Navigation and service of the Landwirtschaftlichen Rentenbank

jump directly to:

Cookies make our services easier.
With the use of these services you are accepting that we use cookies.

more information



We create ideal growth conditions

Fiscal Year 2018

Rentenbank expects 2019 funding volume of up to EUR 11 billion

Investor Presentation

 

Germany's development agency for agribusiness and rural areas

Promotional Activities

read more

Fiscal Year 2018: Sluggish wind power financings trigger lower demand for promotional loans from Rentenbank

February 1, 2019

Frankfurt. In 2018, Landwirtschaftliche Rentenbank saw falling demand for its special promotional loans, albeit from the high level registered in the previous year. This decrease was attributable to a sharp decline in wind power financings set off by an amendment to the German Renewable Energy Sources Act. The decline could only partially be compensated for by growth in the Agribusiness and Rural Development promotional lines. New business in the Agriculture promotional line remained largely stable. Overall, new business with special promotional loans from Germany's development agency for agribusiness and rural areas dropped to a total of EUR 6.7 billion (2017: EUR 7.4 billion).

View 3

Promotional business for machinery increased

At EUR 2.1 billion (2017: EUR 2.2 billion), the Agriculture promotional line accounted for the largest share of the total new business in special promotional loans in 2018. While the demand for financing of machinery rose, the demand for financing of buildings and land declined.

As a result of the extreme weather events in 2018, demand for liquidity assistance loans rose to EUR 30.8 million (2017: EUR 11.2 million). "Many enterprises were hit hard by the extreme weather conditions last year. We opened our Liquidity Assistance program in June 2018 in order to help them cope with liquidity shortages. However, these shortages often take a while to materialize, which is why the program will remain open for applications until at least December 2019," said Horst Reinhardt, Chairman of the Management Board of Rentenbank.

Rentenbank’s Agribusiness promotional line is geared towards companies in agricultural upstream and downstream industries. New business continued to grow and amounted to EUR 1.2 billion (2017: EUR 1.1 billion) in 2018. Just as in the Agriculture promotional line, the financing needs for machinery increased significantly.

The demand for special promotional loans in the Rural Development promotional line increased as well. In 2018, new promotional loans amounted to almost EUR 2.0 billion (2017: EUR 1.8 billion). One reason was the higher demand for global loans from the promotional institutions of the federal states, which are used in particular to finance infrastructure measures in rural areas.

The demand for loans in the Renewable Energy promotional line declined, however, drastically. After new promotional business had risen sharply to EUR 2.4 billion in 2017, it accounted for only EUR 1.4 billion in 2018. This was mainly due to changes in the German Renewable Energy Sources Act and the associated substantial decline in financing of wind power. By contrast, the demand for the financing of photovoltaic installations more than doubled. The demand for promotional loans for biogas plants also rose significantly.

Slight increase in promotional contributions

In 2018, Rentenbank used EUR 63.2 million from its own income to reduce interest rates of its special promotional loans. Rentenbank also used all of the distributable profit of EUR 15.8 million for promotional purposes. In addition, EUR 5.0 million was allocated to the Research on Agricultural Innovation program. Including other promotional items, Rentenbank’s overall promotional contributions totaled EUR 84.2 million (2017: EUR 83.4 million) in 2018.

Euro Medium Term Notes once again most important funding instrument

Rentenbank raised capital market funds of EUR 11.3 billion (2017: EUR 12.4 billion) with maturities of more than two years in 2018. As in the previous year, the euro was the most important issuance currency with a share of 54 % followed by the US dollar with 24 %. 83 % of Rentenbank’s issues were placed with foreign investors. With a share of 39 %, commercial banks were the most important investor group. The Euro Medium Term Note program contributed EUR 9.7 billion (2017: EUR 9.4 billion) or 86 % to the total funding amount. Rentenbank continues to benefit from its excellent market access in all maturities.

Reduced operating profit

The preliminary operating result before provision for loan losses and valuation was down by 7.5 % to EUR 207.1 million (2017: EUR 223.8 million). This was partly due to the 3.4 % reduction in net interest income to EUR 295.1 million (2017: EUR 305.6 million). The prolonged low-interest-rate environment had a negative impact on the asset margins as well as on the returns achievable on the investments of Rentenbank's own funds. Administrative expenses rose by 3.6 % to EUR 71.8 million (2017: EUR 69.3 million), mainly because of increased expenses for personnel and in connection with banking supervision.

After provision for loan losses and valuation as well as allocation to reserves, the Management Board expects to report net income of EUR 63.0 million for 2018 (2017: EUR 61.0 million).

Total assets almost unchanged – capital ratios increased

As at December 31, 2018, total assets amounting to EUR 90.2 billion remained almost unchanged compared to end of 2017 (EUR 90.8 billion). However, Rentenbank increased its capital ratios pursuant to the EU's CRR banking regulation again. The Tier 1 capital ratio rose to 29.7 % end of 2018 (end-2017: 27.8 %) and the total capital ratio to 31.2 % (end-2017: 29.7 %). The ratios thus remained well above the regulatory requirements for Rentenbank.

Key figures 2018

 

Service:

Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Under its statutory promotional mandate, the bank extends low-interest loans for agriculture-related investments via local banks on a competitively neutral basis. Rentenbank provides funding for banks, savings banks, and local authorities related to rural areas. The appropriation of profits is also subject to the promotional mandate. The bank is a public law institution whose capital stock was formed by contributions paid by the German agricultural and forestry sectors. The bank is one of the few triple-A rated institutions in Germany and raises funds in the 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 obligated to update forward-looking statements after their publication.

This Press Release as PDF

Rentenbank expects 2019 funding volume of up to EUR 11 billion

December 7, 2018

Frankfurt. Landwirtschaftliche Rentenbank expects a total issuance of up to EUR 11 billion with maturities of more than two years in 2019.

© Romolo Tavani / Fotolia

Germany’s development agency for agribusiness and rural areas plans to raise up to 40 % of its medium and long-term funding via benchmark bonds, with a minimum volume of EUR 1 billion or USD 1 billion each. The funding program will be complemented by other liquid issues and private placements in various currencies, especially in euros, US dollars, pound sterling, and Australian dollars.

In the year to date, Rentenbank has raised around EUR 11.2 billion in the capital markets, including two EUR benchmarks with maturities of 5 and 7 years, respectively. The bank also issued a 5-year USD global bond. The average maturity of the issues decreased to 6.2 years (2017: 8.4 years). The bank’s overall borrowing costs remained favorable, measured in terms of margin against 6-month Euribor.

“Due to the phasing out of the ECB’s asset purchase program in 2019, medium and long-term refinancing costs for euro bonds are expected to rise. This may affect the composition of our funding mix”, said Horst Reinhardt, Spokesman of Rentenbank’s Board of Managing Directors, responsible for treasury business.

Rentenbank raised funding in eight different currencies. While the share of EUR-denominated issues declined marginally to 54 % (2017: 57 %), the share of USD increased, accounting for 25 % of medium and long-term funding (2017: 19 %). Sterling issuance saw a slight increase to 9 % (2017: 7 %). Bond issues under the Kangaroo program decreased to 5 % (2017: 10 %).

Under the EMTN program, Rentenbank raised additional funds of approximately EUR 2.0 billion with maturities of less than two years. In this context, a USD bond with a volume of USD 2.0 billion and a maturity of almost two years was of particular interest to investors.

Under its Euro Commercial Paper (ECP) program, Rentenbank issued debt securities with maturities of up to 364 days in eight different currencies. With a share of 91 %, USD remained the program’s largest source of funding. As in the previous year, the average utilization of the ECP program amounted to EUR 7.8 billion.

 

Service:

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

This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of the Board of Managing Directors 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 obligated to update forward-looking statements after their publication.

 

This press release as PDF

Rentenbank: Promotional loans for machinery and buildings particularly in demand, wind energy financing faces headwinds

August 23, 2018

First half of 2018

Frankfurt. In the first half of 2018, Landwirtschaftliche Rentenbank extended low-interest special promotional loans of EUR 3.3 billion (H1 2017: EUR 3.6 billion). The decline was almost entirely attributable to a lower volume of wind turbine financing. In contrast, Germany’s development agency for agribusiness and rural areas saw growth in its Agribusiness and Rural Development promotional lines.

View 3

“With our promotional activities, we support agribusiness and rural areas. Both are crucial to the balanced development of the German economy and society at large,” said Horst Reinhardt, Spokesman of Rentenbank’s Board of Managing Directors.

Slight decline in new promotional business

In the first half of 2018, new business in the Agriculture promotional line decreased by 5% to EUR 1.0 billion. While demand for machinery loans grew to EUR 288 million (H1 2017: EUR 279 million), the volume of financing for buildings remained nearly flat at EUR 377 million (H1 2017: EUR 380 million). In contrast, land financing dropped to EUR 237 million (H1 2017: EUR 271 million).

In the Agribusiness promotional line, new business increased significantly by 44% to EUR 637 million (H1 2017: EUR 443 million), mostly propelled by stronger demand for loans for machinery and buildings.

New business in the Rural Development promotional line was also considerably above the prior-year level, amounting to EUR 803 million (H1 2017: EUR 533 million). This was driven by higher demand from the promotional banks of the federal states for Rentenbank’s global loans, which are primarily used to finance rural infrastructure.

In contrast, new business in the Renewable Energy promotional line decreased as expected, dropping to EUR 669 million (H1 2017: EUR 1,481 million). Changes in the German Renewable Energy Sources Act (EEG) led to a significant decline in demand, especially for wind energy financing. New business of EUR 270 million (H1 2017: EUR 1,241 million) amounted to only about 22% of the volume achieved in the first half of 2017.

Compared with the first half of 2017, total new promotional business decreased by roughly 22% to EUR 5.2 billion. In addition to special promotional loans, this also includes funding for banks, savings banks, and local authorities related to rural areas through registered bonds, promissory notes, and securities.

EUR remains the major issuance currency

To refinance its promotional business, Rentenbank raised EUR 7.8 billion with maturities of more than two years in the capital markets in the first half of 2018 (H1 2017: EUR 7.2 billion). The funding volume thus covered more than two-thirds of the planned EUR 11 billion target for 2018. EUR remained the largest source of funding, continuing to account for 63% of total issuance. It was followed by USD and AUD, representing 22% (H1 2017: 12%) and 6% (H1 2017: 11%) of the funding volume, respectively. With a share of 37% (H1 2017: 43%), commercial banks remained the main investors, followed by central banks with a share of 31% (H1 2017: 41%).

Total assets virtually unchanged

Total assets stood at EUR 90.2 billion at the end of June 2018, almost reaching the level recorded at year-end 2017 (December 31, 2017: EUR 90.8 billion). Loans and advances to banks, including cash and balances with central banks, rose to EUR 60.8 billion (December 31, 2017: EUR 60.6 billion), accounting for 67% (December 31, 2017: 67%) of total assets. Securitized liabilities of EUR 76.1 billion (December 31, 2017: EUR 76.9 billion) were the largest item on the liability and equity side of the balance sheet, representing a share of 84% (December 31, 2017: 85%). Equity (excluding interim net income), including the fund for general banking risks, amounted to EUR 4,430.1 million as of June 30, 2018. It was thus EUR 15.3 million or 0.3% lower than at year-end 2017, attributable to the distribution of the bank’s net profit for 2017.

Earnings remain satisfactory

The operating profit before provision for loan losses and valuation amounted to EUR 104.1 million in the first half of 2018, down 7.5% compared with the corresponding figure in the first half of 2017 (EUR 112.5 million).

Net interest income decreased by 4.3% to EUR 146.2 million (H1 2017: EUR 152.8 million). This was mainly due to a decline in net interest income in the Capital Investment segment since the reinvestment rates of maturing own funds investments no longer achieved the level of returns generated by the previous investments. Administrative expenses increased slightly by 1.5% to EUR 34.6 million, driven primarily by higher expenses for personnel and banking supervision.

Interim net income of EUR 104.4 million (H1 2017: EUR 188.4 million) showed a significant year-on-year decline, since the corresponding figure in the first half of 2017 had been marked by positive one-off effects of EUR 75.9 million.

Further increase in capital ratios

Compared to year-end 2017, Rentenbank’s capital ratios in accordance with the Capital Requirements Regulation (CRR) continued to increase moderately in the first half of 2018. The tier 1 capital ratio strengthened to 28.4% (December 31, 2017: 27.8%) and the total capital ratio increased to 30.0% (December 31, 2017: 29.7%). Both ratios were thus well in excess of the regulatory requirements applicable to Rentenbank.

Key figures – first half of 2018

 

Service:

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

This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of the Board of Managing Directors 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 obligated to update forward-looking statements after their publication.

This press release as PDF

News

press releases