Navigation and service of the Landwirtschaftlichen Rentenbank

jump directly to:

We create ideal growth conditions

Rentenbank – First half of 2022

Rentenbank - scheduled funding volume 2021

Investor Presentation

Germany's development agency for agribusiness and rural areas

Förderangebote

Promotional Activities

We provide funding to banks involved in financing agriculture, its upstream and downstream sectors and rural areas.

learn more

events


Rentenbank: Strong increase in the volume of new special promotional loans granted in the first half of 2022

12 August 2022

Frankfurt. Landwirtschaftliche Rentenbank encountered considerably stronger demand for its special promotional loans in the first half of 2022, the volume of which rose by nearly one third to EUR 3.8 billion. The “Renewable Energy” promotional line experienced especially strong growth. The “Rural Development” and “Agribusiness and Food” promotional lines also posted considerable gains. Germany’s development agency for agribusiness and rural areas generated a lower operating profit in the first half of 2022. The capital ratios remained at high levels.

Rentenbank Schriftzug

“Renewable Energy” promotional line more than doubles the volume of new loans granted

The volume of new loans granted in the “Renewable Energy” promotional line soared to EUR 1 billion (EUR 443 million). Special promotional loans granted to finance wind power increased the most, rising from EUR 291 million to EUR 750 million. Biogas financing loans doubled to EUR 105 million (EUR 52 million). The introduction of a new loan variant featuring fixed interest-rate periods in excess of 10-years in September 2020 continued to yield positive effects in the “Renewable Energy” promotional line. As of early April 2022, Rentenbank now offers loans with long fixed interest-rate periods in all its promotional lines.

Thanks to stronger demand for machinery and equipment financing, the volume of new loans granted in the “Agribusiness and Food” promotional line also increased substantially to EUR 613 million (EUR 432 million).

The “Rural Development” promotional line likewise experienced very dynamic growth, with the volume of new loans rising to EUR 914 million (EUR 587 million). This increase is attributable to stronger demand for Rentenbank’s global loans on the part of the German federal states’ development banks.

The volume of new loans granted in the “Agriculture” promotional line amounted to EUR 1,104 million in the first half of 2022, that being slightly less than the year-ago comparison figure (EUR 1,301 million). In particular, agricultural enterprises demanded fewer special promotional loans for farm buildings.

The total volume of special promotional loans granted by Rentenbank rose by 31.6% to EUR 3.8 billion in the first half of 2022 (EUR 2.9 billion).


Increased promotion of innovation and start-ups

Rentenbank promotes innovation in all stages from development to practical implementation and dissemination of pioneering methods and products. It promotes the early-stage financing of specifically agriculture-related start-ups from the “Special-Purpose Fund of the Federal Republic of Germany,” which is managed by Landwirtschaftliche Rentenbank. Subordinated loans totalling EUR 1.3 million and EUR 0.1 were granted in the form of Innovation Vouchers to two start-ups in the first half of 2022. Rentenbank also promoted seven project partners with grants totalling EUR 1.6 million from its Innovation Fund.

In February 2022, Rentenbank contributed EUR 25 million to the European Circular Bioeconomy Fund (ECBF). This fund initiated by the European Commission invests in innovative, fast-growing bio-economy enterprises with the goal of reducing the use of fossil fuels, promoting a bio-based circular economy, and contributing to climate-neutral economic development. Funds totalling EUR 3.6 million were already drawn down through the end of June.

Besides providing financial support to agriculture-related start-ups, Rentenbank also supports the entire start-up ecosystem in order to speed up the market introduction of innovative and sustainable ideas. In collaboration with the German Federal Ministry of Food and Agriculture (BMEL), for example, Rentenbank has considerably expanded its offering of special promotional loans in connection with the “Growth Alliance”-Boot Camp. “By participating in the ‘Growth Alliance’ programs, the start-ups to which we already provide financial support enhance their market prospects considerably. And the programs connect us, in turn, with additional, highly promising start-ups to which we can provide financial support”, said Nikola Steinbock, Chairwoman of Rentenbank’s Management Board, with regard to the holistic approach to promoting ag-tech and food-tech start-ups.


Euro remains the most important issue currency

To fund its promotional activity, Rentenbank raised EUR 8.2 billion (EUR 6.5 billion) in the capital markets by issuing bonds with terms of more than two years in the first half of 2022. Thus, the Bank has already achieved three quarters of the EUR 11 billion issue volume planned for 2022. The most important issue currency was the euro, the share of which rose to 70% (51%) of the total issue volume. This includes a 5-year bond for EUR 2 billion, Rentenbank’s largest euro area benchmark offering to date. The share of the US dollar fell to 12% (40%). Commercial banks are still the most important investors, accounting for 69% (50%) of the total issue volume. Rentenbank placed 15% (24%) of its bonds with central banks.


Lower operating result

The operating result before loan-loss provisions and valuation effects amounted to EUR 74.3 million in the first half of 2022, that being less than the corresponding figure for the first half of last year (EUR 94.1 million). The decrease resulted particularly from the higher level of interest rate subsidies granted in connection with Rentenbank’s special promotional loans, which led to lower net interest income. In addition, administrative expenses rose to EUR 45.6 million (EUR 42.6 million), primarily due to higher investments in IT systems.


Capital ratios remain at high levels

Rentenbank’s capital ratios calculated on the basis of the EU Capital Requirements Regulation (CRR) remained at high levels at the end of the first half of 2022. The Common Equity Tier 1 capital ratio came to 30.6% (31/12/2021: 31.8%) and the total capital ratio came to 30.7% (31/12/2021: 32.0%).

 

Key figures - first half 2022 (PDF)

 

Background:
Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Its promotional mandate covers not only agriculture and forestry, but also the entire food value chain, the increased use of energy from renewable sources, and the promotion of bio-economy solutions. Rentenbank attaches particular importance to the promotion of innovation, including research and development in universities, the early-stage financing of agriculture-related start-ups, and the market introduction and practical use of new technologies and products. Rentenbank’s promotional instruments are subsidies, subordinated loans, and special promotional loans. The special promotional loans are granted via the local banks of the ultimate borrowers on a competitively neutral basis. Rentenbank provides funding to banks, savings banks, and local authorities operating in rural areas. The Bank is a federal institution under public law whose capital stock was formed by contributions from the German agriculture and forestry sectors. It is subject to the German Banking Act (KWG) and is regulated by the Federal Financial Supervisory Authority (BaFin) and the Bundesbank. As one of the few triple-A rated institutions in Germany, Rentenbank raises funds in the capital markets.

This press release as PDF

Rentenbank: Satisfactory promotional activity in 2021, followed by a strong first quarter 2022

26 April 2022

- Especially strong increase in loan demand in the “Renewable Energy” and “Rural Development” promotional lines in the first three months of 2022


- More than half of the funding planned for 2022 was already raised at the end of March


- Capital ratios continue to be well above the regulatory requirements

 

Annual Report 2021

Frankfurt. Landwirtschaftliche Rentenbank experienced a sharp increase in demand for its promotional loans in the first three months of the current year. The volume of new low-interest special promotional loans reached approximately EUR 1.9 billion after EUR 1.3 billion in Q1 of the previous year. Rentenbank has already raised more than half of the funding planned for 2022 (EUR 11 billion), having placed medium- and long-term issues totalling EUR 6.3 billion in the first quarter of the year.

The volume of new special promotional loans granted in the “Agriculture” promotional line increased substantially in fiscal year 2021, mainly thanks to the “Agriculture Investment Programme” of the German Federal Ministry of Food and Agriculture (BMEL). The volume of new loans granted in the “Renewable Energy” promotional line also increased substantially as a result of strong demand for wind power financing. At EUR 9.8 billion, the total volume of new promotional loans was below the level of the previous year. The volume of new special promotional loans amounted to approximately EUR 5.6 billion.

 

Fiscal year 2021: Significantly higher loan commitments in the “Agriculture” promotional line

The volume of new loans granted in the “Agriculture” promotional line rose by 18% to EUR 2,452 million. This substantial increase is attributable to the BMEL’s “Agriculture Investment Programme”, which accounted for 16% of new loans in this promotional line. Machinery financing represented 38% or EUR 929.0 million, building financing 33% or EUR 813.7 million, and land financing 15% or EUR 366.3 million of the total new loans granted in the “Agriculture” promotional line in fiscal year 2021.

 

Substantial increase in wind power financing

There was also a sharp increase in the loans granted in the “Renewable Energy” promotional line, which rose by 21% to EUR 1,066 million. This increase is particularly attributable to the strong demand for wind power financing with fixed interest-rate periods of longer than 10 years. Wind power financing accounted for 64% or EUR 682.0 million of the new loans granted in this promotional line, followed by photovoltaics at 22% or EUR 230.7 million and biogas at 12% or EUR 127.4 million. The remaining 2% went to renewable raw materials.

 

Weaker demand in the “Agribusiness and Food” and “Rural Development” promotional lines

The volume of loans granted in the “Agribusiness and Food” promotional line declined to EUR 843 million in the past fiscal year, mainly due to lower machinery and operating resources financing. The demand of the federal states’ development banks for Rentenbank’s global loans also declined, reaching a volume of EUR 1,200 million. This typically volatile demand affected the development of the entire volume of new special promotional loans.

 

Sustainable investments accounted for one third of new special promotional loans

Rentenbank financed investments in environmental protection, animal welfare, and consumer protection in the total amount of EUR 823.3 million in 2021 (EUR 337.3 million). Including promotional loans for renewable energy in the amount of EUR 1.1 billion, the total amount of financing for sustainable projects came to EUR 1.9 billion (EUR 1.2 billion).

Sustainability is a key concern of Rentenbank. The Bank implemented several projects dealing with the opportunities and risks of ESG issues. The fundamental goal is to reduce sustainability risks and adverse impacts from the Bank’s business activity and operations. Rentenbank is also integrating sustainability into its business strategy to a greater degree, having issued sustainability guidelines and launched a concrete sustainability programme in 2021, accordingly.

“Public policy and society are accepting the challenges associated with the transformation to a climate-friendly economic and social system, which will demand great effort on the part of everyone involved. As an essential part of both the problem and the solution, agriculture plays a key role in climate and environmental protection”, said Nikola Steinbock, Speaker of Rentenbank’s Management Board. “Therefore, agriculture itself will change. However, this transformation can only succeed if it is driven, shaped, and also supported by society and politics”, she said. Nikola Steinbock added that Rentenbank is actively promoting and supporting this transformation.

 

Focus on the promotion of innovation and start-ups

Another way that Rentenbank supports sustainability is to facilitate the introduction of innovative and sustainable ideas to the market. Since July 2021, Rentenbank has promoted the early-stage financing of agriculture-related start-ups from the “Special-Purpose Fund of the Federal Republic of Germany” which is managed by Landwirtschaftliche Rentenbank. The promotion entails a low-interest subordinated loan for an amount of up to EUR 800,000 in combination with a grant for consulting services (Innovation Voucher). In the second half of the year, Rentenbank promoted three start-ups with subordinated loans totalling EUR 2.0 million and Innovation Vouchers totalling EUR 0.1 million from this Special-Purpose Fund.

In February 2022, Rentenbank participated in the European Circular Bioeconomy Fund (ECBF) to further speed up the pace of innovation while also developing and strengthening the bioeconomy and circular economy in agriculture and forestry.

 

Euro is the most important issue currency

In 2021, Rentenbank raised EUR 10.7 billion (EUR 11.4 billion) in the capital market. The most important funding instrument was the Euro Medium-Term Note Programme (EMTN Programme). The utilised programme capacity reached EUR 53.0 billion by the end of 2021 (EUR 51.8 billion). Total funds raised included Green Bonds in the amount of EUR 1.8 billion. “Green Bonds are an essential element of Rentenbank’s sustainability strategy. These funds support the expansion of the wind power portfolio, in which the volume of new loan commitments increased substantially in 2021”, Nikola Steinbock said.

The most important issue currency was the euro, which accounted for 62% (41%) of total issues, followed by the US dollar at 25% (47%). Commercial banks and central banks were still the most important investor group, together accounting for 74% (79%) of the total volume placed.

 

Total assets nearly unchanged

The Bank’s total assets amounted to EUR 95.5 billion as 31 December 2021 (EUR 95.3 billion). Because Rentenbank grants its loans in a competitively neutral way via other banks and savings banks, loans and advances to banks were the biggest line item of total assets, amounting to EUR 65.1 billion (EUR 61.8 billion).

The securitised liabilities amounting to EUR 82.6 billion (EUR 81.8 billion) were the biggest single item on the liabilities and equity side of the balance sheet. Medium Term Notes represented EUR 60.3 billion (EUR 58.9 billion), Euro Commercial Paper EUR 10.8 billion (EUR 9.5 billion), and global bonds EUR 11.1 billion (EUR 12.9 billion) of total securitised liabilities.

 

Lower operating result

Net interest income declined to EUR 285.7 million in 2021 (EUR 296.9 million). The technical process to pass through Rentenbank’s borrowing cost at negative yields was finalised by the middle of 2021. This allowed the Bank to increase the amount of interest rate grants compared to the previous year, which reduced net interest income. Administrative expenses rose to EUR 90.0 million (EUR 75.9 million). The increase resulted mainly from the administration of two German federal government programmes, rental expenses for the interim building, and the accelerated implementation of major IT projects. The operating result before loan loss provisions and valuation effects came to EUR 187.7 million (EUR 208.9 million). The cost-income ratio was 32.9% (28.2%).

Rentenbank allocated EUR 153.2 million (EUR 175.4 million) to its loan loss provisions. Net income rose from EUR 33.5 million in the previous year to EUR 34.5 million in 2021. After allocating EUR 17.2 million (EUR 16.7 million) to the principal reserve, the distributable profit, which Rentenbank also uses completely for promotional purposes, amounted to EUR 17.3 million, modestly higher than the previous-year figure (EUR 16.8 million).

 

Capital ratios continue to be well above the regulatory requirements

As 31 December 2021, Rentenbank’s capital ratios, which are calculated on the basis of the EU Capital Requirements Regulation (CRR), were modestly higher than in the previous year. The Common Equity Tier 1 capital ratio improved to 31.8% (31.0%). The total capital ratio rose to 32.0% (31.5%). “Our capital ratios continue to be well above the regulatory requirements. Therefore, we are able at all times to satisfy a growing financing need of the agribusiness industry and particularly to service any further investment programmes of the German federal government”, Nikola Steinbock concluded.

 

Key Figures 2021 (PDF)
Annual Report 2021 (PDF)

 

Background information:

Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Under its statutory mandate, Rentenbank promotes agriculture-related projects by granting low-interest rate loans via lending banks on a competitively neutral basis. Rentenbank provides funding to banks, savings banks and local authorities operating in rural areas. The utilisation of profits is also governed by the promotional mandate. The Bank is a federal institution under public law whose capital stock was formed by contributions from the German agriculture and forestry sectors. It is subject to the German Banking Act (KWG) and is regulated by the Federal Financial Supervisory Authority (BaFin) and the Bundesbank. As one of the few triple-A rated institutions in Germany, Rentenbank raises funds primarily in the capital markets.

 

This press release contains certain forward-looking statements that are based on current expectations, estimates, assumptions and projections of the Management Board and on the information currently available to it. These statements particularly include statements about our plans, strategies and prospects. Such forward-looking statements are identified by words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’ and similar expressions. These statements are not to be understood as guarantees of future performance; instead, they are dependent on factors that involve risks and uncertainties and are based on assumptions that may prove to be incorrect. Except where required by law, we assume no obligation to update forward-looking statements after the publication of the present press release.

 

 

 

This press release as PDF

Rentenbank in 2021: Strong growth in the Agriculture and Renewable Energy lines

31 January 2022

Frankfurt. 2021 was another good year for the promotional lending business of Landwirtschaftliche Rentenbank. New lending in the Agriculture and Renewable Energy lines increased sharply. In the Agriculture line, the increase was especially driven by the Agriculture Investment Programme of the German Federal Ministry of Food and Agriculture (BMEL), whereas the increase in the Renewable Energy line was driven by strong demand for wind power financing. Due to the uncertainty surrounding long-term investments in the sector, there was a slight decrease in the overall volume of new, low-interest special promotional loans, which came to EUR 5.6 billion (2020: EUR 6.0 billion). Capital ratios improved slightly from an already high level.

Rentenbank Schriftzug

Strong growth in the Agriculture and Renewable Energy lines

Again in 2021, the Agriculture line accounted for the largest share of new special promotional loans granted. New lending increased by 18.3% to EUR 2.5 billion (2020: EUR 2.1 billion). The strong growth was driven by the BMEL’s Agriculture Investment Programme. “We are very pleased with the strong demand because it shows the great willingness of agricultural enterprises to make a positive contribution to the protection of climate, environment and nature. We still see enormous potential in this area,” said Nikola Steinbock, Speaker of Rentenbank’s Management Board since the beginning of this year. The Renewable Energy line also saw dynamic growth, increasing by 21.4% to EUR 1.1 billion (2020: EUR 0.9 billion), thanks to strong demand for wind power financing.


Euro is the most important currency of issuance

To fund its promotional lending business, Rentenbank raised EUR 10.7 billion in medium- and long-term funds in the capital market in the 2021 financial year. This volume was somewhat less than in the previous year (2020: EUR 11.4 billion). The euro became the most important currency of issuance, accounting for 62% (2020: 41%) of the total issues, followed by the US dollar at 25% (2020: 47%). The most important investor groups are still commercial banks and central banks, together accounting for 74% (2020: 79%) of the total volume placed.


Lower operating profit

The operating profit before provision for loan losses and valuation came to EUR 187.7 million (2020: EUR 208.9 million). Net interest income declined to EUR 285.8 million (2020: EUR 296.9 million). Thanks to the technical option of passing on negative funding rates available since the middle of 2021, Rentenbank was able to extend a larger amount of interest rate grants compared to the previous year, which reduced the bank’s net interest income. Administrative expenses increased to EUR 90.0 million (2020: EUR 75.9 million). This increase is mainly attributable to the implementation of the German federal government programmes, as well as rental expenses for the interim building and the accelerated implementation of major IT projects. The cost/income ratio was 32.9% (2020: 28.2%).


Improved capital ratios

At the end of 2021, Rentenbank improved the capital ratios calculated on the basis of the EU Capital Requirements Regulation (CRR). The Common Equity Tier 1 capital ratio rose slightly to 31.8% (2020: 31.0%). The total capital ratio also rose slightly to 32.0% (2020: 31.5%). Both capital ratios are well above the regulatory requirements applicable to Rentenbank.

 

Key figures 2021 (PDF)

 

Background information
Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Under its statutory mandate, Rentenbank promotes agriculture-related projects by granting low-interest rate loans via lending banks on a competitively neutral basis. Rentenbank provides funding to banks, savings banks and local authorities operating in rural areas. The utilization of profits is also governed by the promotional mandate. The Bank is a German federal public law institution whose capital stock was formed by contributions paid by the German agriculture and forestry sectors. It is subject to the German Banking Act (KWG) and is regulated by the Federal Financial Supervisory Authority (BaFin) and the Bundesbank. As one of the few triple-A rated institutions in Germany, Rentenbank raises funds primarily in the capital markets.

This press release contains certain forward-looking statements that are based on current expectations, estimates, forecasts and projections of the Management Board and on the information currently available to it. These statements include, in particular, statements about our plans, strategies and prospects. Such forward-looking statements are identified by words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’ and similar expressions. These statements are not to be understood as guarantees of future performance; instead, they are dependent on factors that involve risks and uncertainties and are based on assumptions that may prove to be incorrect. Unless required by law, we assume no obligation to update forward-looking statements after the publication of the present press release.

 

 

This press release as PDF

News

Rentenbank Schriftzug

12 August 2022

Rentenbank: Strong increase in the volume of new special promotional loans granted in the first half of 2022

Annual Report 2021

26 April 2022

Rentenbank: Satisfactory promotional activity in 2021, followed by a strong first quarter 2022

Rentenbank Schriftzug

31 January 2022

Rentenbank in 2021: Strong growth in the Agriculture and Renewable Energy lines

press releases