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Rentenbank in 2023: Very good operating result, challenging year for promotional activity

23 April 2024

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.

Bilanzpressekonferenz 2024

“It is more important than ever that agricultural enterprises invest in their future. Based on our promotional lending numbers, however, we are seeing the opposite: tremendous investment restraint. This is primarily attributable to the prevailing sense of uncertainty in the agricultural sector, as shown by the survey results of our Agriculture Barometer“, said Nikola Steinbock, Chairwoman of Rentenbank’s Management Board. “Government officials, industry associations and banks must now come together with a sense of urgency to establish the conditions for the success of the required transformation. It will also take a combination of private and public capital to create the right incentives. As a promotional bank, Rentenbank was founded for this purpose 75 years ago. And thanks to our excellent capital base, we believe that we are ideally equipped to fulfil this role“, Nikola Steinbock continued.

Lower volume of new promotional loans
The investment restraint of agricultural enterprises is also reflected in Rentenbank’s promotional lending activity. The volume of new, low-interest promotional loans granted in all promotional lines declined by 13.6 % to EUR 5.9 billion (2022: EUR 6.9 billion). The sharpest declines in new lending volumes were registered in the Agriculture, Renewable Energy, and Agribusiness and Food promotional lines. Rentenbank’s promotional lending activity in these segments was dampened above all by a lack of investment in farm buildings and machinery, as well as lower demand for wind power financing. By contrast, the volume of new loans granted in the Rural Development promotional line rose again thanks to strong demand for Rentenbank’s global loans by the development banks of the German federal states.

Rentenbank is expanding its future-focused portfolio of promotional instruments to bolster the resilience of the agricultural sector and stimulate necessary investments.

More than EUR 400 million committed via the Investment and Future Programme for Agriculture
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 subsidies to promote environmentally friendly and climate-friendly business practices. To date, the bank has approved more than EUR 400 million in subsidies under this programme, which will expire in the current year.

Expansion of the programme “Future Areas in Focus”
Rentenbank launched the lending programme “Future Areas in Focus”, which features additionally subsidised terms, in 2022 to incentivise agricultural enterprises to invest in climate and environmental protection projects. In the past year, Rentenbank added two more future areas to this programme, which had originally targeted four such areas. The programme particularly aims to promote investments in efficient irrigation systems and to promote the independence of young female farm successors and start-up founders in agriculture and forestry. A seventh future area, “Rebuilding Stalls to Improve Animal Welfare”, was added in late March of this year. In this area, Rentenbank supports agricultural enterprises wishing to rebuild their stalls to improve the welfare of their farm animals. 

Granting of subordinated loans to start-up founders
As part of its efforts to promote innovation, Rentenbank provides early-stage financing in the form of subordinated loans to agriculture-related start-ups on behalf of the German Federal Ministry of Food and Agriculture. The bank granted subordinated loans totalling EUR 4.4 million in the past year. Previously supported start-ups have developed an impressively diverse array of urgently needed innovations for the agricultural sector, the food industry and bioeconomy.

Technical concept for the classification of greenhouse gas emissions when lending to agricultural borrowers
Rentenbank published its technical concept for the classification of greenhouse gas emissions when lending to agricultural borrowers at the start of this year. It is an aid to help lenders register or estimate the level of greenhouse gas emissions and the resulting transition risks. This technical concept can help improve the risk class of agricultural borrowers by enabling them to more accurately report their actual performance and risks. The primary component of this technical concept is a questionnaire. The technical concept was developed in collaboration with industry associations, food and agribusiness organisations, and representatives of the lending banks.

Similar volume of funds raised in the capital market as in the previous year
To fund its promotional lending activity, Rentenbank raised EUR 10.5 billion in medium- and long-term funds in the capital market in 2023 (2022: EUR 11.8 billion). This figure includes a euro benchmark bond with a volume of EUR 1.5 billion and a term of 7.5 years. Rentenbank also issued a 10-year euro benchmark bond as a green bond with a volume of EUR 1.0 billion and two US-dollar benchmark bonds totalling USD 2.25 billion.

Substantially higher operating result, higher net income
The operating result before provisions for loan losses and valuation effects amounted to EUR 197.3 million in 2023, that being substantially higher than the previous year’s operating result. Net interest income came to EUR 310.0 million (2022: EUR 268.8 million). This solid performance is particularly attributable to very good results in the Promotional Lending segment due to the lower amount of interest subsidies granted for special promotional loans, and to the favourable development of interest rates. Administrative expenses were modestly higher at EUR 113.6 million (2022: EUR 112.5 million) due to higher IT investments.

The positive operating result added EUR 84.8 million to the bank’s capital base. Net income rose from EUR 36.0 million to EUR 37.0 million. After EUR 18.5 million was allocated to the principal reserve (2022: EUR 18.0 million), Rentenbank’s distributable profit, which is likewise used entirely for promotional purposes, came to EUR 18.5 million, that being slightly higher than the previous year’s distributable profit (EUR 18.0 million).

Capital ratios nearly unchanged
As of December 31, 2023, the Common Equity Tier 1 Ratio was 31.3% (2022: 31.7%) and the Leverage Ratio was 10.3% (2022: 10.4%). Thus, both ratios remain well above the regulatory minimum requirements applicable to Rentenbank.

Rentenbank’s CFO, Dr. Marc Kaninke, concluded the following assessment of the bank’s results and balance sheet structure: “Rentenbank is beginning the year 2024 from a position of strength. Our income benefitted from the higher level of interest rates and our costs were about the same as in the previous year. We can comfortably master the challenges presented by the regulatory and market environment. To ensure that we can fulfil our promotional mandate even more efficiently in the future, we will use our strong operating result mainly to invest further in the modernisation of our IT landscape and the digitalisation of our processes”.

First quarter 2024: Slow start to the current reporting year
Rentenbank has gotten off to a slow start in the 2024 reporting year. The total volume of new promotional business granted in the first quarter amounted to EUR 2.2 billion. Rentenbank raised EUR 4.7 billion in medium- and long-term funds in the capital market through mid-April 2024.

“We see a need for substantial investments in a number of areas, including the renovation of livestock housing, the further expansion of renewable energy, climate protection and biodiversity. And there are many enterprises in the food and agribusiness sector that want to make such investments. We know this from our direct conversations with them and from the surveys conducted for our Agriculture Barometer. However, it remains difficult to make such investments happen“, said Nikola Steinbock with a view to the future. “This investment restraint can be attributed to a confluence of obstacles such as the currently inverted yield curve, regulatory requirements, and the geopolitical environment. And we cannot yet offer definitive answers to this tremendous complexity“, Nikola Steinbock continued. “However, we are doing everything we can to dispel the uncertainties plaguing the food and agribusiness sector and create the conditions for getting the necessary investments done. We are holding intensive discussions with our stakeholders and we are continually adapting our portfolio of promotional instruments for this purpose“.

More detailed information is provided in the 2023 annual report which can be found on Rentenbank’s homepage.

Key figures 2023 (PDF)


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 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.