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Rentenbank: Promotional activity impacted by persistent investment restraint
Frankfurt. Compared to the first half of last year, demand for the special promotional loans of Landwirtschaftliche Rentenbank was considerably weaker in the first half of 2024. At EUR 1.5 billion, the volume of new loans granted was a little less than 50% of the year-ago figure. While investment restraint was evident in nearly all the bank’s promotional lines, the greatest declines were registered in its Rural Development and Renewable Energy lines. The demand for credit was dampened both by the sector’s pessimistic expectations for the future and by the currently high level of the EU reference interest rate. Rentenbank raised EUR 4.9 billion in the capital markets to fund its promotional activity. The operating result of Germany’s development agency for agribusiness and rural areas in the first half of 2024 was below the level of the year-ago period. The bank’s capital ratio and leverage ratio remained at high levels.
Rentenbank in 2023: Very good operating result, challenging year for promotional activity
Frankfurt. Landwirtschaftliche Rentenbank encountered lower demand for its special promotional loans in 2023. The volume of new, low-interest promotional loans declined by 13.6% to EUR 5.9 billion (2022: EUR 6.9 billion). The investment restraint exhibited by potential borrowers was confirmed by the findings of the Rentenbank Agriculture Barometer, which provides insights into the current situation and expectations of the German agricultural sector. Rentenbank expanded its portfolio of promotional activities to bolster the sector’s resilience and stimulate necessary investments. It is also developing additional measures to support the necessary transition of the food and agribusiness industry to more sustainable business models and practices. To fund its promotional activities, Rentenbank raised EUR 10.5 billion (2022: EUR 11.8 billion) in medium- and long-term funds in the capital market. The bank’s operating result before provisions for loan losses and valuation effects came to EUR 197.3 million in 2023, well above the level of the previous year (2022: EUR 157.8 million). The bank’s capital ratios remain at very good levels.
Rentenbank in 2023: Lower volume of new loans granted, substantially higher operating result
Frankfurt. 2023 was a challenging year for Landwirtschaftliche Rentenbank. The volume of new promotional loans declined by 13.6% to EUR 5.9 billion (2022: EUR 6.9 billion). Declines were registered in all promotional lines, but they were especially pronounced in the Agriculture and Renewable Energy lines, where promotional lending activity was dampened particularly by a lack of investment in farm buildings and machinery and by weakening demand for wind power financing. However, the volume of new loans granted in the Rural Development line rose again thanks to strong demand for Rentenbank’s global loans by the development banks of the German federal states. To fund its promotional lending business, Rentenbank raised approximately EUR 10.5 billion (2022: EUR 11.8 billion) in medium- and long-term funds in the capital market. The bank’s operating result before provisions for loan losses and valuation effects came to EUR 197.3 million, well above the level of the previous year (EUR 157.8 million), mainly due to higher net interest income on the back of rising interest rates. The bank’s capital ratios were nearly unchanged from the previous year.
