//NRW.BANK: State Development Bank of NorthRhine-Westphalia

Approx. EUR 3.3 billion in promotion funds for the private and public sectors in NRW

NRW.BANK’s volume of promotion funds rises 48% by the end of September

Düsseldorf/Münster, November 7, 2006. The volume of promotion funds granted by NRW.BANK has increased strongly. In the first nine months of 2006, the development and municipal bank of the State of North Rhine-Westphalia made available funds in an amount of just under EUR 3.3 billion to the private and public sectors, up 48% on the same period of the previous year. “I am grateful to say that this expansion was facilitated both by the pick-up in economic activity and by the fact that NRW.BANK’s products are carefully tailored to actual and current needs,“ said Dr. Ulrich Schröder, Chairman of the Managing Board of NRW.BANK. At EUR 818.4 million, the NRW.BANK.Mittelstandskredit loan, which was launched last year and provides start-ups and SMEs with low-cost promotion funds, was the single most important product. The Bank boosted its net income before income tax and before own revenues used to subsidise promotion programmes (promotion dividend) by 17.2% to EUR 86.9 million.

Of the total promotion volume in an amount of EUR 3,280.7 million (2005: EUR 2,214.0 million, +48%),
- EUR 1,265.4 million (2005: EUR 722.1 million, +75.3%) was made available for the promotion of business start-ups and SMEs
- EUR 273.5 million (2005: EUR 235.7 million, +16.0%) for municipal and infrastructure finance
- EUR 1,348.8 million (2005: EUR 882.9 million, +52.8%) for individual promotion
- EUR 393.0 million (2005: EUR 373.5 million, +5.2%) for social housing promotion.
In addition, NRW.BANK provided the local authorities with long-term and short-term funding in an amount of EUR 855 million and EUR 992.2 million, respectively. As the development bank of the federal state, it is NRW.BANK’s statutory mission to support local authorities’ financing efforts. Working with NRW.BANK offers municipalities three major advantages: low-cost funding, the combination of financing and promotion as well as structured finance expertise.

The single most important product for the promotion of business start-ups and SMEs was the new NRW.BANK.Mittelstandskredit loan, whose commitment volume of EUR 818.4 million exceeded the Bank’s expectations. “We project the commitment volume for the Mittelstandskredit SME loan alone to reach EUR 1.1 billion by the end of the year,” said Ulrich Schröder. The SME loan provides business start-ups and companies in North Rhine-Westphalia with straightforward funding at very low interest rates to support their investments and working capital requirements. To offer an attractive interest rate, NRW.BANK relies on the KfW-Unternehmerkredit as a low-cost funding base and uses its own funds to further reduce the interest rate.

In the Municipal and Infrastructure Finance sector, NRW.BANK committed EUR 101.3 million (2005: EUR 120.5 million, -15.9%) under the “sustainable and ecological water management initiative” programme, which expired at the end of 2005. A new “sewage water” investment programme is being prepared by the North Rhine-Westphalian government. Demand for the new KfW programmes “Kommunal/Sozial Investieren” (municipal/social investment) was also strong, resulting in a total commitment volume in excess of EUR 133.2 million.

The Individual Promotion sector saw solid demand for the tuition fee loan. In its capacity as the state development bank, NRW.BANK ensures that straightforward, low-cost and socially compatible funding is available to students in North Rhine-Westphalia. By the end of Oktober, NRW.BANK had received 3,200 applications for the loan launched in June 2006. 18 of the 33 state universities will introduce a tuition fee for first-time students as of the 2006/2007 winter term.
With a commitment volume of approx. EUR 1.3 billion, the housing programmes of KfW Bankengruppe account for the biggest portion of the promotion funds in the Individual Promotion sector.

The commitment volume in the Social Housing Promotion sector rose to EUR 393.0 million (2005: EUR 373.5 million, +5.2%), of which EUR 322.3 million alone were granted for owner-occupied housing (2005: EUR 285.2 million, +13%). The increase reflects the higher promotion rates for applications filed from the year 2006 as well as the enlarged group of eligible applicants.

Increase in Net Income before Income Tax and Promotion Dividend
At the end of September, net income before income tax and promotion dividend was up 17.2% on the same period of the previous year to EUR 86.9 million (2005: EUR 69.7 million). The promotion dividend, i.e. the Bank’s own revenues used to subsidise its promotion programmes, rose to EUR 20.8 million. Net income after income tax and promotion dividend amounted to EUR 60.1 million (2005: EUR 63.6 million, -3.5%). At EUR 131.6 billion, total assets were up 2.7% on year-end 2005.