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KfW Lifts 2025 Domestic Support for Housing and SMEs as Profit Falls

The state lender signals a push to steer Germany’s transition through targeted loans.

Overview

  • KfW reported its 2025 results Friday and said domestic loans and grants rose by about one third to €61 billion.
  • Financing for small and mid-sized firms and start-ups jumped more than 75% to roughly €23.5 billion compared with 2024.
  • Demand was strongest for climate-friendly new builds and heating upgrades after the government revived EH55 new-build support in December, with new business reaching €11.7 billion by February 2026.
  • Net profit fell to €1.0 billion from €1.4 billion as a weaker US dollar reduced the euro value of overseas lending and management cited geopolitical volatility.
  • The bank plans to cut more than ten housing programs to two later this year to simplify access, as ministries rework heating rules that experts say create uncertainty for owners and installers.