DEG: Successful 2016 financial year

DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, a subsidiary of KfW Group, presents a successful balance sheet total for the 2016 financial year. It provided financing totalling approx. EUR 1.6 billion for companies in developing and emerging-market countries (2015: EUR 1.1 billion). DEG’s portfolio grew to EUR 8.6 billion and, at the same time, generated a very positive result. The operating result before risk provision thus amounted to EUR 259.2 million (2015: EUR 244.8 million). Major contributing factors were, in particular, dividend earnings and earnings from the disposal of assets, such as the sale of DEG shares in the Kenyan I&M Bank – a DEG customer since 2007, which has developed very successfully.

Net retained profit of around EUR 100 million strengthens equity

Net risk provision was made amounting to EUR 136.8 million (2015: EUR 127.9 million) to respond to the economic environment. Annual net income before taxes rose to EUR 111.3 million (2015: EUR 101.3 million) and the balance sheet profit to EUR 99.8 million (2015: EUR 86.5 million).

“Our commitment facilitates investments that are successful both from a business and developmental perspective. They help create qualified jobs and prospects for local populations,” said Bruno Wenn, Chair of DEG’s Management Board. DEG’s new business in 2016 facilitates entrepreneurial investments with a volume totalling EUR 6.6 billion (2015: EUR 5.7 billion).

Good result increases promotional potential

As in previous years, the balance sheet profit will be transferred to the retained earnings with a view to strengthening DEG's equity and its promotional potential. With an equity ratio of 41.0 per cent, DEG retains adequate risk-bearing capacity.

Financing reaches 600,000 SMEs

A core issue for DEG is financing small and medium-sized enterprises as a key driver for development. “The latest analysis shows that we reach around 600,000 small and medium-sized enterprises, over half of which are in Africa. This in turn creates income and jobs,” emphasised DEG Chairman of the Management Board, Wenn.

Decent and fair work is one of the five outcome categories of the new assessment and control instrument “Development Effectiveness Rating (DERa)”, which DEG introduced on 1 January 2017. It records which contributions DEG customers make to development and shows the changes that occur through DEG’s investment. Further categories oriented towards the SDGs are local income, development of markets and sectors, doing business in an environmentally-friendly way and benefit for local communities.

In the light of market conditions characterised by economic momentum in developing countries and global insecurities, DEG expects to generate new business amounting to EUR 1.6 billion in 2017.