Düsseldorf/Münster, March 17, 2010. In the crisis year 2009, NRW.BANK supported North Rhine-Westphalia’s mid-market with customised products and comprehensive advisory services, although small and medium-sized companies postponed major investments. As a result, the promotion business increased by seven percent to 78,650 commitments, while the volume declined by 12.7 percent against the previous year to just under EUR 8 billion. But the North Rhine-Westphalian is picking up steam. Since the fourth quarter of 2009, the new business volume has been characterised by a clear upward trend. This was reported by NRW.BANK at today’s press conference in Düsseldorf.

Demand for promotion products in the crisis year 2009 primarily focused on liquidity assistance and working capital loans for small and medium-sized companies in North Rhine-Westphalia, a business segment that is characterised by relatively small volumes. At approx. EUR 7.9 billion, new business was down by 12.7 percent on the boom year 2008 (EUR 9.1 billion). There was a massive slump primarily in the first half of the year, when the promotion business was down roughly 30 percent below the prior year level.

In response to the increased information requirements of businesses and start-ups resulting from the crisis, the range of advisory services for NRW.BANK’s promotion products was expanded significantly. In the course of the year, some 10,200 calls were received by the newly established helpdesk (0211/91741 4800), More than 110 events were organised in the context of the joint Counselling Days with the Chambers of Industry, Commerce and Trade. A special Financial Advisory unit provides competition-neutral advice on managing and preventing the crisis.

“In the difficult environment of the economic and financial crisis, NRW.BANK was challenged to cushion the economic downturn with the help of customised promotion products and advisory services and to provide stimulation for an upswing,” said Dietmar P. Binkowska, Chairman of the Managing Board.

About the individual business fields:
The new business volume in the Start-up and SME Promotion unit declined sharply. At EUR 2.4 billion, the commitment volume was down by almost 20 percent on the previous year’s EUR 3 billion. The decline is primarily attributable to the cyclically induced slump in the “NRW.BANK.Mittelstandskredit”, the flagship among the Bank’s promotion products. Commitments amounted to only EUR 850 million, which represents a decline by 45 percent against 2008, as SMEs postponed major investments in machinery and equipment. Growth was recorded primarily by the “crisis-adjusted” promotion products. They offer working capital loans and liability releases for the (savings) banks. Commitments for the new “NRW.BANK.Konjunkturkredit”, which was introduced in 2009, amounted to EUR 48.6 million, while an amount of EUR 210 million was committed under the “NRW.BANK.Universalkredit” (up 11 percent on the previous year).

In the field of Municipal and Infrastructure Finance, the new business volume reached just under EUR 2.7 billion, down approx. 22 percent on the previous year. Here, too, the trend towards low volume promotion was felt – while the volume declined, the number of commitments (925) remained almost unchanged at the prior year level (-1.1 percent). 
Individual financing of infrastructure measures increased markedly to EUR 570 million (previous year: EUR 408 million; +39.8 percent). A focus was on the social sector.

At EUR 1.7 billion, new business in the field of Individual Promotion was down by 1.4 percent on the previous year. Demand for the Tuition Fee Loan remains high. More than 85,000 borrowers in North Rhine-Westphalia finance their tuition fees with the help of NRW.BANK, which is equivalent to 22 percent of the North Rhine-Westphalian students liable to pay tuition fees and eligible to receive lending. The first students entered the repayment phase in the 2009/2010 winter term. Over 44 percent were exempted from the repayment obligation under applicable laws.

Another highly popular loan is the “NRW/EU.Mikrodarlehen”. Between the start of the pilot project in October 2008 and the end of last year, just under 230 loans in a total amount of EUR 4.7 million were committed. Almost 360 jobs have been created. 

In the context of the housing programmes of KfW Bankengruppe, NRW.BANK extended EUR 1.4 billion (previous year: EUR 1.2 billion). The main focus was on energy efficiency measures for existing buildings.

Strong growth was reported by the Social Housing Promotion unit. Commitments, which had increased already in 2008, rose even further to EUR 1.1 billion in 2009. This represented an increase of 20.4 percent on the previous year. The increased promotion volume acts like an economic stimulus package for the construction sector, as each euro that is granted entails private investments that are several times as high. Rental housing construction made a particularly strong contribution. The increase in the commitment volume in this segment is primarily attributable to the strong growth in the number of commitments and to the Bank’s focus on responding to the needs of regions with high rental levels. 

In the past year, NRW.BANK used EUR 21.4 million (previous year: EUR 32.9 million) of its own earnings, the “promotion dividend”, to make the conditions of its development programmes even more attractive. Net income for the year after taxes and promotion dividend rose to EUR 170.8 million (previous year: EUR 32.4 million). The increase is primarily attributable to the fact that risk provisions declined against the previous year (EUR 196.1 million; -28.2 percent). Back in 2008, the Bank had established provisions for anticipated losses for potential risks resulting from the financial market crisis. These provisions were reduced significantly in the past fiscal year. 

Most of the net income for the year was allocated to the capital reserve and the reserve from retained earnings. The core capital ratio stood at just under 12 percent.

In the meantime, the North Rhine-Westphalian economy has begun to pick up steam, with the fourth quarter marking the turning point. At approx. EUR 2.9 billion, the volume of development funds was up by an impressive 31 percent on the fourth quarter of 2008 (EUR 2.2 billion).