“High prices, growing uncertainty, and labour shortages are only some of the challenges faced by agriculture. At Rentenbank, we offer solutions to these challenges and help agricultural enterprises make the necessary investments to ensure their competitiveness”, said Nikola Steinbock, Chairwoman of Rentenbank’s Management Board. “Again last year, our strong offering of promotional solutions supported the agriculture sector in an extremely challenging environment marked by the high EU base rate and significant investment restraint.”
Strong impact of new promotional activities
Rentenbank granted new promotional loans totalling EUR 3.6 billion in 2024 (PY: EUR 6.1 billion). The volume of new promotional loans granted across all promotional lines declined by 41.1%. The declines were most pronounced in the Agribusiness and Food, Renewable Energy, and Rural Development promotional lines, mainly as a result of the high EU base rate and pull-forward effects in the previous year. When the EU base rate is high, promotional banks can only issue unsubsidised loans at high interest rates or absorb a high level of subsidies.
In the grant-awarding mandate business conducted on behalf of the German federal government, the ANK NABO grant programme was launched in July 2024. Acting on behalf of the German Federal Environment Ministry, Rentenbank approves grants for investments that preserve the ability of soil to store CO2 and promote biodiversity. Under the ANK NABO programme, 222 applications were received and EUR 7.7 million in grants were approved in 2024.
Another highly successful grant programme of the German federal government was concluded in 2024. Under the Investment and Future Programme for Agriculture sponsored by the German Federal Ministry of Food and Agriculture, which was set up in 2021, Rentenbank offered investment grants to promote environmentally friendly and climate-friendly business practices. Under this programme, which ended in 2024, Rentenbank approved more than EUR 500 million in grants.
In the area of promotional lending activity, greater emphasis was placed on two topics of pressing importance for agricultural enterprises, which are described in the following.
EUR 290 million for livestock stalls
Rentenbank granted promotional loans totalling EUR 290 million to help farmers convert their livestock stalls and build new ones in 2024. That was EUR 60 million more than in the previous year. These loans funded investments in nearly 20 percent more cattle stalls, 30 percent more pig pens, and greater than 45 percent more poultry houses. Of the EUR 290 million total, around EUR 40 million in promotional loans were granted in the area of future development called “Rebuilding Stalls to Improve Animal Welfare”, for which premium terms can be granted.
Promotion of farm successors
Rentenbank supported young farmers with loan commitments totalling EUR 472.7 million in 2024. And in the area of future development called “Female Farm Successors and Start-up Founders”, EUR 16.7 million in promotional loans were granted to support women who take over an existing farm or start a new farm. Under these programmes, Rentenbank helped young people modernise their farms and guide them to a successful future.
Climate strategy published
Rentenbank published its Climate Strategy at the start of this year. This report highlights ways in which the industry as a whole and agricultural enterprises in particular can reduce their CO2 footprints by making sensible investments in innovative solutions so that they remain broadly eligible for financing in the future. The bank will also strive to further reduce its own operational emissions (building, motor vehicles, etc.).
Climate bonus to begin in 2025
One such investment that serves to reduce the CO2 footprint of agricultural enterprises is the compilation of a climate assessment. Beginning in July 2025, Rentenbank will award grants to help them prepare such climate assessments. The grant amount is EUR 1,000 or no more than 90% of the cost. In the course of the year Rentenbank will also offer a climate bonus in the form of an interest bonus on investments made by enterprises that can present such a CO2 assessment.
Nikola Steinbock: “To manage anything, it must first be measurable. That is why we will help farmers prepare a climate assessment for their farm. That way, they will know where and how they can reduce CO2 emissions and how this can be integrated into the farm’s business activities.” Steinbock continued by saying that “Our climate assessment grant is one of many examples of the diverse forms of promotional assistance we provide in addition to issuing conventional promotional loans and grants on behalf of the German federal government.”
Bond issuance adapted to lower volume of promotional lending
To fund its promotional activities, Rentenbank raised EUR 8.2 billion in medium- and long-term funds in the capital market in 2024 (2023: EUR 10.5 billion). These figures include a Rentenbank euro benchmark bond with a volume of EUR 1.25 billion and a term of 7 years. We also issued a US dollar benchmark bond with a volume of USD 1.5 billion and a term of 5 years and a eurodollar bond with a volume of USD 950 million and a term of 7 years.
Strong operating result, slightly higher net income
At EUR 161.6 million, the operating result before provisions for loan losses and valuation effects remained at a high level in 2024 (2023: EUR 197.3 million). Net interest income came to EUR 287.5 million (2023: EUR 310.0 million). Administrative expenses rose to EUR 130.8 million (2023: EUR 113.6 million) due to higher IT investments and personnel expenses. The positive operating result added EUR 143 million to the bank’s capital base. Net income rose from EUR 37.0 million in 2023 to EUR 38.0 million in 2024. After allocating EUR 19.0 million (2023: EUR 18.5 million) to the principal reserve, Rentenbank’s distributable profit, which is likewise used entirely for promotional purposes, came to EUR 19.0 million, that being slightly higher than the previous year’s distributable profit (EUR 18.5 million).
Capital ratios and Leverage Ratio well above requirements
As of 31 December 2024, the Common Equity Tier 1 capital ratio was 38.3% (2023: 31.3%) and the Leverage Ratio was 10.2% (2023: 10.3%). Thus, both ratios are still well above the regulatory minimum requirements applicable to Rentenbank.
“Like the agriculture sector, we too must take steps to make us strong and fit for the future. That is why we are investing in modern IT systems and bright minds. This is the only way we can meet the needs of our customers and the rising demands for IT security, continually expand our portfolio of promotional solutions, and fulfil our promotional mandate. Thanks to our solid results and strong balance sheet, we can do this from a position of strength”, said CFO Dr. Marc Kaninke in his assessment of the bank’s operating results and balance sheet structure.
First quarter 2025: Sharp increase in promotional activity
Rentenbank has gotten off to a strong start in 2025. We granted new promotional loans totalling EUR 1.5 billion in the first quarter. During this period, Rentenbank raised EUR 4.3 billion in medium- and long-term funds in the capital market.
“Agricultural enterprises have stepped up their investments and we at Rentenbank are funding them. In the area of renewable energy, the EU base interest has proved to be an absolute game changer, as expected. Now that it has fallen, we can offer loans at better terms and borrowers are taking them. Aside from the base interest rate, the mood in the agriculture sector has brightened as well. We are sensing more courage and confidence. Our Rentenbank Agriculture Barometer shows improved sentiment both in the assessment of the current situation and in the outlook for the future. And just as one would expect, this positive outlook is affecting present conditions, particularly in the form of a renewed willingness to invest. The positive sentiment is already reflected in our numbers for the first quarter, and we will see that continue in the further course of the year,” said Nikola Steinbock in her assessment of the future outlook.
Detailed information can be found in the published Annual Report 2024.
Key figures 2024
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 lending 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 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.
