derivatives designated<br>for hedge accounting | –652 | –1.2 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 105672 | 5916 | Derivatives designated<br>for hedge accounting | 0 | 1.9<sup>2)</sup> |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 202989 | 3705 | Derivatives designated<br>for hedge accounting | 5761 | –2.3 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 76683 | 1914 | Derivatives designated<br>for hedge accounting | 749 | –0.4<sup>2)</sup> |

---

<sup>1)</sup> Average interest rate based on the coupon of the fixed leg of the derivatives weighted with nominal volume

<sup>2)</sup> Cross-currency interest rate swaps are primarily used to hedge interest risks, but also to hedge foreign currency risks. The difference between the average interest rate of the interest rate swaps and the cross-currency interest rate swaps results from the different interest rate of the hedged currencies, among other factors. 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Analysis of par values of hedging instruments by hedge relationship** 

**according to remaining terms as of 31 December 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Due** | | | **Between**<br>**3 months**<br>**and 1 year** | | |
| | **In up to**<br>**1 month**<br>**EUR in millions** | **Between**<br>**1 and 3 months**<br>**EUR in millions** | **EUR in millions** | **Between 1 year**<br>**and 5 years**<br>**EUR in millions** | **In more than**<br>**5 years**<br>**EUR in millions** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 586 | 2398 | 8143 | 67165 | 29883 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 2979 | 4232 | 7095 | 27148 | 4630 |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 1457 | 861 | 11846 | 101598 | 66059 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 3330 | 2828 | 25117 | 59810 | 12498 |

---

**Analysis of par values of hedging instruments by hedge relationship** 

**according to remaining terms as of 31 December 2024** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Due** | | | **Between**<br>**3 months**<br>**and 1 year** | | |
| | **In up to**<br>**1 month**<br>**EUR in millions** | **Between**<br>**1 and 3 months**<br>**EUR in millions** | **EUR in millions** | **Between 1 year**<br>**and 5 years**<br>**EUR in millions** | **In more than**<br>**5 years**<br>**EUR in millions** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 616 | 3788 | 6915 | 49387 | 38646 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 50 | 3765 | 22542 | 63221 | 16094 |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions:<br> interest rate swap | 790 | 11516 | 29453 | 100947 | 60283 |
| **Interest-currency risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cross-currency transactions:<br> cross-currency interest rate swap | 60 | 6204 | 12251 | 47582 | 10587 |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(59) Disclosures on macro fair value hedge accounting** 

**Disclosures on hedged items in macro fair value hedge accounting by risk type – 2025** 

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | |  | | **Statement of financial position**<br>**items in which the hedged items<br>are reported** | **Statement of financial position**<br>**items in which the hedged items<br>are reported** | **Statement of financial position**<br>**items in which the hedged items<br>are reported** | **Statement of financial position**<br>**items in which the hedged items<br>are reported** | **Statement of financial position**<br>**items in which the hedged items<br>are reported** | | |  |
| | **Carrying** | **Carrying** | **Value** | **Value** |  | | **Carrying** | **Carrying** |  | **Value adjust-** | **Value adjust-** | **Fair value changes** | **Fair value changes** |  |
| | **amount of** | **amount of** | **adjustment** | **adjustment** |  | | **amount before** | **amount before** |  | **ment from** | **ment from** | **in hedged items to** | **in hedged items to** |  |
| | **hedged** | **hedged** | **from macro** | **from macro** |  | | **value adjust-** | **value adjust-** |  | **macro fair** | **macro fair** | **determine hedge** | **determine hedge** |  |
| | **items** | **items** | **fair value** | **fair value** |  | | **ment from** | **ment from** |  | **value hedge** | **value hedge** | **ineffectiveness** | **ineffectiveness** |  |
| | | | **hedge** | **hedge** |  | | **macro fair** | **macro fair** |  | **accounting** | **accounting** | **(income statement** | **(income statement** |  |
| | | | **accounting** | **accounting** |  | | **value hedge** | **value hedge** |  | | | **effect – hedged** | **effect – hedged** |  |
| | | | | |  | | **accounting** | **accounting** |  | | | **items)** | **items)** |  |
| |  |  |  |  |  |<br>**Value adjustment**<br>**from macro fair**<br>**value hedge**<br>**accounting to be**<br>**amortised**<br>**(discontinued**<br>**hedge**<br>**relationships)** |  |  |  |  |  |  |  |  |
| | **EUR in** | **EUR in** | **EUR in** | **EUR in** |  | | | |  | | | **EUR in** | **EUR in** |  |
| | **millions** | **millions** | **millions** | **millions** |  | **EUR in**<br>**millions** |  |  |  |  |  | **millions** | **millions** |  |
| <br>**Interest risk** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Assets* |  |  |  |  |  |  | | *Financial assets* | |  | *Value<br>adjustment from<br>macro fair value* |  |  |  |
|  | | *261399* | | *–10444* | | *–5* | | *at amortised cost* | | | *hedge accounting* | | *–1079* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Liabilities and equity* |  |  |  |  |  |  | | *Financial liabilities* | |  | *Value<br>adjustment from<br>macro fair value* |  |  |  |
|  | | *0* | | *–16* | | *–16* | | *at amortised cost* | | | *hedge accounting* | | *–1* | |

---

**Disclosures on hedged items in macro fair value hedge accounting by risk type – 2024** 

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | |  | | **Statement of financial position<br>items in which the hedged items<br>are reported** | **Statement of financial position<br>items in which the hedged items<br>are reported** | **Statement of financial position<br>items in which the hedged items<br>are reported** | **Statement of financial position<br>items in which the hedged items<br>are reported** | **Statement of financial position<br>items in which the hedged items<br>are reported** | | |  |
| | **Carrying** | **Carrying** | **Value** | **Value** |  | | **Carrying** | **Carrying** |  | **Value adjust-** | **Value adjust-** | **Fair value changes** | **Fair value changes** |  |
| | **amount of** | **amount of** | **adjustment** | **adjustment** |  | | **amount before** | **amount before** |  | **ment from** | **ment from** | **in hedged items to** | **in hedged items to** |  |
| | **hedged** | **hedged** | **from macro** | **from macro** |  | | **value adjust-** | **value adjust-** |  | **macro fair** | **macro fair** | **determine hedge** | **determine hedge** |  |
| | **items** | **items** | **fair value** | **fair value** |  | | **ment from** | **ment from** |  | **value hedge** | **value hedge** | **ineffectiveness** | **ineffectiveness** |  |
| | | | **hedge** | **hedge** |  | | **macro fair** | **macro fair** |  | **accounting** | **accounting** | **(income statement** | **(income statement** |  |
| | | | **accounting** | **accounting** |  | | **value hedge** | **value hedge** |  | | | **effect – hedged** | **effect – hedged** |  |
| | | | | |  | | **accounting** | **accounting** |  | | | **items)** | **items)** |  |
| |  |  |  |  |  |<br> **Value adjustment**<br>**from macro fair**<br>**value hedge**<br>**accounting to be**<br>**amortised**<br>**(discontinued**<br>**hedge**<br>**relationships)** |  |  |  |  |  |  |  |  |
| | **EUR in** | **EUR in** | **EUR in** | **EUR in** |  | | | |  | | | **EUR in** | **EUR in** |  |
| | **millions** | **millions** | **millions** | **millions** |  | **EUR in**<br>**millions** |  |  |  |  |  | **millions** | **millions** |  |
| <br>**Interest risk** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Assets* |  |  |  |  |  |  | | *Financial assets* | |  | *Value<br>adjustment from<br>macro fair value* |  |  |  |
|  | | *265340* | | *–9375* | | *4* | | *at amortised cost* | | | *hedge accounting* | | *5431* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Liabilities and equity* |  |  |  |  |  |  | | *Financial liabilities* | |  | *Value<br>adjustment from<br>macro fair value* |  |  |  |
|  | | *0* | | *–16* | | *–16* | | *at amortised cost* | | | *hedge accounting* | | *15* | |

---

**145** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to financial instruments</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Disclosures on hedging instruments in macro fair value hedge accounting by risk type – 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **Statement of** | |
| | | | **financial** | |
| | | | **position items** | |
| | | | **in which the** | |
| | | | **hedging** | |
| | | | **instruments are** | |
| | | | **reported** | |
| | **Par value of**<br>**hedging**<br>**instruments**<br><br><br>**EUR in millions** | **Carrying**<br>**amount of**<br>**hedging**<br>**instruments**<br><br>**EUR in millions** |  | **Fair value changes in**<br>**hedging instruments**<br>**to determine hedge**<br>**ineffectiveness**<br>**(income statement**<br>**effect – hedging**<br>**instruments)**<br>**EUR in millions** |
| <br>**Assets** |  |  |  |  |
| **Interest risk** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  | Derivatives |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap |  |  | designated for |  |
|  | 184386 | 692 | hedge accounting | –146 |
| **Liabilities and equity** |  |  |  |  |
| **Interest risk** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  | Derivatives |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap |  |  | designated for |  |
|  | 62220 | 714 | hedge accounting | 1076 |

---

**Disclosures on hedging instruments in macro fair value hedge accounting by risk type – 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **Statement of** | |
| | | | **financial** | |
| | | | **position items** | |
| | | | **in which the** | |
| | | | **hedging** | |
| | | | **instruments are** | |
| | | | **reported** | |
| | **Par value of**<br>**hedging**<br>**instruments**<br><br><br>**EUR in millions** | **Carrying**<br>**amount of**<br>**hedging**<br>**instruments**<br><br>**EUR in millions** |  | **Fair value changes in**<br>**hedging instruments**<br>**to determine hedge**<br>**ineffectiveness**<br>**(income statement**<br>**effect – hedging**<br>**instruments)**<br>**EUR in millions** |
| <br>**Assets** |  |  |  |  |
| **Interest risk** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  | Derivatives |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap |  |  | designated for |  |
|  | 180701 | 873 | hedge accounting | –4610 |
| **Liabilities and equity** |  |  |  |  |
| **Interest risk** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  | Derivatives |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap |  |  | designated for |  |
|  | 69494 | 1362 | hedge accounting | –677 |

---

**146** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to financial instruments</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Analysis of par values of hedging instruments by remaining terms as of 31 December 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Due** | | | **Between**<br>**3 months**<br>**and 1 year** | **Between**<br>**1 year and**<br>**5 years** | |
| | **In up to**<br>**1 month**<br>**EUR in millions** | **Between**<br>**1 and 3 months**<br>**EUR in millions** | **EUR in millions** | **EUR in millions** | **In more than**<br>**5 years**<br>**EUR in millions** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap | 1151 | 1593 | 21473 | 79947 | 80223 |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap | 493 | 1486 | 6843 | 26509 | 26890 |

---

**Analysis of par values of hedging instruments by remaining terms as of 31 December 2024** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Due** | | | **Between**<br>**3 months**<br>**and 1 year** | **Between**<br>**1 year and**<br>**5 years** | |
| | **In up to**<br>**1 month**<br>**EUR in millions** | **Between**<br>**1 and 3 months**<br>**EUR in millions** | **EUR in millions** | **EUR in millions** | **In more than**<br>**5 years**<br>**EUR in millions** |
| <br>**Assets** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap | 1296 | 1796 | 23358 | 82880 | 71371 |
| **Liabilities and equity** |  |  |  |  |  |
| **Interest risk** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-related transactions: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; interest rate swap | 325 | 1057 | 6100 | 22090 | 39922 |

---

**147** 

KfW Financial Report 2025

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to financial instruments</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(60) Additional disclosures on derivatives** 

**Analysis of derivatives by type of hedge** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Notional amount** | **Notional amount** | <br>**Fair value**<br>**31 Dec. 2025** | <br>**Fair value**<br>**31 Dec. 2025** | **Fair value 31 Dec. 2024** | **Fair value 31 Dec. 2024** |
|  | **31 Dec. 2025** | **31 Dec. 2024** | **positive** | **negative** | **positive** | **negative** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Interest-related derivatives | 644511 | 675658 | 2535 | 4631 | 2807 | 6559 |
| Cross-currency derivatives | 150768 | 150258 | 1161 | 5937 | 6854 | 2710 |
| Credit derivatives | 0 | 0 | 0 | 0 | 0 | 0 |
| **Total** | **795278** | **825916** | **3696** | **10568** | **9661** | **9269** |

---

Cross-currency swaps are presented under Cross-currency derivatives.

**Analysis of derivatives by counterparty** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Notional amount** | **Notional amount** | <br>**Fair value**<br>**31 Dec. 2025** | <br>**Fair value**<br>**31 Dec. 2025** | **Fair value**<br>**31 Dec. 2024** | **Fair value**<br>**31 Dec. 2024** |
|  | **31 Dec. 2025** | **31 Dec. 2024** | **positive** | **negative** | **positive** | **negative** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| OECD banks | 774875 | 775691 | 3550 | 9512 | 8692 | 7303 |
| Non-OECD banks | 146 | 176 | 1 | 5 | 5 | 5 |
| Other counterparties | 20083 | 49890 | 145 | 1027 | 963 | 1945 |
| Public sector | 174 | 159 | 0 | 24 | 1 | 17 |
| **Total** | **795278** | **825916** | **3696** | **10568** | **9661** | **9269** |

---

The analysis includes financial and credit derivatives which are presented in derivatives designated for hedge accounting and the sub-item other derivatives under Financial assets at fair value or Financial liabilities at fair value. Embedded derivatives that must be bifurcated are not included.

The economic hedge effect of financial derivatives with an aggregate principal amount of EUR 698.0 billion (31 Dec. 2024: EUR 747.4 billion) is reflected in the accounts; it was not possible to reflect the risk-mitigating impact of the remaining financial derivatives in the accounts (hedge accounting).

Unchanged from 31 December 2024, KfW Group did not pledge any collateral (in the form of securities) under derivative transactions that can be resold or repledged at any time without payments being past due.

However, liquid collateral totalling EUR 6,633 million (31 Dec. 2024: EUR 2,469 million) was provided, which is recognised under Financial assets at amortised cost – Loans and advances to banks or customers.

Unchanged from 31 December 2024, KfW Group did not receive any collateral (in the form of securities) under derivative transactions that can be resold or repledged at any time without payments by the protection seller being past due.

However, liquid collateral totalling EUR 249 million (31 Dec. 2024: EUR 3,339 million) was accepted, which was reported under Financial liabilities at amortised cost – Liabilities to banks or Liabilities to customers.

**148** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to financial instruments</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The volume of initial differences between the transaction price and model value arising from the use of a valuation technique that makes significant use of unobservable data which have yet to be amortised over the life of the financial instrument developed as follows during the reporting period:

**Day one profit or loss** 

---

| | | |
|:---|:---|:---|
|  | <br>**2025** | **2024** |
|  | **EUR in millions** | **EUR in millions** |
| **As of 1 Jan.** | –108 | –112 |
| Addition | –23 | –9 |
| Reversal | 17 | 15 |
| Exchange rate changes | 6 | –2 |
| **As of 31 Dec.** | **–108** | **–108** |

---

Net gains/losses from financial derivatives not qualifying for hedge accounting include amortisation effects in the amount of EUR 11 million (2024: EUR 11 million).

**(61) Additional disclosures on financial liabilities at fair value** 

**Disclosures on financial liabilities at fair value as of 31 December 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Financial liabilities at fair value** | <br>**Financial liabilities at fair value** | <br>**Financial liabilities at fair value** | |
|  | **Liabilities**<br>**to banks** | **Liabilities**<br>**to customers** | **Certificated**<br>**liabilities** | |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | <br>**Total**<br>**EUR in millions** |
| Carrying amount | 268 | 590 | 6062 | 6921 |
| Repayment amount at maturity | 285 | 821 | 8078 | 9184 |
| **Difference** | **17** | **230** | **2015** | **2263** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; thereof borrowings for which the repayment amount builds up as a result of the capitalisation over time of interest due | 1 | 228 | 2172 | 2401 |

---

**Disclosures on financial liabilities at fair value as of 31 December 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Financial liabilities at fair value** | <br>**Financial liabilities at fair value** | <br>**Financial liabilities at fair value** | |
|  | **Liabilities**<br>**to banks** | **Liabilities**<br>**to customers** | **Certificated**<br>**liabilities** | |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | <br>**Total**<br>**EUR in millions** |
| Carrying amount | 225 | 719 | 6537 | 7481 |
| Repayment amount at maturity | 245 | 994 | 9120 | 10359 |
| **Difference** | **20** | **275** | **2583** | **2879** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; thereof borrowings for which the repayment amount builds up as a result of the capitalisation over time of interest due | 0 | 273 | 2739 | 3012 |

---

**149** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Notes to financial instruments</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(62) Contractual payment obligations arising from financial instruments** 

**Analysis of payment obligations by maturity range as of 31 December 2025<sup>1)</sup>** 

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Up to** | **Up to** | **More than** | **More than** | **More than** | **More than** | **More than** | **More than** | **More than** | **More than** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Total** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Total** |  |
| | **1 month** | **1 month** | **1 and up to** | **1 and up to** | **3 months** | **3 months** | **1 and up to** | **1 and up to** | **5 years** | **5 years** | | |  |
| | | | **3 months** | **3 months** | **and up to** | **and up to** | **5 years** | **5 years** | | | | |  |
| |  |  |  |  | **1 year** | **1 year** |  |  |  |  |  |  |  |
| | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** |  |
| <br>**Financial liabilities at amortised cost** |  |  |  |  |  |  |  |  |  |  | | |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks |  | 844 |  | 6 |  | 850 |  | 644 |  | 454 |  | 2798 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers |  | 3664 |  | 1131 |  | 5848 |  | 9130 |  | 3722 |  | 23496 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities |  | 19799 |  | 44823 |  | 63790 |  | 250677 |  | 116313 |  | 495402 |  |
| **Financial liabilities at fair value** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks |  | 0 |  | 0 |  | 41 |  | 249 |  | 0 |  | 290 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers |  | 0 |  | 1 |  | 1 |  | 280 |  | 575 |  | 857 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities |  | 12 |  | 8 |  | 313 |  | 3499 |  | 5570 |  | 9402 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net obligations arising from derivative financial instruments |  | –42 |  | –179 |  | 570 |  | 1138 |  | 1183 |  | 2670 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof gross obligations arising from derivative financial instruments* | | *21008* | | *32431* | | *33263* | | *81979* | | *24418* | | *193099* | |
| **Obligations arising from on-balance sheet financial instruments** |  | **24279** |  | **45791** |  | **71412** |  | **265616** |  | **127817** |  | **534915** |  |
|  **Obligations arising from off-balance sheet transactions** |  | **143189** |  | **0** |  | **0** |  | **0** |  | **0** |  | **143189** |  |
| **Total** |  | **167468** |  | **45791** |  | **71412** |  | **265616** |  | **127817** |  | **678104** |  |

---

<sup>1)</sup> Net obligations arising from derivative financial instruments comprise payment obligations which are offset against the corresponding payment claims from derivative contracts; gross obligations are reported as obligations arising from derivative financial instruments. Off-balance sheet transactions are generally allocated to the first maturity range. 

**Analysis of payment obligations by maturity range as of 31 December 2024<sup>1)</sup>** 

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Up to** | **Up to** | **More than** | **More than** | **More than** | **More than** | **More than** | **More than** | **More than** | **More than** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Total** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **Total** |  |
| | **1 month** | **1 month** | **1 and up to** | **1 and up to** | **3 months** | **3 months** | **1 and up to** | **1 and up to** | **5 years** | **5 years** | | |  |
| | | | **3 months** | **3 months** | **and up to** | **and up to** | **5 years** | **5 years** | | | | |  |
| |  |  |  |  | **1 year** | **1 year** |  |  |  |  |  |  |  |
| | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** | **EUR in<br> millions** |  |
| <br>**Financial liabilities at amortised cost** |  |  |  |  |  |  |  |  |  |  | | |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks |  | 4397 |  | 19 |  | 1055 |  | 896 |  | 312 |  | 6679 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers |  | 4255 |  | 2524 |  | 12008 |  | 6366 |  | 6630 |  | 31782 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities |  | 25854 |  | 29860 |  | 59643 |  | 249993 |  | 124296 |  | 489646 |  |
| **Financial liabilities at fair value** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to banks |  | 0 |  | 0 |  | 1 |  | 250 |  | 0 |  | 251 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers |  | 0 |  | 1 |  | 3 |  | 327 |  | 733 |  | 1064 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificated liabilities |  | 16 |  | 40 |  | 214 |  | 3789 |  | 6805 |  | 10865 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net obligations arising from derivative financial instruments |  | –216 |  | –25 |  | –945 |  | –3464 |  | 1257 |  | –3392 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof gross obligations arising from derivative financial instruments* | | *16995* | | *16073* | | *32268* | | *97221* | | *32759* | | *195316* | |
| **Obligations arising from on-balance sheet financial instruments** |  | **34306** |  | **32419** |  | **71980** |  | **258156** |  | **140033** |  | **536894** |  |
| **Obligations arising from off-balance sheet transactions** |  | **145116** |  | **0** |  | **0** |  | **0** |  | **0** |  | **145116** |  |
| **Total** |  | **179422** |  | **32419** |  | **71980** |  | **258156** |  | **140033** |  | **682010** |  |

---

<sup>1)</sup> Net obligations arising from derivative financial instruments comprise payment obligations which are offset against the corresponding payment claims from derivative contracts; gross obligations are reported as obligations arising from derivative financial instruments. Off-balance sheet transactions are generally allocated to the first maturity range. 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The maturity analysis of lease liabilities as lessee is reported under Other notes (in the "Leasing transactions as lessee" section).

**(63) Disclosures on repurchase agreements** 

**Disclosures on repo transactions** 

---

| | | |
|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Carrying amount of securities sold under repo transactions that continue to be recognised in Financial assets at amortised cost – Securities and investments | 98 | 313 |
| Financial liabilities at amortised cost – Liabilities to banks (countervalue) | 98 | 311 |

---

The fair value of interest-bearing securities sold under repo transactions that continue to be recognised in Financial assets at amortised cost totalled EUR 98 million (31 Dec. 2024: EUR 311 million). The fair value of the corresponding repayment obligations was EUR 98 million (31 Dec. 2024: EUR 311 million).

Moreover, as in 2024, KfW Group did not pledge any collateral (in the form of securities) under repo transactions that can be resold or repledged at any time without payments being past due.

As in 2024, the group did not receive any collateral (in the form of securities) under repo transactions that can be resold or repledged at any time without payments being past due.

As in 2024, the group neither pledged nor accepted any liquid collateral.

**Disclosures on reverse repo transactions** 

---

| | | |
|:---|:---|:---|
|  | <br>**31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Financial assets at amortised cost – Loans and advances to banks (countervalue) | 23282 | 9630 |
| Financial assets at amortised cost – Loans and advances to customers (countervalue) | 0 | 0 |
| **Total** | **23282** | **9630** |

---

The fair value of interest-bearing securities purchased under reverse repos that are not recognised amounted to EUR 23,229 million (31 Dec. 2024: EUR 9,600 million).

Moreover, KfW Group did not receive any collateral (in the form of securities) under reverse repo transactions that can be resold or repledged at any time without payments by the protection seller being past due, unchanged from 31 December 2024.

As in 2024, the group did not pledge any collateral (in the form of securities) under reverse repo transactions that can be resold or repledged at any time without payments being past due.

As in 2024, the group neither pledged nor accepted any liquid collateral.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(64) Disclosures on offsetting financial instruments** 

**Disclosures on financial assets with netting agreements as of 31 December 2025** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Carrying amount**<br>**of financial**<br>**assets before**<br>**offsetting**<br>**(gross amount)** | **Netted figure as**<br>**carrying amount**<br>**of financial**<br>**liabilities**<br>**(gross amount)** | | **Carrying**<br>**amount of**<br>**non-offsettable**<br>**financial**<br>**liabilities** | | |
|  | **EUR in millions** | **EUR in millions** | **Reported**<br>**financial**<br>**assets**<br>**(net amount)**<br>**EUR in millions** | **EUR in millions** | **Fair value**<br>**of collateral**<br>**received**<br><br>**EUR in millions** | **Total net**<br>**amount**<br><br>**EUR in millions** |
| OTC derivatives | 17791 | 14.140<sup>1)</sup> | 3652 | 3384 | 234 | 33 |
| Reverse repos | 23282 | 0 | 23282 | 78 | 23203 | 0 |
| **Total** | **41073** | **14140** | **26933** | **3462** | **23438** | **33** |

---

<sup>1)</sup> Thereof obligations from cash collateral for OTC derivatives with EUREX as the central counterparty in the amount of EUR 3,971 million. 

**Disclosures on financial liabilities with netting agreements as of 31 December 2025** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Carrying amount**<br>**of financial**<br>**liabilities before**<br>**offsetting**<br>**(gross amount)** | **Netted figure as**<br>**carrying amount**<br>**of financial**<br>**assets**<br>**(gross amount)** | | | | |
|  | **EUR in millions** | **EUR in millions** | **Reported**<br>**financial**<br>**liabilities**<br>**(net amount)**<br>**EUR in millions** | **Carrying**<br>**amount of**<br>**non-offsettable**<br>**financial assets**<br>**EUR in millions** | **Fair value**<br>**of collateral**<br>**pledged**<br><br>**EUR in millions** | **Total net**<br>**amount**<br><br>**EUR in millions** |
| OTC derivatives | 19996 | 10168 | 9827 | 3384 | 6394 | 50 |
| Repos | 98 | 0 | 98 | 78 | 19 | 0 |
| **Total** | **20093** | **10168** | **9925** | **3462** | **6413** | **50** |

---

The disclosures on financial instruments with netting agreements only include gross and net amounts for financial assets and financial liabilities with netting agreements. The Notes on the two classes Derivatives designated for hedge accounting and Other derivatives also include financial assets with a carrying amount of EUR 194 million (31 Dec. 2024: EUR 192 million) and financial liabilities with a carrying amount of EUR 742 million (31 Dec. 2024: EUR 848 million), in particular from bifurcated embedded derivatives and derivatives not subject to netting agreements.

Receivables from reverse repo transactions are reported under Financial assets at amortised cost – Loans and advances to banks and Loans and advances to customers.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Disclosures on financial assets with netting agreements as of 31 December 2024** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Carrying amount**<br>**of financial**<br>**assets before**<br>**offsetting**<br>**(gross amount)** | **Netted figure as**<br>**carrying amount**<br>**of financial**<br>**liabilities**<br>**(gross amount)** | | **Carrying**<br>**amount of**<br>**non-offsettable**<br>**financial**<br>**liabilities** | | |
|  | **EUR in millions** | **EUR in millions** | **Reported**<br>**financial**<br>**assets**<br>**(net amount)**<br>**EUR in millions** | **EUR in millions** | **Fair value**<br>**of collateral**<br>**received**<br><br>**EUR in millions** | **Total net**<br>**amount**<br><br>**EUR in millions** |
| OTC derivatives | 25636 | 16080<sup>1)</sup> | 9556 | 6066 | 3318 | 172 |
| Reverse repos | 9630 | 0 | 9630 | 272 | 9358 | 0 |
| **Total** | **35266** | **16080** | **19186** | **6338** | **12676** | **172** |

---

<sup>1)</sup> Thereof obligations from cash collateral for OTC derivatives with EUREX as the central counterparty in the amount of EUR 4,425 million 

**Disclosures on financial liabilities with netting agreements as of 31 December 2024** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Carrying amount**<br>**of financial**<br>**liabilities before**<br>**offsetting**<br>**(gross amount)** | **Netted figure as**<br>**carrying amount**<br>**of financial**<br>**assets**<br>**(gross amount)** | | | | |
|  | **EUR in millions** | **EUR in millions** | **Reported**<br>**financial**<br>**liabilities**<br>**(net amount)**<br>**EUR in millions** | **Carrying**<br>**amount of**<br>**non offsettable**<br>**financial assets**<br>**EUR in millions** | **Fair value**<br>**of collateral**<br>**pledged**<br><br>**EUR in millions** | **Total net**<br>**amount**<br><br>**EUR in millions** |
| OTC derivatives | 20083 | 11655 | 8427 | 6066 | 2299 | 62 |
| Repos | 311 | 0 | 311 | 272 | 40 | 0 |
| **Total** | **20394** | **11655** | **8739** | **6338** | **2339** | **62** |

---

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Other notes</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Other notes
**(65) Off-balance sheet transactions** 

**Analysis by class** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Irrevocable loan commitments | 137023 | 138628 |
| Financial guarantee contracts | 906 | 1101 |
| Contingent liabilities from financial guarantees | 2370 | 2362 |
| Other contingent liabilities | 2812 | 2951 |
| **Total** | **143111** | **145041** |

---

All off-balance-sheet transactions are disclosed in the Notes at their par values less any related provisions.

Other contingent liabilities include payment obligations attributable to equity investments which are not fully paid up and do not have to be consolidated.

As part of the sale of its stake in Deutsche Industriebank ("IKB") in 2008, KfW agreed to indemnify IKB for certain legal risks up to a certain amount after IKB's excess. As of the end of the reporting period, no proceedings are pending against IKB which are relevant in this context.

In accordance with IAS 37.92, no further disclosures on contingent liabilities were made.

**(66) Trust activities and administered loans** 

**Analysis of trust activities (transactions in KfW's own name but for the account of third parties)** 

---

| | | |
|:---|:---|:---|
|  | <br> **31 Dec. 2025** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** |
| Loans and advances to banks | 852 | 785 |
| Loans and advances to customers | 10035 | 10502 |
| Securities and investments | 11688 | 11565 |
| **Assets held in trust** | **22575** | **22853** |
| Liabilities to banks | 0 | 0 |
| Liabilities to customers | 22575 | 22853 |
| **Liabilities held in trust** | **22575** | **22853** |

---

EUR 13,144 million (31 Dec. 2024: EUR 13,381 million) of the assets held in trust is attributable to KfW Development Bank and DEG. Additional transactions with the Federal Government as trustor in the amount of EUR 7,877 million (31 Dec. 2024: EUR 5,787 million) are transactions mandated by the German Federal Government in accordance with Article 2 (4) of the KfW Law and are included in Securities and investments.

Moreover, KfW held guarantees of EUR 295 million (31 Dec. 2024: EUR 145 million) issued under the European Fund for Sustainable Development (EFSD), in trust for the European Union.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Volume of administered loans granted (loans in the name and for the account of third parties)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Administered loans |  | 25670 |  | 22879 |

---

**(67) Leasing transactions as lessee** 

**Disclosures on lessee agreements as of 31 December 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Due within**<br>**1 year** | **Due in between**<br>**1 and 5 years** | **Due in more than**<br>**5 years** | |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **Total**<br> **EUR in millions** |
| Lease liabilities (undiscounted) | 8 | 24 | 7 | 40 |

---

**Disclosures on lessee agreements as of 31 December 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Due within**<br>**1 year** | **Due in between**<br>**1 and 5 years** | **Due in more than**<br>**5 years** | |
|  | **EUR in millions** | **EUR in millions** | **EUR in millions** | **Total**<br> **EUR in millions** |
| Lease liabilities (undiscounted) | 8 | 21 | 1 | 30 |

---

Lease payments in the amount of EUR 1 million (2024: EUR 1 million) were incurred for short-term leases in the reporting period. For leases in which the underlying asset is of low value, lease payments amounted to EUR 4 million (2024: EUR 4 million). The group does not apply recognition requirements in either case as provided for in IFRS 16.5.

**(68) Average number of employees during the financial year** 

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2024** |
| Female employees | 4140 | 4084 |
| Male employees | 4559 | 4409 |
| Gender not indicated | 0 | 0 |
| **Total<sup>1),</sup> <sup>2)</sup>** | **8699** | **8493** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Staff not covered by collective agreements* | *5817* | *5679* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Staff covered by collective agreements* | *2431* | *2382* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Staff in external offices* | *451* | *433* |

---

<sup>1)</sup> Excluding interns and employees on parental leave

<sup>2)</sup> Due to immateriality, the prior-year figure for employees on parental leave has not been adjusted.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(69) Remuneration report** 

The remuneration report describes the basic structure of the remuneration plan for members of the Executive Board and Board of Supervisory Directors; it also discloses their remuneration on an individual basis. The remuneration report is an integral part of the notes to the consolidated financial statements.

**Overview of total remuneration of members of the Executive Board and Board of Supervisory Directors** 

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2025<sup>1)</sup>** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2024** |
| | **EUR in thousands** | **EUR in thousands** |
| Members of the Executive Board | 4012.3 | 3972.0 |
|  Former members of the Executive Board and their surviving dependants | 4666.4 | 4575.3 |
|  Members of the Board of Supervisory Directors | 178.3 | 188.6 |
|  **Total** | **8857.0** | **8735.9** |

---

<sup>1)</sup> Katharina Herrmann stepped down from the Executive Board of KfW as of 30 April 2025.

**Remuneration of the Executive Board** 

The remuneration system for KfW's Executive Board is aimed at appropriately compensating members of the Executive Board for their duties and responsibilities. Executive Board contracts are drawn up based on the 1992 version of the policy for hiring executive board members at credit institutions of the Federal Government *(Grundsätze für die Anstellung der Vorstandsmitglieder bei den Kreditinstituten des Bundes)*. The Federal Public Corporate Governance Code *(Public Corporate Governance Kodex des Bundes – "PCGK")* is taken into account when drawing up contracts. Each contract is individualised accordingly on this basis.

**Components of remuneration** 

The Executive Board members receive fixed monetary remuneration paid in equal monthly instalments.

The following table shows total remuneration, broken down into remuneration components and other forms of remuneration, as well as additions to pension provisions for each member of the Executive Board.

**Annual remuneration of the Executive Board and additions to pension provisions in financial years 2025 and 2024** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Salary** | **Salary** | **Other remuneration**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | **Other remuneration**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | **Total** | **Total** | **Additions to**<br> **pension provisions<sup>1)</sup>** | **Additions to**<br> **pension provisions<sup>1)</sup>** |
|  | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
|  | **EUR in<br>thousands** | **EUR in<br>thousands** | **EUR in<br>thousands** | **EUR in<br>thousands** | **EUR in<br>thousands** | **EUR in<br>thousands** | **EUR in<br>thousands** | **EUR in<br>thousands** |
|  Stefan Wintels<br> (Chief Executive Officer) | 910.7 | 838.7 | 21.5 | 18.7 | 932.2 | 857.4 | 617.4 | 693.3 |
|  Katharina Herrmann<sup>2)</sup>  | 189.5 | 568.4 | 1.9 | 5.1 | 191.4 | 573.5 | 0.0 | 367.1 |
|  Melanie Kehr | 751.6 | 603.4 | 16.1 | 15.0 | 767.7 | 618.4 | 83.7 | 563.1 |
|  Christiane Laibach | 626.7 | 568.4 | 13.1 | 12.3 | 639.8 | 580.7 | 452.9 | 300.3 |
|  Bernd Loewen | 740.8 | 682.4 | 40.1 | 34.4 | 780.9 | 716.8 | 214.5 | 1894.4 |
|  Dr Stefan Peiß | 677.4 | 603.4 | 22.9 | 21.8 | 700.3 | 625.2 | –14.7 | 362.9 |
| **Total** | **3896.7** | **3864.7** | **115.6** | **107.3** | **4012.3** | **3972.0** | **1353.8** | **4181.1** |

---

<sup>1)</sup> The discount rate for pension obligations increased in 2025 due to the rise in long-term capital market rates, from 3.49% (31 Dec. 2024) to 4.08% (31 Dec. 2025). 

<sup>2)</sup> Until 30 April 2025

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Breakdown of other remuneration of the Executive Board in financial year 2025** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Company<br>car** | **Group<br>accident<br>insurance** | **Health<br>insurance** | **Long-term<br>care<br>insurance** | **Cost of<br>maintaining a<br>second home** | **Other** | **Total** |
|  | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** |
| Stefan Wintels<br> (Chief Executive Officer) | 13.9 | 0.6 | 5.8 | 1.2 | 0.0 | 0.0 | 21.5 |
| Katharina Herrmann<sup>1)</sup>  | 0.0 | 0.0 | 1.7 | 0.2 | 0.0 | 0.0 | 1.9 |
| Melanie Kehr | 9.5 | 0.5 | 5.6 | 0.5 | 0.0 | 0.0 | 16.1 |
| Christiane Laibach | 6.7 | 0.4 | 5.4 | 0.6 | 0.0 | 0.0 | 13.1 |
| Bernd Loewen | 15.9 | 0.5 | 22.5 | 1.2 | 0.0 | 0.0 | 40.1 |
| Dr Stefan Peiß | 13.1 | 0.4 | 8.2 | 1.2 | 0.0 | 0.0 | 22.9 |
| **Total** | **59.1** | **2.4** | **49.2** | **4.9** | **0.0** | **0.0** | **115.6** |

---

<sup>1)</sup> Until 30 April 2025

**Breakdown of other remuneration of the Executive Board in financial year 2024** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Company<br>car** | **Group<br>accident<br>insurance** | **Health<br>insurance** | **Long-term<br>care<br>insurance** | **Cost of<br>maintaining a<br>second home** | **Other** | **Total** |
|  | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** |
| Stefan Wintels<br> (Chief Executive Officer) | 12.0 | 0.6 | 5.1 | 1.1 | 0.0 | 0.0 | 18.7 |
| Katharina Herrmann | 0.0 | 0.4 | 4.1 | 0.5 | 0.0 | 0.0 | 5.1 |
| Melanie Kehr | 9.2 | 0.4 | 4.9 | 0.5 | 0.0 | 0.0 | 15.0 |
| Christiane Laibach | 6.5 | 0.4 | 4.8 | 0.6 | 0.0 | 0.0 | 12.3 |
| Bernd Loewen | 15.6 | 0.5 | 17.2 | 1.1 | 0.0 | 0.0 | 34.4 |
| Dr Stefan Peiß | 13.0 | 0.4 | 7.3 | 1.1 | 0.0 | 0.0 | 21.8 |
| **Total** | **56.3** | **2.7** | **43.4** | **4.9** | **0.0** | **0.0** | **107.3** |

---

**Breakdown of remuneration of the Executive Board from secondary employment in financial years 2025 and 2024** 

---

| | | |
|:---|:---|:---|
|  | <br> **2025** | **2024** |
|  | **EUR in thousands** | **EUR in thousands** |
| Stefan Wintels (Chief Executive Officer)<sup>1)</sup>  | 331.7 | 328.6 |
| Katharina Herrmann<sup>2)</sup>  | 0.0 | 0.0 |
| Melanie Kehr | 39.5 | 38.9 |
| Christiane Laibach | 0.0 | 0.0 |
| Bernd Loewen | 0.0 | 0.0 |
| Dr Stefan Peiß | 0.0 | 0.0 |

---

<sup>1)</sup> Remuneration payments for 2024 were made in 2025.

<sup>2)</sup> Until 30 April 2025

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Responsibilities** 

The Presidial and Nomination Committee has discussed the Executive Board remuneration system including contract components since the committee structure was modified in accordance with the applicable Section 25d of the German Banking Act *(Kreditwesengesetz – "KWG")* and adopts and regularly reviews it. The Presidial and Nomination Committee is advised on these matters by the Remuneration Committee, which in turn works together with the Risk and Credit Committee in order to perform its duties. Likewise after consulting with the Remuneration Committee on the matter, the Board of Supervisory Directors decides upon the basic structure of the Executive Board's remuneration system.

The Presidial and Nomination Committee most recently discussed remuneration issues on 2 April 2025.

**Fringe benefits** 

Other remuneration largely consists of contractual fringe benefits. Executive Board members are entitled to a company car with driver services for business and personal use. Executive Board members reimburse KfW for using a company car with a driver for private purposes in accordance with applicable tax regulations. They are reimbursed under tax regulations for the cost of maintaining a second home for business reasons.

Executive Board members are insured under a group accident insurance policy. Allowances are provided for health and long-term care insurance. Executive Board members are covered by a directors' and officers' liability insurance policy, which insures them against the risks of financial loss associated with their actions in their capacity as Executive Board members and by a supplemental legal expenses insurance policy and a contractual protection insurance policy. KfW Executive Board members acting in their management capacity are also protected by a special legal expenses group policy for employees covering criminal activities.

No remuneration is paid to members of the Executive Board for assuming executive body functions at group companies.

As with all other executives, Executive Board members may also opt to participate in the deferred remuneration programme – a supplemental company pension scheme financed via tax-free salary conversion. Moreover, they are entitled to anniversary bonuses in accordance with KfW's general company policy.

In addition, the fringe benefits include the cost of security systems at Executive Board members' homes; these benefits are not recognised as Other remuneration but as Non-personnel expenses.

The contractual fringe benefits are subject to taxation as benefits in money's worth for Executive Board members if they cannot be granted on a tax-free basis or if this is contractually agreed. No Executive Board member was granted or promised any benefits by a third party during the past financial year with a view to his/her position as a member of the KfW Executive Board.

**Pension benefits and other benefits in the case of early retirement** 

In accordance with Article 1 (3) of the KfW Bylaws, the appointment of an Executive Board member should not generally extend past the legal age of retirement. Upon reaching statutory retirement age and the expiry of their Executive Board contract, Executive Board members are entitled to claim pension payments; they are also entitled to pension benefits if their employment relationship terminates due to permanent disability.

Pension commitments for Executive Board members as well as their surviving dependants are based on the 1992 version of the Federal Government's policy for hiring executive board members at credit institutions. The PCGK is taken into account when drawing up the Executive Board contracts.

Executive Board member contracts include a severance pay cap in accordance with the recommendations of the PCGK. In other words, payments to these Executive Board member due to early termination of the Executive Board function without good cause in accordance with Section 626 of the German Civil Code *(Bürgerliches Gesetzbuch – "BGB")* should not exceed the equivalent of two years' salary or compensation including fringe benefits for the remainder of the contract, depending on which of the amounts is lower.

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Other notes</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The full benefit entitlement totalled 49% of the final salary in the reporting year with different contractual arrangements. The retirement benefit entitlement amounted to 70% of the full entitlement for first-time appointment, with an increase per completed year of service of 0.98 to 1.53 percentage points depending on the contract (from an initial 34.3% to a maximum of 49% of the final salary).

The Executive Board contracts contain additional individual provisions, in particular concerning vesting of pension benefits. The newer contracts also include provisions on retrospective pension contributions where pension benefits are not yet vested and the member in question has not been reappointed, and on discounts in the event of early retirement.

Pension payments and other benefits to former Executive Board members or their surviving dependants were as follows in 2025 and 2024:

**Pension payments and other benefits to former Executive Board members or their surviving dependants** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2024** | **2024** |
|  | **Headcount** | **EUR in thousands** | **Headcount** | **EUR in thousands** |
| Former members of the Executive Board | 16 | 4.193.0 | 17 | 4035.3 |
| Surviving dependants | 4 | 473.4 | 4 | 540.0 |
| **Total** | **20** | **4666.4** | **21** | **4575.3** |

---

Provisions for pension obligations to former members of the Executive Board and their surviving dependants in the amount of EUR 52,091 thousand (31 Dec. 2024: EUR 51,462 thousand) were set up at the end of financial year 2025.

**Remuneration of members of the Board of Supervisory Directors** 

The amount of remuneration to members of the Board of Supervisory Directors is determined by the supervisory authority in accordance with Article 7 (10) of the KfW Bylaws. With the last revision in May 2010, compensation to members of the Federal Government who are members of the Board of Supervisory Directors pursuant to Article 7 (1) nos. 1 and 2 of the KfW Law was set at EUR 0.

In the reporting year, remuneration for other members of the Board of Supervisory Directors pursuant to Article 7 (1) nos. 3–7 of the KfW Law amounted to EUR 5,113 p.a.; remuneration for membership of a Board of Supervisory Directors committee was a standard amount of EUR 614 p.a. for each member. Committee chairs did not receive special remuneration.

Members who join during the year receive their remuneration on a pro rata basis.

A daily allowance (EUR 200 per meeting day) is paid and travel expenses and applicable VAT are reimbursed upon request.

The following table provides details on the remuneration paid to the Board of Supervisory Directors in financial year 2025; stated amounts are net amounts in thousands of euros. Travel expenses are reimbursed upon submission of receipts and are not taken into account in the table.

**159** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Remuneration of members of the Board of Supervisory Directors for financial year 2025** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br> **No.** | <br> **Name** | <br> **Dates of<br>membership** | <br> **Board of<br>Supervisory<br>Directors<br> membership<sup>1)</sup>** | <br> **Committee<br>membership<sup>1)</sup>** | <br> **Daily<br>allowance<sup>3)</sup>** | <br> **Total** |
|  |  | **2025** | **EUR in<br>thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** |
| 1. | Dr Jörg Kukies | 1 Jan. – 6 May | 0 | 0 | 0 | 0 |
| 2. | Lars Klingbeil | 6 May – 31 Dec. | 0 | 0 | 0 | 0 |
| 3. | Dr Robert Habeck | 1 Jan. – 6 May | 0 | 0 | 0 | 0 |
| 4. | Katherina Reiche | 6 May – 31 Dec. | 0 | 0 | 0 | 0 |
| 5. | Reem Alabali-Radovan | 6 May – 31 Dec. | 0 | 0 | 0 | 0 |
| 6. | Annalena Baerbock | 1 Jan. – 6 May | 0 | 0 | 0 | 0 |
| 7. | Katharina Beck | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.4 | 6.7 |
| 8. | Dr André Berghegger | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 1 | 6.7 |
| 9. | Volker Bouffier<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0 | 6.3 |
| 10. | Stefan Evers<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.2 | 5.3 |
| 11. | Yasmin Fahimi | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.4 | 6.7 |
| 12. | Robert Feiger | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0.4 | 6.1 |
| 13. | Dr. Heiko Geue<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.1 | 0.8 | 7 |
| 14. | Tanja Gönner | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0 | 6.3 |
| 15. | Olav Gutting<sup>4)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.8 | 0.8 | 7.7 |
| 16. | Gerald Heere<sup>2),</sup> <sup>4)</sup> | 1 Jan. – 31 Dec. | 5.1 | 1.8 | 1.4 | 8.3 |
| 17. | Marion Höllinger | 1 Jan. – 31 Dec. | 5.1 | 2.5 | 1.2 | 8.8 |
| 18. | Verena Hubertz | 1 Jan. – 21 May | 2.1 | 0.8 | 0.2 | 3.1 |
| 19. | Harald Hübner<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0.4 | 0.6 | 6.1 |
| 20. | Dr Dirk Jandura<sup>4)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 1.6 | 7.3 |
| 21. | Andrea Kocsis | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.2 | 5.3 |
| 22. | Stefan Körzell | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.4 | 6.7 |
| 23. | Ulrich Lange<sup>4)</sup>  | 1 Jan. – 15 May | 1.9 | 0 | 0.2 | 2.1 |
| 24. | Steffi Lemke | 1 Jan. – 6 May | 0 | 0 | 0 | 0 |
| 25. | Dr Helena Melnikov | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 1 | 6.7 |
| 26. | Rainer Neske | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 1 | 6.7 |
| 27. | Dr Marcus Optendrenk<sup>2),</sup> <sup>5)</sup> | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| 28. | Dr Bettina Orlopp | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0 | 5.7 |
| 29. | Cem Özdemir | 1 Jan. – 6 May | 0 | 0 | 0 | 0 |
| 30. | Christian Piwarz<sup>2),</sup> <sup>5)</sup> | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| 31. | Daniel Quinten | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.4 | 6.7 |
| 32. | Alois Rainer | 6 May – 31 Dec. | 0 | 0 | 0 | 0 |
| 33. | Prof. Dr Ulrich Reuter | 1 Jan. – 31 Dec. | 5.1 | 2.5 | 0.2 | 7.8 |
| 34. | Dr Thorsten Rudolph | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.2 | 6.5 |
| 35. | Joachim Rukwied<sup>4)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0.6 | 6.3 |
| 36. | Frank Schäffler | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.8 | 7.1 |
| 37. | Jan Wenzel Schmidt | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.2 | 5.3 |
| 38. | Carsten Schneider | 6 May – 31 Dec. | 0 | 0 | 0 | 0 |
| 39. | Patrick Schnieder | 6 May – 31 Dec. | 0 | 0 | 0 | 0 |
| 40. | Svenja Schulze | 1 Jan. – 6 May | 0 | 0 | 0 | 0 |
| 41. | Holger Schwannecke | 1 Jan. – 31 Dec. | 5.1 | 1.8 | 0.4 | 7.3 |
| 42. | Dr Johann Wadephul | 6 May – 31 Dec. | 0 | 0 | 0 | 0 |
| 43. | Dr Kai H. Warnecke | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.6 | 5.7 |
| 44. | Dr Volker Wissing | 1 Jan. – 6 May | 0 | 0 | 0 | 0 |
| **Total** |  |  | **136.6** | **26.5** | **15.2** | **178.3** |

---

<sup>1)</sup> The amounts had not yet been paid out as of the reporting date 31 December 2025. 

<sup>2)</sup> Amount governed by state law 

<sup>3)</sup> Amounts for financial year 2025 until the date of assessment. Any later claims will be included in the next report. 

<sup>4)</sup> Payments for meeting attendance for 2024

<sup>5)</sup> Member waived entitlement.

**160** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Remuneration of members of the Board of Supervisory Directors for financial year 2024** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br> **No.** | <br> **Name** | <br> **Dates of<br>membership** | <br> **Board of<br>Supervisory<br>Directors<br> membership<sup>1)</sup>** | <br> **Committee<br>membership<sup>1)</sup>** | <br> **Daily<br>allowance<sup>3)</sup>** | <br> **Total** |
|  |  | **2024** | **EUR in<br>thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** | **EUR in<br> thousands** |
| 1. | Dr Robert Habeck | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| 2. | Christian Lindner | 1 Jan. – 7 Nov. | 0 | 0 | 0 | 0 |
| 3. | Dr Jörg Kukies | 7 Nov. – 31 Dec. | 0 | 0 | 0 | 0 |
| 4. | Annalena Baerbock | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| 5. | Katharina Beck | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.6 | 6.9 |
| 6. | Dr André Berghegger | 1 Jan. – 20 Feb. | 0.9 | 0.3 | 0 | 1.2 |
| 7. | Volker Bouffier<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.2 | 6.5 |
| 8. | Dr Andreas Dressel<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0 | 5.7 |
| 9. | Yasmin Fahimi | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.4 | 6.7 |
| 10. | Björn Fecker<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0 | 6.3 |
| 11. | Robert Feiger | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0.4 | 6.1 |
| 12. | Tanja Gönner<sup>4)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.2 | 6.5 |
| 13. | Olav Gutting | 22 Feb. – 31 Dec. | 4.5 | 1.1 | 0.4 | 6 |
| 14. | Gerald Heere<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.8 | 0.4 | 7.3 |
| 15. | Prof. Dr Hans-Günter Henneke | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 1.4 | 7.1 |
| 16. | Marion Höllinger | 1 Jan. – 31 Dec. | 5.1 | 2.5 | 0 | 7.6 |
| 17. | Verena Hubertz | 1 Jan. – 31 Dec. | 5.1 | 1.8 | 0 | 6.9 |
| 18. | Harald Hübner<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.6 | 5.7 |
| 19. | Dr Dirk Jandura | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 1 | 6.7 |
| 20. | Andrea Kocsis | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.4 | 5.5 |
| 21. | Stefan Körzell | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.4 | 6.7 |
| 22. | Ulrich Lange | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.4 | 5.5 |
| 23. | Steffi Lemke | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| 24. | Rainer Neske | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 1 | 6.7 |
| 25. | Dr Marcus Optendrenk<sup>2),</sup> <sup>4), 5)</sup> | 1 Jan. – 31 Dec. | 0 | 0 | 0.2 | 0.2 |
| 26. | Dr Bettina Orlopp | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0 | 5.7 |
| 27. | Cem Özdemir | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| 28. | Achim Post | 1 Jan. – 22 Mar. | 1.3 | 0.3 | 0 | 1.6 |
| 29. | Daniel Quinten<sup>4)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.8 | 7.1 |
| 30. | Prof. Dr Ulrich Reuter | 1 Jan. – 31 Dec. | 5.1 | 2.5 | 0 | 7.6 |
| 31. | Michael Richter<sup>2)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.6 | 5.7 |
| 32. | Dr Thorsten Rudolph | 11 Apr. – 31 Dec. | 3.8 | 0.7 | 0.2 | 4.7 |
| 33. | Joachim Rukwied<sup>6)</sup>  | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0.8 | 6.5 |
| 34. | Frank Schäffler | 1 Jan. – 31 Dec. | 5.1 | 1.2 | 0.8 | 7.1 |
| 35. | Jan Wenzel Schmidt | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.4 | 5.5 |
| 36. | Svenja Schulze | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| 37. | Holger Schwannecke | 1 Jan. – 31 Dec. | 5.1 | 1.8 | 0.6 | 7.5 |
| 38. | Dr Martin Wansleben | 1 Jan. – 31 Dec. | 5.1 | 0.6 | 0.6 | 6.3 |
| 39. | Dr Kai H. Warnecke | 1 Jan. – 31 Dec. | 5.1 | 0 | 0.4 | 5.5 |
| 40. | Dr Volker Wissing | 1 Jan. – 31 Dec. | 0 | 0 | 0 | 0 |
| **Total** |  |  | **148.2** | **27.2** | **13.2** | **188.6** |

---

<sup>1)</sup> The amounts had not yet been paid out as of the reporting date 31 December 2024. 

<sup>2)</sup> Amount governed by state law 

<sup>3)</sup> Amounts for financial year 2024 until the date of assessment. Any later claims will be included in the next report. 

<sup>4)</sup> Payments for meeting attendance for 2023

<sup>5)</sup> Member waived entitlement.

<sup>6)</sup> Payments for meeting attendance for 2021, 2022 and 2023

**161** 

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Financial Report > Consolidated financial statements > <u>Consolidated notes – Other notes</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

There are no pension obligations for members of the Board of Supervisory Directors.

Members of the Board of Supervisory Directors did not receive remuneration in the reporting year for personal services provided.

Members of the Board of Supervisory Directors are also covered by a directors' and officers' liability insurance policy, which insures them against the risks of financial loss associated with their actions in their capacity as Supervisory Directors and by a supplemental legal expenses insurance policy and a contractual protection insurance policy. There are currently no deductibles agreed. KfW Supervisory Directors acting in that capacity are also protected by a special legal expenses group policy for employees covering criminal action brought against Supervisory Directors and by a group accident insurance policy.

**(70) Related party disclosures** 

Transactions between KfW and related parties are concluded as part of operating activities. KfW Group's related parties in accordance with IAS 24 include its subsidiaries which are not consolidated for reasons of immateriality; joint ventures; associates; KfW shareholders (the Federal Republic of Germany (Federal Government) 80%; the federal states an aggregate 20%); interests held by the Federal Government over which it directly has significant influence; key management personnel and their family members; and entities over which this group of persons exercise control. As for the persons in the remuneration report, the persons in key positions are limited to the KfW Executive Board and the members of the Board of Supervisory Directors.

KfW has exercised the relief option in accordance with IAS 24.25 for government-related entities.

**Transactions with related parties** 

The following overview displays the scope of the transactions with KfW shareholders, interests held by the Federal Government and group companies as related parties:

**162** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Transactions with related parties** 

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** | **31 Dec. 2024** | **31 Dec. 2024** | **31 Dec. 2024** | **31 Dec. 2024** |  |
| | **Shareholders** | **Shareholders** | **Interests<br>held by the<br>Federal<br>Government** | **Interests<br>held by the<br>Federal<br>Government** | **Group<br>companies** | **Group<br>companies** | **Shareholders** | **Shareholders** | **Interests<br>held by the<br>Federal<br>Government** | **Interests<br>held by the<br>Federal<br>Government** | **Group<br>companies** | **Group<br>companies** |  |
| | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** | **EUR in** |  |
| | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** | **millions** |  |
| <br>**Assets** | | | | | | |  |  |  |  |  |  |  |
| Cash reserves |  | 0 |  | 19535 |  | 0 |  | 0 |  | 26522 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof Deutsche Bundesbank* | | *0* | | *19535* | | *0* | | *0* | | *26522* | | *0* | |
| Financial assets at amortised cost |  | 13770 |  | 206 |  | 1 |  | 13623 |  | 306 |  | 12 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers/banks |  | 11578 |  | 206 |  | 1 |  | 10850 |  | 306 |  | 12 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances |  | 11578 |  | 206 |  | 1 |  | 10850 |  | 306 |  | 12 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof BAföG government loans* | | *9968* | | *0* | | *0* | | *9242* | | *0* | | *0* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Risk provisions for loans and advances to customers/banks |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Securities and investments* | | *2191* | | *0* | | *0* | | *2773* | | *0* | | *0* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bonds |  | 2191 |  | 0 |  | 0 |  | 2773 |  | 0 |  | 0 |  |
| Financial assets at fair value |  | 8026 |  | 0 |  | 0 |  | 8085 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances to customers/banks |  | 8026 |  | 0 |  | 0 |  | 8085 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans and advances |  | 8026 |  | 0 |  | 0 |  | 8085 |  | 0 |  | 0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof holding arrangements* | | *8026* | | *0* | | *0* | | *8085* | | *0* | | *0* | |
| Other assets |  | 682 |  | 0 |  | 0 |  | 634 |  | 0 |  | 0 |  |
| **Liabilities and equity** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Financial liabilities at amortised cost |  | 4546 |  | 12580 |  | 79 |  | 4662 |  | 20859 |  | 74 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities to customers/banks |  | 4546 |  | 12580 |  | 79 |  | 4662 |  | 20859 |  | 74 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof holding arrangements* | | *1026* | | *0* | | *0* | | *327* | | *0* | | *0* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof German Finance Agency* | | *0* | | *12580* | | *0* | | *0* | | *20859* | | *0* | |
| Financial liabilities at fair value |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Other derivatives – FVM |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| Other liabilities |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  |
| **Off-balance sheet transactions** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Loan commitments, financial guarantees and other commitments granted |  | 12764 |  | 10 |  | 2 |  | 11713 |  | 85 |  | 2 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof BAföG government loans* | | *11746* | | *0* | | *0* | | *10768* | | *0* | | *0* | |
| Loan commitments, financial guarantees and other commitments received |  | 114592 |  | 500 |  | 0 |  | 138136 |  | 0 |  | 0 |  |

---

**163** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Transactions with related parties** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | <br>**31 Dec. 2025** | <br>**31 Dec. 2025** | <br>**31 Dec. 2025** | **31 Dec. 2024** | **31 Dec. 2024** | **31 Dec. 2024** |
| | **Shareholders** | **Interests<br>held by the<br>Federal<br>Government** | **Group<br>companies** | **Shareholders** | **Interests<br>held by the<br>Federal<br>Government** | **Group<br>companies** |
| | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** | **EUR in**<br>**millions** |
| <br>**Income and expenses** | | | |  |  |  |
| Interest income | 416 | 398 | 3 | 509 | 1570 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof Deutsche Bundesbank* | 0 | 390 | 0 | 0 | 1565 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof German Finance Agency* | 0 | 0 | 0 | 0 | 1 | 0 |
| Interest expense | 50 | 43 | 2 | 58 | 261 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof German Finance Agency* | 0 | 43 | 0 | 0 | 261 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Net interest income* | 366 | 355 | 1 | 451 | 1309 | 1 |
| Net gains/losses from risk provisions | 0 | 0 | 0 | 0 | 0 | 0 |
| Commission income | 613 | 0 | 0 | 622 | 0 | 0 |
| Commission expense | 0 | 0 | 0 | 0 | 0 | 0 |
| Net commission income | 613 | 0 | 0 | 622 | 0 | 0 |
| Net gains/ losses from hedge accounting | 25 | –305 | 0 | 74 | –598 | 0 |
| Net gains/losses from other financial instruments at fair value through profit or loss | –2 | 0 | 0 | 18 | 0 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *thereof holding arrangements* | –2 | 0 | 0 | 18 | 0 | 0 |
| Net other operating income or loss | 0 | 0 | 1 | 0 | 0 | 1 |

---

**Transactions with shareholders** 

Any transactions with the Federal Government and the federal states in financial year 2025 are covered by the rules and regulations set forth in the KfW Law. This also includes guarantees received for operations in which the Federal Republic of Germany has a state interest and for which the Federal Government has mandated KfW (mandated transactions in accordance with Article 2 (4) of the KfW Law).

Transactions with the Federal Government are, as a rule, offset by countertrade transactions with a third party. They do not constitute transactions within the meaning of IAS 24. For this reason, the treatment under IAS 24 is exclusively limited to business relationships with the Federal Government.

Securities and investments contains notes from the liquidity portfolio. These are exclusively bonds issued by the federal states.

As regards holding arrangements, see "Accounting policies" in section (7).

Under Other assets, KfW reports claims for reimbursement from the Federal Government in connection with the agency agreements.

In addition to holding arrangements, the liabilities primarily include Federal Government funds relating to short-term emergency aid for gas and heat and for interest grants.

The group holds guarantees from the shareholders mainly in connection with support in developing the network infrastructure as part of the energy transition, stabilisation measures through liquidity assistance for businesses during the coronavirus pandemic, the market funds business of the business sector KfW Development Bank, export, project and real estate financing, assistance to Greece, and measures to support the energy sector and promote research and development in the aviation sector.

**164** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

There were also agency agreements between the Federal Government and KfW, which are reflected in Net commission income, in particular. See the information provided in the Notes on "Net commission income" and "Trust activities".

**Transactions with interests held by the Federal Government** 

The liabilities to the German Finance Agency include promissory note loans to refinance support services in the context of the COVID-19 pandemic and energy providers. These promissory note loans are hedged against interest risk by means of a micro hedge. This resulted in the hedge result reported under the Net gains/losses from hedge accounting item.

**Transactions with group companies** 

Liabilities to customers/banks resulted from transactions with a subsidiary not included in the consolidated financial statements.

**Transactions with key persons** 

The business relationships between KfW and the members of the Executive Board and of the Board of Supervisory Directors are primarily determined by the KfW Bylaws and by applying the principles of the Federal Public Corporate Governance Code. KfW primarily provides direct loans under its promotional mandate, such as in the area of education financing, and disbursed grants of minor significance. The conditions and prices reflect market conditions or are concluded in accordance with KfW's general conditions for its loan programmes open to the general public.

**(71) Auditor's fees** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | **EUR in<br> thousands** | **EUR in<br> thousands** |
| Audit | 7118 | 6888 |
| Other attestation services | 2199 | 1910 |
| **Total** | **9317** | **8798** |

---

The audit fees include reversals of provisions for the 2024 audit of EUR 22,000 (previous year: EUR 80,000) and additional expense for other attestation services in 2024 of EUR 55,000 (previous year: reversal of provisions of EUR 15,000). Moreover, a fee of EUR 122,000 (previous year: EUR 124,000) was incurred internationally for network companies of the auditor for audit services and of EUR 7,000 (previous year: EUR 7,000) for other attestation services.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(72) Disclosures on unconsolidated structured entities** 

The group's unconsolidated structured entities within the meaning of IFRS 12 relate to the following business sectors:

**Structured entities in the business sector Financial markets** 

KfW makes investments in asset-backed securities and asset-backed commercial paper transactions as part of liquidity management. Moreover, the business sector Financial markets manages an existing portfolio to which no further investments will be added.

As of 31 December 2025, the carrying amount of the positions held totalled EUR 7.3 billion (31 Dec. 2024: EUR 6.8 billion).

**Structured entities in the business sector Individualfinanzierung & Öffentliche Kunden** 

***(Customised Finance* & *Public Clients)*** 

As part of a mandated transactions, KfW is providing assistance, on behalf of the Federal Government, in developing a national hydrogen core network. The funds made available in this context are secured in full by a federal guarantee.

As of 31 December 2025, the carrying amount of the positions held totalled EUR 24.0 billion (31 Dec. 2024: EUR 24.0 billion).

The hydrogen core network mandated transaction results in loans and advances to customers of EUR 176 million of as 31 December 2025 (31 Dec. 2024: EUR 4 million). Irrevocable loan commitments include available funds of EUR 23,828 million (EUR 23,996 million). There is no risk of loss due to the federal guarantee. The company operating in the context of the mandated transaction was ranked as a structured entity for the first time in 2025; the prior-year figures have been adjusted accordingly.

**Structured entities in the business sector Export and project finance** 

Tailored leasing/financing concepts are structured via property leasing companies, primarily in the "Aviation and Rail" and "Maritime Industries" sector departments. A separate entity is created for each transaction, with the group participating as the lender. In the case of some of these business partners, the sponsoring banks act as managers of trust companies, but in the majority of cases, these business partners are set up as separate legal entities. The group provides loans to these companies, generally together with other credit institutions. KfW also has credit relationships with some structured entities as market participants in the commodities financing business, where the group supports these customers with pre-export financing structures.

As of 31 December 2025, the carrying amount of the positions held totalled EUR 1.1 billion (31 Dec. 2024: EUR 1.5 billion).

**Structured entities in the business sector DEG** 

As a finance and advisory institution, DEG provides support within its development mandate in line with its business activity guidelines. DEG's mandate is to promote the development of the private sector of a) developing countries, b) central and eastern European countries and New Independent States (NIS), and c) other countries approved by its shareholder KfW in agreement with the Federal Government. In certain isolated cases this is undertaken via investments in structured entities in the form of equity investments and loans. In accordance with the applied risk principles, the risk of loss is limited to the volume invested or committed.

As of 31 December 2025, the carrying amount of the positions held totalled EUR 0.4 billion (31 Dec. 2024: EUR 0.4 billion).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The following table shows the carrying amounts of assets relating to unconsolidated structured entities and the maximum possible loss that could result from these exposures.

**Maximum risk of loss as of 31 December 2025** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Loans and<br>advances to<br>customers** | **Securities and<br>investments** | **Other assets** | **Contingent<br>liabilities;<br>irrevocable<br>loan<br>commitments** |
| | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Carrying amount | 1429 | 7452 | 1 | 23966 |
| Risk and other provisions | 12 | 0 | 0 | 0 |
| **Max. risk of loss** | **1417<sup>1)</sup>** | **7452** | **1** | **23965<sup>2)</sup>** |

---

**Maximum risk of loss as of 31 December 2024** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Loans and<br>advances to<br>customers** | **Securities and<br>investments** | **Other assets** | **Contingent<br>liabilities;<br>irrevocable<br>loan<br>commitments** |
| | **EUR in millions** | **EUR in millions** | **EUR in millions** | **EUR in millions** |
| Carrying amount | 1535 | 6908 | 1 | 24273 |
| Risk and other provisions | 18 | 0 | 0 | 0 |
| **Max. risk of loss** | **1517<sup>1)</sup>** | **6908** | **1** | **24273<sup>2)</sup>** |

---

---

| | |
|:---|:---|
| <sup>1), 2)</sup> | The hydrogen core network mandated transaction results in loans and advances to customers of EUR 176 million of as 31 December 2025 (31 Dec. 2024: EUR 4 million). Irrevocable loan commitments include available funds of EUR 23,828 million (EUR 23,996 million). There is no risk of loss due to the federal guarantee. The company operating in the context of the mandated transaction was ranked as a structured entity for the first time in 2025; the prior-year figures have been adjusted accordingly.  |

---

The maximum risk of loss is equal to the nominal amount for credit lines, (financial) guarantees and other liquidity facilities minus the provisions for credit risks recognised in the statement of financial position. The maximum risk of loss relating to the group's investments is their carrying amount (net). The maximum risk of loss does not include effects from the group's hedging instruments used to reduce the maximum risk of loss.

No support is provided to structured entities in the group beyond the respective financing.

In exceptional cases, the group acts as sponsor for structured entities in which it holds shares purely on a trust basis on behalf of the Federal Government. The risk of these structured entities lies exclusively with the Federal Government. In such cases, the group is considered the sponsor of the structured entities because the entities were initiated and/or structured by the group on behalf of the Federal Government.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(73) Disclosures on shareholdings** 

**Subsidiaries included in the consolidated financial statements** 

---

| | | | |
|:---|:---|:---|:---|
| **Name/registered office** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Share held** | **Equity (IFRS)**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **as of 31 Dec. 2025** | **Equity (IFRS)**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**as of 31 Dec. 2024** |
| | **%** | **EUR in millions** | **EUR in millions** |
| KfW IPEX-Bank GmbH, Frankfurt am Main | 100.0 | 4793 | 5079 |
| DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, Cologne | 100.0 | 3189 | 3155 |
|  KfW IPEX-Beteiligungsholding GmbH, Frankfurt am Main | 100.0 | 4115 | 3321 |
|  Interkonnektor GmbH, Frankfurt am Main, Germany | 100.0 | 41 | 38 |
| KfW Capital GmbH & Co. KG, Frankfurt am Main, Germany | 100.0 | 1728 | 1234 |
|  KfW IPEX-Bank Asia Ltd., Singapore | 100.0 | 14 | 14 |

---

**Associates included in the consolidated financial statements using the equity method** 

---

| | | | |
|:---|:---|:---|:---|
| **Name/registered office** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Share held** | **Equity**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **as of 30 Sept.<br>2025** | **Equity**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**as of 30 Sept. 2024** |
| | **%** | **EUR in millions** | **EUR in millions** |
| Green for Growth Fund, Southeast Europe S. A., Luxembourg | 10.4 | 739 | 744 |
| coparion GmbH & Co. KG, Cologne | 16.4 | 249 | 342 |
| **Name/registered office** | **Share held** | **Equity** | **Equity** |
|  |  | **as of 31 Dec. 2025** | **as of 31 Dec. 2024** |
|  | **%** | **EUR in millions** | **EUR in millions** |
| DC Nordseekabel GmbH und Co. KG, Bayreuth | 50.0 | 685 | 727 |

---

Green for Growth Fund, Southeast Europe S.A. (GGF) has been included in the consolidated financial statements using the equity method since 2010. GGF is a fund to promote SME and private household investment in energy efficiency and renewable energy in the Western Balkans and Turkey (business sector KfW Development Bank).

DC Nordseekabel GmbH und Co. KG (DC Nordseekabel) was accounted for using the equity method, as a joint venture of Interkonnektor GmbH (Nordseekabel-Projekt NordLink in the business sector Export and project finance), for the first time in financial year 2015. The NordLink project is one of the major projects in the European energy sector and represents an investment volume of around EUR 1.5 to 2 billion. As it will primarily serve as a conduit for renewably sourced energy, the underwater cable will play an important role in the success of Germany's energy transition. Norwegian state-owned power grid operator Statnett, KfW and the transmission systems operator TenneT, which is responsible for the German territory of the North Sea, concluded a cooperation agreement in February 2015 to construct an underwater cable between Germany and Norway. The NordLink project will be realised by a syndicate in which Statnett and DC Nordseekabel each hold a 50% stake. KfW – via its subsidiary Interkonnektor GmbH – and TenneT each hold a 50% stake in DC Nordseekabel, which is responsible for construction and obtaining permits in Germany.

coparion GmbH & Co. KG (coparion; business sector KfW Capital) as an associated company was accounted for using the equity method for the first time in financial year 2016. This co-investment fund by KfW and the German Federal Ministry for Economic Affairs and Energy (BMWE) participated in young technology companies by offering venture capital, together with private lead investors, and is now in the divestment phase.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Entities not included in the consolidated financial statements** 

Six subsidiaries, one joint venture, and five associated companies of minor significance to the presentation of the net assets, financial and earnings position of KfW Group have not been consolidated. Instead, they are shown in the statement of financial position under Securities and investments. These companies account for approximately 0.03% of KfW Group's total assets.

**List of KfW Group shareholdings as of 31 December 2025** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place** | **Capital** | **CC<sup>1)</sup>** | | **Equity in** | **Net income in** |
|  |  |  | **share** | | | **TCU<sup>2),</sup> <sup>3)</sup>** | **TCU<sup>2),</sup> <sup>3)</sup>** |
|  |  |  | **in %** | | | | |
|  |  |  |  |  | **Exchange rate**<br>**EUR 1.00**<br>**= CU as of**<br>**31 Dec. 2025<sup>2)</sup>** |  |  |
| **KfW shareholdings** | **KfW shareholdings** | **KfW shareholdings** | **KfW shareholdings** | **KfW shareholdings** | **KfW shareholdings** | **KfW shareholdings** | **KfW shareholdings** |
| **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** |
| 1  | DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH | Cologne | 100 | EUR | 1.00 | 2561669 | –17344 |
| 2 | Interkonnektor GmbH | Frankfurt |  |  |  |  |  |
|  |  | am Main | 100 | EUR | 1.00 | 38498 | –15944 |
| 3 | KfW Beteiligungsholding GmbH | Frankfurt |  |  |  |  |  |
|  |  | am Main | 100 | EUR | 1.00 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2888975 | 571630 |
| 4 | KfW Capital GmbH & Co. KG | Frankfurt |  |  |  |  |  |
|  |  | am Main | 100 | EUR | 1.00 | 1117101 | 0 |
| **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** |
| 5 | Finanzierungs- und Beratungsgesellschaft mbH | Berlin | 100 | EUR | 1.00 | 6072 | 288 |
| 6 | tbg Technologie- Beteiligungsgesellschaft mbH | Bonn | 100 | EUR | 1.00 | 81761 | 3411 |
| **C. Other shareholdings (only capital shares totalling at least 20%)** | **C. Other shareholdings (only capital shares totalling at least 20%)** | **C. Other shareholdings (only capital shares totalling at least 20%)** | **C. Other shareholdings (only capital shares totalling at least 20%)** | **C. Other shareholdings (only capital shares totalling at least 20%)** | **C. Other shareholdings (only capital shares totalling at least 20%)** | **C. Other shareholdings (only capital shares totalling at least 20%)** | **C. Other shareholdings (only capital shares totalling at least 20%)** |
| 7 | Berliner Energieagentur GmbH | Berlin | 25 | EUR | 1.00 | 6613 | –989 |
| **Shareholdings of KfW IPEX-Bank GmbH** | **Shareholdings of KfW IPEX-Bank GmbH** | **Shareholdings of KfW IPEX-Bank GmbH** | **Shareholdings of KfW IPEX-Bank GmbH** |  |  |  |  |
| **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** |  |  |
| 1 | KfW IPEX-Bank Asia Ltd. | Singapore, |  |  |  |  |  |
|  |  | Singapore | 100 | SGD | 1.51 | 19980 | 1864 |
| **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** | **B. Subsidiaries not included in the consolidated financial statements** |
| 2 | KFW Bankengruppe Representações Ltda. | São Paulo,<br>Brazil | 50 | BRL | 6.44 | 953 | 926 |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**List of KfW Group shareholdings as of 31 December 2025** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place** | **Capital** | **CC<sup>1)</sup>** | | **Equity in** | **Net income in** |
|  |  |  | **share** | | | **TCU<sup>2),</sup> <sup>3)</sup>** | **TCU<sup>2),</sup> <sup>3)</sup>** |
|  |  |  | **in %** | | | | |
|  |  |  |  |  | **Exchange rate**<br>**EUR 1.00**<br>**= CU as of**<br>**31 Dec. 2025<sup>2)</sup>** |  |  |
| **Shareholdings of KfW Beteiligungsholding GmbH** | **Shareholdings of KfW Beteiligungsholding GmbH** | **Shareholdings of KfW Beteiligungsholding GmbH** | **Shareholdings of KfW Beteiligungsholding GmbH** | **Shareholdings of KfW Beteiligungsholding GmbH** | **Shareholdings of KfW Beteiligungsholding GmbH** | **Shareholdings of KfW Beteiligungsholding GmbH** |  |
| **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** | **A. Fully consolidated subsidiaries included in the consolidated financial statements** |
| 1 | KfW IPEX-Bank GmbH | Frankfurt am |  |  |  |  |  |
|  |  | Main | 100 | EUR | 1.00 | 3529335 | 0 |
| **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** |  |
| **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** |
| 1  | DEG Impact GmbH | Cologne | 100 | EUR | 1.00 | 4053 | 399 |
| 2 | DEG Impact GmbH | Cologne | 100 | EUR | 1.00 | 3000 | 454 |
| 3 | KFW Bankengruppe Representações<br> Ltda. | São Paulo,<br> Brazil | 50 | BRL | 6.44 | 953 | 926 |
| **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** |  |  |  |
| 4 | Ace Power Embilipitiya Pvt Ltd. | Colombo, Sri |  |  |  |  |  |
|  |  | Lanka | 26 | LKR | 363.64 | 4025462 | –250325 |
| 5 | ADP Enterprises W.L.L. | Manama, |  |  |  |  |  |
|  |  | Bahrain | 23.3 | BHD | 0.44 | 207021 | –22398 |
| 6 | ADP II Holding 11 S.à.r.l. | Luxembourg, |  |  |  |  |  |
|  |  | Luxembourg | 22.2 | USD | 1.18 | 55529 | 22 |
| 7 | AEP China Hydro Ltd. | Ebène CyberCity, |  |  |  |  |  |
|  |  | Mauritius | 30.2 | USD | 1.18 | 292 | –104 |
| 8 | AfricInvest III – SPV 1 | Port Louis, |  |  |  |  |  |
|  |  | Mauritius | 21.8 | EUR | 1.00 | 57138 | 5564 |
| 9 | Agrofundo Brasil VI Fundo de Investimento em<br> Participações Multiestratégia | São Paulo,<br> Brazil | 29.9 | BRL | 6.44 | 34768 | 5998 |
| 10 | AO Bucharagips | Kogon,<br>Uzbekistan | 24.9 | UZS | 14099.78 | 132739977 | 101408574 |
| 11 | Apis Growth 2 Ltd. | Ebène CyberCity, |  |  |  |  |  |
|  |  | Mauritius | 25.6 | USD | 1.18 | 37197 | –1165 |
| 12 | CGFT Capital Pooling GmbH & Co. KG | Berlin, Germany | 40 | EUR | 1.00 | 43 | –3 |
| 13 | Evonik Lanxing (Rizhao) Chemical Industrial Co. Ltd. | Rizhao, China | 41 | CNY | 8.23 | 120021 | –36016 |
| 14 | Grand Bremner Corp Pte. Ltd. | Singapore, |  |  |  |  |  |
|  |  | Singapore | 23.3 | USD | 1.18 | 61227 | –1631 |
| 15 | Greater Pacific Capital MIV Ltd. | George Town, |  |  |  |  |  |
|  |  | Cayman Islands | 26.7 | USD | 1.18 | 42039 | 12124 |
| 16 | Knauf Gips Buchara OOO | Bukhara, |  |  |  |  |  |
|  |  | Uzbekistan | 24.9 | UZS | 14099.78 | 557319702 | 115339037 |
| 17 | Knauf Gypsum Philippines Inc., | Calaca, |  |  |  |  |  |
|  |  | Philippines | 25 | PHP | 69.27 | 1739717 | 90801 |
| 18 | Landsberg Investments LLC | Wilmington,<br> New Castle, |  |  |  |  |  |
|  |  | USA | 52.9 | USD | 1.18 | <sup>4)</sup> | <sup>4)</sup> |
| 19 | MC II Pasta Ltd. | Ta' Xbiex, |  |  |  |  |  |
|  |  | Malta | 32.2 | EUR | 1.00 | 6475 | –1343 |
| 20 | Metier Retailability en Commandite Partnership | Dunkeld, South<br>Africa | 22.1 | ZAR | 19.44 | 830435 | –167967 |
| 21 | Novel Sky Global Limited | Road Town,<br> British Virgin |  |  |  |  |  |
|  |  | Islands | 25 | USD | 1.18 | <sup>4)</sup> | <sup>4)</sup> |
| 22 | OAO Belgips | Minsk, |  |  |  |  |  |
|  |  | Belarus | 50 | BYN | 3.45 | 32351 | –612 |
| 23 | Onstar Galaxy SPV Pte. Ltd. | Singapore, |  |  |  |  |  |
|  |  | Singapore | 33.1 | USD | 1.18 | 37293 | –1640 |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**List of KfW Group shareholdings as of 31 December 2025** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place** | **Capital** | **CC<sup>1)</sup>** | | **Equity in** | **Net income in** |
|  |  |  | **share** | | | **TCU<sup>2),</sup> <sup>3)</sup>** | **TCU<sup>2),</sup> <sup>3)</sup>** |
|  |  |  | **in %** | | | | |
|  |  |  |  |  | **Exchange rate**<br>**EUR 1.00**<br>**= CU as of**<br>**31 Dec. 2025<sup>2)</sup>** |  |  |
| **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** | **Shareholdings of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH** |  |
| **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** | **B. Other shareholdings (only capital shares totalling at least 20%)** |
| 24  | Osmanthus II Cayman Investment, L.P. | Grand Cayman,<br> Cayman Islands | 100 | USD | 1.18 | 18593 | 4812 |
| 25 | Stratus SCP Fleet Fundo de Investimento em Participações – Multiestratégia | São Paulo,<br> Brazil | 39.7 | BRL | 6.44 | 97996 | 14451 |
| 26 | Thebes B.V. | Cairo, |  |  |  |  |  |
|  |  | Egypt | 38.7 | EGP | 56.03 | 2341246 | 551810 |
| 27 | TOO Isi Gips Inder | Inderborskiy, |  |  |  |  |  |
|  |  | Kazakhstan | 40 | KZT | 595.97 | 1377788 | 99207 |
| 28 | TOO Knauf Gips Kapchagay Enterprise | Kapchagay, |  |  |  |  |  |
|  | with DEG participation | Kazakhstan | 40 | KZT | 595.97 | 16578872 | 6756013 |
| 29 | Vietnam Opportunity Fund II PTE. Ltd. | Singapore, |  |  |  |  |  |
|  |  | Singapore | 32 | USD | 1.18 | 48525 | 2324 |
| 30 | Whitlam Holding PTE. Ltd. | Singapore, |  |  |  |  |  |
|  |  | Singapore | 38.7 | USD | 1.18 | 38702 | –10143 |
| 31 | Worldwide Group, Inc | Charlestown,<br> Saint Kitts |  |  |  |  |  |
|  |  | and Nevis | 33.4 | USD | 1.18 | 33528 | 2609 |
| 32 | wpd Duqueco S.p.A. | Santiago, |  |  |  |  |  |
|  |  | Chile | 24.5 | CLP | 1057.84 | 32903 | 1277 |
| 33 | wpd Malleco S.p.A. | Santiago, |  |  |  |  |  |
|  |  | Chile | 24.5 | CLP | 1057.84 | 101593 | –5123 |
| 34 | wpd Negrete S.p.A. | Santiago, |  |  |  |  |  |
|  |  | Chile | 24.5 | CLP | 1057.84 | 13052 | –740 |
| **Shareholdings of Interkonnektor GmbH** | **Shareholdings of Interkonnektor GmbH** | **Shareholdings of Interkonnektor GmbH** | **Shareholdings of Interkonnektor GmbH** |  |  |  |  |
| **A. Joint ventures included in the consolidated financial statements** | **A. Joint ventures included in the consolidated financial statements** | **A. Joint ventures included in the consolidated financial statements** | **A. Joint ventures included in the consolidated financial statements** | **A. Joint ventures included in the consolidated financial statements** |  |  |  |
| 1 | DC Nordseekabel GmbH & Co. KG | Bayreuth | 50 | EUR | 1.00 | 684527 | 27165 |
| **B. Joint ventures not included in the consolidated financial statements** | **B. Joint ventures not included in the consolidated financial statements** | **B. Joint ventures not included in the consolidated financial statements** | **B. Joint ventures not included in the consolidated financial statements** | **B. Joint ventures not included in the consolidated financial statements** |  |  |  |
| 2 | DC Nordseekabel Beteiligungs GmbH | Bayreuth | 50 | EUR | 1.00 | 78 | 3 |
| **Shareholdings of KfW Capital GmbH & Co. KG** | **Shareholdings of KfW Capital GmbH & Co. KG** | **Shareholdings of KfW Capital GmbH & Co. KG** | **Shareholdings of KfW Capital GmbH & Co. KG** |  |  |  |  |
| **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** | **A. Subsidiaries not included in the consolidated financial statements** |  |  |  |
| 1 | KfW Capital Verwaltungs GmbH | Frankfurt |  |  |  |  |  |
|  |  | am Main | 100 | EUR | 1.00 | 42 | 1 |

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<sup>1)</sup> ISO currency code

<sup>2)</sup> CU = currency units in local currency; TCU = thousand currency units in local currency

<sup>3)</sup> Financial statements prepared in accordance with local financial reporting framework

<sup>4)</sup> No current annual financial statements are available.

**(74) Events after the balance sheet date** 

On 28 February 2026, Israel and the USA commenced air strikes on targets in Iran. This was followed by air attacks from Iran on Israel and other targets in the region. Based on the current perspective, KfW does not expect any significant direct or indirect impacts from the conflict on its net assets, financial and earnings position. It is not really possible to give a reliable forecast of the overall impact on the net assets, financial and earnings position at present, given the dynamic development, particularly concerning uncertain further escalation or de-escalation steps of the military conflict in the region. KfW will continue to closely monitor the development of the conflict and the consequences for KfW's business.

No further events of particular impact on KfW's net assets, financial and earnings position occurred after the end of the financial year.

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Attestations Independent auditor's report 173

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## Independent auditor's report
To Kreditanstalt für Wiederaufbau Anstalt des öffentlichen Rechts, Frankfurt am Main/Germany

***REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND***

***OF THE COMBINED MANAGEMENT REPORT***

**Audit Opinions** 

We have audited the consolidated financial statements of Kreditanstalt für Wiederaufbau Anstalt des öffentlichen Rechts, Frankfurt am Main/Germany, and its subsidiaries (the Group), which comprise the statement of financial position as at 31 December 2025, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the financial year from 1 January to 31 December 2025, and the notes to the consolidated financial statements, including material accounting policy information. In addition, we have audited the combined management report for the parent and the group of Kreditanstalt für Wiederaufbau Anstalt des öffentlichen Rechts, Frankfurt am Main/Germany, for the financial year from 1 January to 31 December 2025. In accordance with the German legal requirements, we have not audited the content of the separate combined non-financial report of KfW as the parent company and the group in accordance with Section 289b to Section 289e, Section 315b and Section 315c German German Commercial Code (HGB), which is referred to in the section "Non-financial statement" of the combined management report.

In our opinion, on the basis of the knowledge obtained in the audit,

● the accompanying consolidated financial statements comply, in all material respects, with the IFRS<sup>®</sup> Accounting Standards issued by the International Accounting Standards Board (IASB) (hereinafter "IFRS Accounting Standards") as adopted by the EU and the additional requirements of
German commercial law pursuant to Section 315e (1) HGB and, in compliance with these requirements, give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December 2025 and of its financial
performance for the financial year from 1 January to 31 December 2025, and

● the accompanying combined management report as a whole provides an appropriate view of the Group's position. In all
material respects, this combined management report is consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our audit opinion on
the combined management report does not cover the contents of the combined non-financial report of KfW as the parent company and the group in accordance with Section 289b to Section 289e,
Section 315b and Section 315c HGB referred to above.

Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the combined management report.

**Basis for the Audit Opinions** 

We conducted our audit of the consolidated financial statements and of the combined management report in accordance with Section 317 HGB and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW). Our responsibilities under those requirements and principles are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report" section of our auditor's report. We are independent of the group entities in accordance with the requirements of German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions on the consolidated financial statements and on the combined management report.

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**Other Information** 

The executive directors and/or the board of supervisory directors are responsible for the other information. The other information comprises

● the report of the board of supervisory directors which is expected to be presented to us after the date of this
auditor's report,

● the separate combined non-financial report of KfW as the parent company and the
group in accordance with Section 289b to Section 289e, Section 315b and Section 315c HGB, which is referred to in the section "Non-financial statement" of the combined
management report,

● the corporate governance report, which also includes the "Declaration of compliance", which is referred to in
the section "Declaration of compliance" of the combined management report and which is expected to be presented to us only after the date of this auditor's report,

● the executive directors' confirmation in accordance with Section 297 (2) sentence 4 and Section 315 (1)
sentence 5 HGB regarding the consolidated financial statements and the combined management report, and

● all other parts of the annual report,

● but not the consolidated financial statements, not the audited content of the disclosures in the combined management report
and not our auditor's report thereon.

The board of supervisory directors is responsible for the report of the board of supervisory directors. In accordance with Section 19 of the KfW Bylaws, the executive directors and the board of supervisory directors are required to annually declare that they recognise the Federal Public Corporate Governance Code as amended and to publish the declaration of compliance as part of the corporate governance report. Otherwise, the executive directors are responsible for the other information.

Our audit opinions on the consolidated financial statements and on the combined management report do not cover the other information, and consequently we do not express an audit opinion or any other form of assurance conclusion thereon.

In connection with our audit, our responsibility is to read the other information identified above and, in doing so, to consider whether the other information

● is materially inconsistent with the consolidated financial statements, with the audited content of the disclosures in the
combined management report or our knowledge obtained in the audit, or

● otherwise appears to be materially misstated.

**Responsibilities of the Executive Directors and the Board of Supervisory Directors for the Consolidated Financial Statements and the Combined Management Report** 

The executive directors are responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRS Accounting Standards as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB, and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position and financial performance of the Group. In addition, the executive directors are responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud (i.e. fraudulent financial reporting and misappropriation of assets) or error.

In preparing the consolidated financial statements, the executive directors are responsible for assessing the Group's ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.

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Furthermore, the executive directors are responsible for the preparation of the combined management report that as a whole provides an appropriate view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a combined management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the combined management report.

The board of supervisory directors is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial statements and of the combined management report.

**Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report** 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the combined management report as a whole provides an appropriate view of the Group's position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor's report that includes our audit opinions on the consolidated financial statements and on the combined management report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Section 317 HGB and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and this combined management report.

We exercise professional judgement and maintain professional scepticism throughout the audit. We also:

● identify and assess the risks of material misstatement of the consolidated financial statements and of the combined
management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our audit opinions. The risk of not detecting a
material misstatement resulting from fraud is higher than the risk of not detecting a material misstatement resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.

● obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of
arrangements and measures relevant to the audit of the combined management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an audit opinion on the effectiveness of internal
control or these arrangements and measures of the Group.

● evaluate the appropriateness of accounting policies used by the executive directors and the reasonableness of estimates made
by the executive directors and related disclosures.

● conclude on the appropriateness of the executive directors' use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in the auditor's report to the related disclosures in the consolidated financial statements and in the combined management report or, if such disclosures are inadequate, to modify our respective audit opinions. Our
conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern.

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● evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and
financial performance of the Group in compliance with IFRS Accounting Standards as adopted by the EU and with the additional requirements of German commercial law pursuant to Section 315e (1) HGB.

● plan and perform the audit of the consolidated financial statements in order to obtain sufficient appropriate audit evidence
regarding the financial information of the entities or of the business activities within the Group, which serves as a basis for forming audit opinions on the consolidated financial statements and on the combined management report. We are responsible
for the direction, supervision and inspection of the audit procedures performed for the purposes of the group audit. We remain solely responsible for our audit opinions.

● evaluate the consistency of the combined management report with the consolidated financial statements, its conformity with
German law, and the view of the Group's position it provides.

● perform audit procedures on the prospective information presented by the executive directors in the combined management
report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by the executive directors as a basis for the prospective information, and evaluate the proper derivation of the prospective
information from these assumptions. We do not express a separate audit opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the
prospective information.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

**OTHER LEGAL AND REGULATORY REQUIREMENTS** 

**Report on the Audit of the Electronic Reproductions of the Consolidated Financial Statements and of the Combined Management Report Prepared for Publication Pursuant to Section 317 (3a) HGB** 

**Audit Opinion** 

We have performed assurance work in accordance with Section 317 (3a) HGB to obtain reasonable assurance whether the electronic reproductions of the consolidated financial statements and of the combined management report (hereinafter referred to as "ESEF documents") prepared for publication, contained in the file, which has the SHA-256 value d84b219d35845ae59119cd011f5c50d1959786cdd1bb28c8b25e72593b576c48, meet, in all material respects, the requirements for the electronic reporting format pursuant to Section 328 (1) HGB ("ESEF format"). In accordance with the German legal requirements, this assurance work only covers the conversion of the information contained in the consolidated financial statements and the combined management report into the ESEF format, and therefore covers neither the information contained in these electronic reproductions nor any other information contained in the file identified above.

In our opinion, the electronic reproductions of the consolidated financial statements and of the combined management report prepared for publication contained in the file identified above meet, in all material respects, the requirements for the electronic reporting format pursuant to Section 328 (1) HGB. Beyond this assurance opinion and our audit opinions on the accompanying consolidated financial statements and on the accompanying combined management report for the financial year from 1 January to 31 December 2025 contained in the "Report on the Audit of the Consolidated Financial Statements and of the Combined Management Report" above, we do not express any assurance opinion on the information contained within these electronic reproductions or on any other information contained in the file identified above.

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**Basis for the Audit Opinion** 

We conducted our assurance work on the electronic reproductions of the consolidated financial statements and of the combined management report contained in the file identified above in accordance with Section 317 (3a) HGB and on the basis of the IDW Assurance Standard: Assurance Work the Electronic Reproductions of Financial Statements and Management Reports Prepared for Publication Purposes Pursuant to Section 317 (3a) HGB (IDW AsS 410 (06.2022)). Our responsibilities in this context are further described in the "Group Auditor's Responsibilities for the Assurance Work on the ESEF Documents" section. Our audit firm has applied the requirements of the IDW Quality Management Standards.

**Responsibilities of the Executive Directors and the Board of Supervisory Directors for the ESEF Documents** 

The executive directors of the parent are responsible for the preparation of the ESEF documents based on the electronic files of the consolidated financial statements and of the combined management report according to Section 328 (1) sentence 4 no. 1 HGB and for the tagging of the consolidated financial statements according to Section 328 (1) sentence 4 no. 2 HGB.

In addition, the executive directors of the parent are responsible for such internal control that they have considered necessary to enable the preparation of ESEF documents that are free from material intentional or unintentional non-compliance with the requirements for the electronic reporting format pursuant to Section 328 (1) HGB.

The board of supervisory directors is responsible for overseeing the process for preparing the ESEF documents as part of the financial reporting process.

**Group Auditor's Responsibilities for the Audit of the ESEF Documents** 

Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB. We exercise professional judgement and maintain professional scepticism throughout the assurance work. We also:

● identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB, design and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide
a basis for our assurance opinion.

● obtain an understanding of internal control relevant to the assurance work on the ESEF documents in order to design
assurance procedures that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these controls.

● evaluate the technical validity of the ESEF documents, i.e. whether the file containing the ESEF documents meets the
requirements of the Delegated Regulation (EU) 2019/815, in the version in force at the balance sheet date, on the technical specification for this electronic file.

● evaluate whether the ESEF documents enable an XHTML reproduction with content equivalent to the audited consolidated
financial statements and to the audited combined management report.

● evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with the requirements
of Articles 4 and 6 of the Delegated Regulation (EU) 2019/815, in the version in force at the balance sheet date, enables an appropriate and complete machine-readable XBRL copy of the XHTML reproduction.

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***OTHER MATTER – USE OF THE AUDITOR'S REPORT***

Our auditor's report must always be read together with the audited consolidated financial statements and the audited combined management report as well as with the assured ESEF documents. The consolidated financial statements and the combined management report converted into the ESEF format – including the versions to be submitted for inclusion in the Company Register – are merely electronic reproductions of the audited consolidated financial statements and the audited combined management report and do not take their place. In particular, the ESEF report and our assurance opinion contained therein are to be used solely together with the assured ESEF documents made available in electronic form.

Frankfurt am Main/Germany, 5 March 2026

**Deloitte GmbH** 

Wirtschaftsprüfungsgesellschaft

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| | |
|:---|:---|
| Signed: | Signed: |
| Prof. Dr Carl-Friedrich Leuschner | Christian Schweitzer |
| Wirtschaftsprüfer | Wirtschaftsprüfer |
| (German Public Auditor) | (German Public Auditor) |

---

**178** 

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## Ex-99.F

**Exhibit (f)** 

**CONSENT OF INDEPENDENT AUDITORS** 

We consent to the incorporation by reference in the Registration Statement under Schedule B (No. 333-279392) of KfW and in the related Prospectus of our report dated March 5, 2026, with respect to the consolidated financial statements as at December 31, 2025 and for the fiscal year from January 1, 2025 to December 31, 2025 of KfW included in this Annual Report on Form 18-K of KfW for the year ended December 31, 2025.

Frankfurt am Main, Germany

May 7, 2026

## Ex-99.G

**Exhibit (g)** 

**CONSENT OF THE FEDERAL REPUBLIC OF GERMANY** 

On behalf of the Federal Republic of Germany, I hereby consent to the making of the statements with respect to the Federal Republic of Germany included in the Annual Report on Form 18-K of KfW for the year ended December 31, 2025 and to the incorporation by reference of such information in the Registration Statement under Schedule B of KfW filed with the Securities and Exchange Commission of the United States of America.

May 7, 2026

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| | | |
|:---|:---|:---|
| By: | DR. MARKUS HÖRMANN | DR. MARKUS HÖRMANN |
|  | Name: | Dr. Markus Hörmann |
|  | Title: | *Ministerialrat* (Head of Division) <br>Ministry of Finance |

---