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Rentenbank Fiscal Year 2020

Rentenbank - scheduled funding volume 2021

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Germany's development agency for agribusiness and rural areas

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Promotional Activities

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

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Rentenbank - significant demand for promotional loans

28 April 2021

- New impetus from programmes for agriculture and forestry, instigated by the Federal Ministry of Food and Agriculture (BMEL)

- Green Bond Benchmark makes its debut

- Rentenbank enhances its resilience despite pandemic

Rentenbank Annual Report 2020

Frankfurt. Rentenbank saw sustained high demand for promotional loans in 2020. New business in low interest special promotional loans, which Rentenbank provides to end borrowers via their local banks on a competitively neutral basis (on-lending), remained steady at EUR 6.0 billion. Overall, Rentenbank increased its new promotional business by 3.5% to EUR 11.2 billion (EUR 10.8 billion in 2019; hereinafter, figures in brackets refer to the respective prior-year period or date). The development agency created momentum for sustainable investments by setting up two programmes for agriculture and forestry commissioned by the Federal Ministry of Food and Agriculture (BMEL). Promoting innovation also experienced significant growth.

‘Agribusiness is not only of systemic importance during times of crisis but also an important problem solver in our quest for a sustainable economy and society. We are providing the solid financial conditions in which much needed innovation and investment can be made,’ said Horst Reinhardt, Chairman of the Management Board at Rentenbank.

2020 fiscal year sees new business in special promotional loans remaining stable

With new business in special promotional loans of EUR 2.1 billion (EUR 2.2 billion), the Agriculture promotional line remained Rentenbank’s most important promotional line in 2020. While there was increased demand for funding for machinery, the demand for special promotional loans for buildings and land purchases slumped.

Rentenbank’s Rural Development promotional line experienced growth. New business here increased by 7.1% to EUR 1.9 billion (EUR 1.7 billion), as the federal states’ development banks (Landesförderinstitute) called for more global loans from Rentenbank. These loans are mainly used for financing infrastructure projects in rural areas.

New business in the Agribusiness promotional line reached EUR 1.1 billion (EUR 1.2 billion). While funding for machinery was in higher demand too in this line, the demand for special promotional loans for buildings and operational equipment lessened.

In the Renewable Energy promotional line, new business was steady at EUR 0.9 billion (EUR 0.9 billion). A greater demand for wind power financing compensated for a decline in loans for photovoltaic and biogas power plants.

Rentenbank launches BMEL programmes

In March 2020, Rentenbank opened its Liquidity Assistance Programme to support enterprises operating within agribusiness which had been adversely affected by the COVID-19 pandemic. From April 2020, Rentenbank has additionally been providing guaranteed liquidity assistance loans on behalf of the Federal Ministry of Food and Agriculture (BMEL). Overall, Rentenbank provided EUR 55.2 million in Liquidity Assistance loans (EUR 10.2 million). Rentenbank also started the ‘Grants towards Digitalisation and Technology for Sustainable Forestry Management’ programme on behalf of BMEL in November 2020. The aim is to maintain forests and make adjustments for climate change. ‘Through this programme, we are supporting a sector which is both suffering from climate change and making a major contribution to climate protection,’ said Horst Reinhardt.

Promoting Innovation expanded significantly

Within Promoting Innovation, the number of projects funded and the promotional volume increased significantly. In the year under review, Rentenbank supported 90 project partners with grants in the amount of EUR 24.1 million. In 2019, the Bank supported 61 project partners with EUR 14.4 million. Furthermore, it approved additional funds in the amount of EUR 2.7 million (EUR 0.6 million) for on-going projects which had been initiated in previous years.

Q1 2021: huge demand for BMEL Agriculture Programme

New business in the Agriculture, Forestry and Renewable Energy promotional lines performed very well in the first quarter of 2021. The two promotional programmes which Rentenbank is commissioned to implement by the BMEL provided for agriculture and forestry. There was a tremendous demand for the Agriculture Investment Programme which Rentenbank set up on behalf of the BMEL. The programme started in January 2021. A total of EUR 816 million is available for grants up to 2024. The aims are to promote more environmentally-friendly techniques for land cultivation, to protect the environment and climate and to improve biodiversity. The programme allows for a grant amounting up to 40% of the sum invested to be combined with a Rentenbank low-interest promotional loan to finance the remaining amount. In the first quarter of 2021, Rentenbank’s overall new business in low-interest promotional loans was at EUR 1.3 billion (EUR 1.6 billion), below the corresponding prior-year level. This drop was particularly due to typically volatile new business in the Rural Development line.

Launch of Rentenbank’s first Green Bond Benchmark attracts high demand

In order to fund its promotional loans, Rentenbank raised medium to long-term capital market funds in 2020 in the amount of EUR 11.4 billion (EUR 10.3 billion) on the capital markets. This comprises Rentenbank’s first public Green Bond in ‘benchmark’ format with an issuance volume of EUR 1.75 billion. It is backed by a loans portfolio in renewable energy which, at the point of issuance, comprised more than 2,000 wind power funding projects and around 21,500 photovoltaic projects. Rentenbank had previously issued Green Bonds as private placements.

In the first three months of 2021, Rentenbank raised EUR 4.8 billion in medium and long-term funds on the capital markets. This means that 44% of Rentenbank’s planned funding business has already been achieved for 2021.

Steady operating profit

Net interest income in 2020 was at EUR 296.9 million and thus around the prior-year level (EUR 300.6 million). This was despite the fact that DZ Bank did not pay a dividend, following the ECB’s recommendation to banks not to do so because of the uncertainty caused by the pandemic. Administrative expenses increased to EUR 75.9 million (EUR 72.9 million), primarily due to IT projects being expedited and increased personnel costs. Operating profit before provision for loan losses and valuation reached EUR 208.9 million, about the level of the previous year (EUR 210.1 million).

Rentenbank allocated EUR 175.4 million (EUR 177.6 million) to its contingency reserves. Net income increased from EUR 32.5 million to EUR 33.5 million. After allocating EUR 16.7 million to the principal reserve (Hauptrücklage), distributable profit, which Rentenbank also uses completely for promotional purposes, amounted to EUR 16.8 million, slightly above the previous year’s level of EUR 16.3 million.

Key indicators further improved

Rentenbank increased its Tier 1 capital ratio to 31.0% (30.1%) and the total capital ratio to 31.5% (31.1%) to year-end. ‘Despite the COVID-19 pandemic of 2020, we have made Rentenbank even more resilient. With a capital ratio of above 30%, a cost/income ratio of below 30% and a collateralisation ratio for our loans portfolio of over 90%, we were able to maintain the ‘perfect proportions’ of a development agency even in times of hardship,’ said Reinhardt in closing.

Key Figures 2020 (PDF)
Annual Report 2020 (PDF)

 

Background information:
Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Under its statutory promotional mandate, Rentenbank provides loans at favourable interest rates for agriculture-related investments via other banks on a competitively neutral basis. Rentenbank provides funding for banks, savings banks and local authorities operating in rural areas. The appropriation of profits is also subject to the promotional mandate. The Bank is a federal public law institution whose capital stock was formed by contributions paid by the German agricultural 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. The bank is one of the few triple-A rated institutions in Germany and raises funds primarily in the international capital markets.

This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of the Management Board and information currently available to it. These statements include, in particular, statements about our plans, strategies and prospects. Words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’ and similar expressions are intended to identify such forward-looking statements. These statements are not to be understood as guarantees of future performance, but rather as being dependent on factors that involve risks and uncertainties and are based on assumptions that may prove to be incorrect. Unless required by law, we shall not be required to update forward-looking statements after their publication.

 

This press release as PDF

Rentenbank and TechQuartier launch fourth bootcamp for startups in agribusiness

13 April 2021

Frankfurt. Rentenbank, Germany’s development agency for agribusiness and rural areas, and the Frankfurt-based innovation center TechQuartier are again hosting a 3-day bootcamp for startups. Applications can be submitted until 3 May 2021 at https://techquartier.com/rentenbank-bootcamp

Bootcamp der Rentenbank und des TechQuartier

The bootcamp is being held both online and on site in Frankfurt from 12 to 14 July 2021. The focus will be on sustainable innovations along the entire agribusiness value chain and is being expanded this year to include bio economy.

Workshops and one-on-one coaching sessions with experts from the fields of business, science and politics are all on the agenda. The workshop’s topics include growth strategies, teambuilding, data protection issues as well as techniques for negotiation, pitching and storytelling.

Applicants should meet the following criteria:

  • The business model contains innovative problem-solving techniques for AgTech, FoodTech or agricultural bioeconomy.
  • The business model is geared to providing products and services for other companies (i.e. B2B or B2B2C).
  • The commercial enterprise is located in Germany.

‘Promoting startups is a core element of our innovation strategy. The creativity behind new products and services allows agribusiness to be a troubleshooter for the important economic, social and ecological challenges we face. Our bootcamp offers technology-oriented startups an excellent platform from which to expand their business expertise and network,’ said Horst Reinhardt, Chairman of the Management Board at Rentenbank.

At the end of the bootcamp, the entrepreneurs will pitch their ideas to a live audience at an official ‘Demo Day’. The best pitches will win a cash prize. Previous years’ winners include:

  • Spoontainable makes edible dessert spoons from residual material from the food industry which replace disposable ones (first place in 2020).
  • Corvitac developed a camera system using AI technology to count pigs, for solving the problem of doing it manually and therefore inaccurately (second place in 2020).
  • Circular Carbon develops vegetable charcoal from recycled materials. They are a leading producer and supplier of biochar (third place in 2020)
  • BEEsharing is an online platform to help both beekeepers and farmers to arrange pollination by bees (winner in 2019).
  • Monitorfish works on real-time and early detection of fish diseases using artificial intelligence in aquaculture (winner in 2018).

Since 2018, 36 companies have taken part in the programme.  

‘We gained a great deal from the Bootcamp. We networked with startups from the agricultural sector, exchanged important personal experiences with other founders and mentors and presented our products to a wide specialist audience, which would otherwise never have become aware of us,’ said Markus Huhn, Managing Director of CORAmaps and participant on 2020’s bootcamp.

 


About:

Rentenbank
Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Under its statutory promotional mandate, Rentenbank provides loans at favourable interest rates for agriculture-related investments via other banks on a competitively neutral basis. Rentenbank provides funding for banks, savings banks, and local authorities with regard to rural areas. The appropriation of profits is also subject to the promotional mandate. The Bank is a federal public law institution whose capital stock was formed by contributions paid by the German agricultural 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. The bank is one of the few triple-A rated institutions in Germany and raises funds primarily in the international capital markets. www.rentenbank.com Press Contact: Christof Altmann, Tel.: +49 (0) 69 2107393, altmann@rentenbank.de

TechQuartier
FFounded in 2016 in Frankfurt, Europe’s financial center, TechQuartier is a cross-industry innovation platform created to bring startups, corporates and up-and-coming talent together to work, meet, learn and collaborate on new technologies and digital business models. Our member-based community numbers more than 370 startups, 50 academic and corporate innovators and hundreds of potential founders. With international educational programs in technology, artificial intelligence and entrepreneurship, we are teaching young minds to discover how they can shape their economic future. We are also paving the way towards a European-centric data-ecosystem, both as one of Germany’s largest innovation hubs and as a leader of the Financial Big Data Cluster. www.techquartier.com Press Contact: Marie Landenfeld, Tel: +49 (0) 69 90016050, landenfeld@techquartier.com

 

 

This press release as PDF

Fiscal Year 2020 – Strong promotional business for Rentenbank, fresh impetus for sustainable growth, enhanced resilience in the face of the COVID-19 pandemic

29 January 2021

Frankfurt. Rentenbank can look back at 2020 as a year of strong promotional business. Germany’s development agency for agribusiness and rural areas has increased its new promotional business to EUR 11.2 billion. Its new business in low interest special promotional loans achieved EUR 6 billion. Business in the Rural Development promotional line increased most markedly. Rentenbank created fresh impetus for sustainable growth through two programmes initiated by the Federal Ministry of Food and Agriculture for the agricultural and forestry sectors. Even during COVID-19 pandemic, exceptionally high capital and collateralisation ratios underline the Bank’s resilience.

Rentenbank Schriftzug

‘The pandemic has shown that a secure food supply is vital and that agriculture is key to safeguarding it,’ stressed Horst Reinhardt, Chairman of Rentenbank’s Management Board. He went on to say that agricultural and forestry sectors could, at the same time, make a crucial contribution to protecting the climate and environment with modern, innovative technology. ‘Businesses are ready to invest if the underlying conditions are right,’ he added. This was reflected in the huge demand for funds from the two promotional programmes initiated by the Federal Ministry of Food and Agriculture, according to Reinhardt.


New promotional business is growing

Rentenbank increased its overall new promotional business by 3.5% to EUR 11.2 billion (EUR 10.8 billion in 2019; hereinafter, figures in brackets refer to the respective prior-year period or date). Funding of local authorities and banks operating in rural areas through registered bonds, promissory notes and securities grew from EUR 4.8 billion to EUR 5.2 billion. New business in special promotional loans achieved EUR 6.0 billion as in 2019.


Farmers are buying more machinery

2020 saw the lion’s share of new business in special promotional loans go to the Agriculture line with EUR 2.1 billion (EUR 2.2 billion). Farmers called for more funding for machinery. By contrast, the demand for funding for buildings and land purchases slumped.


Increased demand for Liquidity Assistance, albeit at a moderate level

In March 2020, Rentenbank opened its Liquidity Assistance Programme to enterprises operating within agribusiness which had been adversely affected by the COVID-19 pandemic. From April 2020, Rentenbank has additionally been providing liquidity assistance loans guaranteed by the Federal Ministry of Food and Agriculture. In total, at EUR 55.2 million, Rentenbank provided significantly more Liquidity Assistance loans in 2020 than in 2019 (EUR 10.2 million). Nevertheless, the comparatively moderate level has also shown that broad sections of the agricultural and forestry sectors have coped better with the economic implications of the pandemic than initially feared.


Funding for infrastructure in rural areas has increased significantly

Rentenbank saw particularly strong growth in its Rural Development promotional line. New promotional business rose by well over 7% to EUR 1.9 billion. The federal states’ development banks called for more global loans from Rentenbank. They use these loans mainly for financing infrastructure projects in rural areas.

In the Agribusiness promotional line, Rentenbank targets enterprises operating upstream and downstream from agriculture. New promotional business amounted to EUR 1.1 billion (EUR 1.2 billion). There was an increased demand for funding for machinery whereas the demand for loans for buildings and operational equipment lessened.

New business in the Renewable Energy promotional line was steady at EUR 0.9 billion (EUR 0.9 billion). A greater demand for wind power financing contrasted with a decline in demand for photovoltaic and biogas power plants.

In the Forestry promotional line, which was set up in May 2019, new business amounted to EUR 76.5 million (EUR 25.0 million). EUR 52.3 million of this was allotted to loans as part of the Federal Ministry of Food and Agriculture’s Forest Management promotional programme.


US Dollar becomes most important currency of issuance

In the 2020 financial year, Rentenbank raised EUR 11.4 billion in funds on the capital market, an increase of 11% compared to the previous year (EUR 10.3 billion). The Bank agilely sought funding in various currencies in order to acquire the funds for its Promotional Business at as favourable a price as possible. This rendered the US dollar the most important currency of issuance at 47% (16%), followed by the euro at 41% (59%). The share of pound sterling (GBP) sank back to 5% (17%). Commercial banks and central banks jointly made up the most important group of  investors with 79% (82%) of the volume placed.


Stable operating profit, IT upgrade fast-tracked

Operating profit before provision for loan losses and valuation reached EUR 208.9 million, about the level of the previous year (EUR 210.1 million). Net interest income dropped slightly by 1.2% to EUR 296.9 million (EUR 300.6 million), mainly due to DZ Bank withholding its dividend. DZ Bank has fallen in line with the ECB’s urgent recommendation to banks to refrain from distributing dividends in light of the Covid-19 pandemic. Administrative expenses increased by 4.1% to EUR 75.9 million (EUR 72.9 million), primarily due to major IT projects being expedited and increased personnel costs.


Capital ratios increased, resilience enhanced

At the end of the 2020 financial year, Rentenbank increased its Common Equity Tier 1 capital ratio in accordance with CRR to 31.0% (30.1%).

‘With our reinforced capital base, a loan portfolio collateralisation ratio of over 90% and a cost/income ratio of under 30%, we kept our banking operations running highly efficiently while at the same time further increasing our resilience in defiance of the pandemic. This makes Rentenbank more crisis-proof than ever before,’ said Reinhardt in closing.

 

Key figures 2020 (PDF)

 

Background information:
Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Under its statutory promotional mandate, Rentenbank provides loans at favourable interest rates for agriculture-related investments via other banks on a competitively neutral basis. Rentenbank provides funding for banks, savings banks and local authorities operating in rural areas. The appropriation of profits is also subject to the promotional mandate. The Bank is a federal public law institution whose capital stock was formed by contributions paid by the German agricultural 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. The bank is one of the few triple-A rated institutions in Germany and raises funds primarily in the international capital markets.

This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of the Management Board and information currently available to it. These statements include, in particular, statements about our plans, strategies and prospects. Words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’ and similar expressions are intended to identify such forward-looking statements. These statements are not to be understood as guarantees of future performance, but rather as being dependent on factors that involve risks and uncertainties and are based on assumptions that may prove to be incorrect. Unless required by law, we shall not be required to update forward-looking statements after their publication.

 

This press release as PDF

News

Rentenbank Annual Report 2020

28 April 2021

Rentenbank - significant demand for promotional loans

Bootcamp der Rentenbank und des TechQuartier

13 April 2021

Rentenbank and TechQuartier launch fourth bootcamp for startups in agribusiness

Rentenbank Schriftzug

29 January 2021

Fiscal Year 2020 – Strong promotional business for Rentenbank, fresh impetus for sustainable growth, enhanced resilience in the face of the COVID-19 pandemic

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