Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for KfW (issuer and senior unsecured debt ratings: AAA/Stable; short-term issuer ratings: S-1+/Stable) on 25 March 2025.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on www.scoperatings.com. 

Key rating factors

The AAA rating of KfW is equalised with the AAA/Stable sovereign credit rating of the Federal Republic of Germany. This reflects the explicit, unconditional, unlimited, statutory, direct and irrevocable guarantee of the Federal Republic of Germany for all existing and future obligations of KfW in respect of money borrowed, bonds and notes issued, and derivative transactions entered into by KfW, as well as obligations of third parties that are expressly guaranteed by KfW.

Scope further acknowledges the mature and very supportive legal framework of the bank, stipulated in the Law Concerning KfW (KfW law), which makes changes to KfW’s business model or guarantee structure unlikely. KfW’s public legal status as a public law institution (Anstalt des öffentlichen Rechts) legally exempts it from insolvency procedures, in line with most other German state development banks. In addition, the bank benefits from a liability support mechanism in the form of a maintenance obligation by the Federal Republic under the principle of Anstaltslast.

KfW’s AAA/Stable rating also benefits from the bank’s strong fundamentals, including its robust capitalisation with a CET 1 ratio of 30.2% and sustained profitability, solid asset quality, excellent liquidity profile and capital market access across multiple funding currencies supported by the bank’s widely diversified investor base.

KfW is the largest German government development agency and one of the largest SSA issuers in Europe with a funding programme of around EUR 65-70bn in 2025. Under the direction of the Federal Finance Ministry and within a mandate set by law, KfW plays a critical part in implementing Germany’s economic policy. This includes its role in financing public investments and supporting economic development at the regional and local levels by providing low-interest loans and/or grants for priority areas such as infrastructure, schools, hospitals, public transport, social housing, and digitalisation. The bank is also instrumental in coordinating and providing crisis support to municipalities and businesses, for example during the Covid-19 pandemic, and cooperates closely with state-owned development banks to provide additional funding and credit lines.

The Stable Outlook reflects Scope’s view that risks to the ratings are balanced over the next 12 to 18 months.

Downside scenarios for the rating and Outlooks are (individually or collectively):

1. Downgrade of the Federal Republic of Germany;
    
2. Changes in KfW’s legal framework or guarantee structure that notably weaken government support for KfW.

The methodologies applicable for the reviewed ratings and/or rating Outlooks (Government Related Entities Rating Methodology, 10 December 2024 and Financial Institutions Rating Methodology, 10 January 2025) are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst Eiko Sievert, Senior Director

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