Economic position

Financial performance

The Bank’s financial performance is presented in the table below:

	1/1/ to 31/12/2025 mEUR	1/1/ to 31/12/2024 mEUR	Change mEUR
Net interest income1	228.8	287.5	- 58.7
Net commission income	- 4.6	- 4.7	0.1
Administrative expenses	146.2	130.8	15.4
Other operating result	10.3	11.3	- 1.0
Income taxes / other taxes	1.7	1.7	0.1
Operating result before loan loss provisions and valuation effects	86.6	161.6	- 75.0
Loan loss provisions and valuation effects	47.6	123.6	- 76.0
Net income for the year	39.0	38.0	1.0

Operating result before loan loss provisions and valuation effects

The operating result before loan loss provisions and valuation amounted to EUR 86.6 million. It was therefore significantly below the previous year’s level (EUR 161.6 million). The year-on-year decline was attributable primarily to a higher promotional contribution and thus lower income in the “Promotional Activity” segment. In addition, administrative expenses increased.

Net interest income

Net interest income by segment:

	1/1/ to 31/12/2025 mEUR	1/1/ to 31/12/2024 mEUR	Change mEUR
Net interest income
Promotional Activity	128.6	195.0	- 66.4
Capital Investment	88.5	75.6	12.9
Treasury Management	11.7	16.9	- 5.2
Total net interest income	228.8	287.5	- 58.7

Net interest income in the “Promotional Activity” segment amounted to EUR 128.6 million and was therefore significantly below the previous year’s level (EUR 195.0 million). As the volume of special promotional loans increased significantly compared with the previous year, more grants were once again granted, which had an adverse effect on net interest income. In addition, the higher issuance volume, combined with a declining funding margin, had a negative impact on results.

In the “Capital Investment” segment, net interest income was slightly above our planning and increased by 17% year on year to EUR 88.5 million. This was due not only to the additional income from the higher investment volume resulting from the new allocation, but also to reinvestment yields that were above the yields on maturing investments.

Net interest income in the “Treasury Management” segment, at EUR 11.7 million, was below the previous year’s figure of EUR 16.9 million. The 2025 financial year was marked by a continued narrowing of margins in the money market business, which had a corresponding adverse effect on results.

Administrative expenses

Administrative expenses increased by 12% to EUR 146.2 million (EUR 130.8 million). This was due primarily to an increase of EUR 9.2 million in personnel expenses. At the same time, other operating expenses rose by EUR 3.9 million and depreciation, amortisation and impairments by EUR 2.3 million.

The increase in personnel expenses was attributable mainly to an average increase of 22 employees (as defined in Section 267 (5) of the German Commercial Code [Handelsgesetzbuch; HGB]), as well as to collectively agreed pay increases and higher pension expenses (special effect in 2024 due to a reduced inflation assumption).

The increase in other operating expenses resulted primarily from the continued implementation of the IT roadmap and from targeted investment in the IT landscape.

Depreciation, amortisation and impairments of intangible assets as well as property and equipment rose to EUR 16.5 million (EUR 14.2 million), due in particular to higher amortisation of software.

Other operating result

Other operating result declined from EUR 11.3 million to EUR 10.3 million. This was due mainly to lower reimbursements of costs arising from the settlement of the federal programmes.

Loan loss provisions / valuation effects

Under “Loan loss provisions / valuation effects”, a net amount of EUR 47.8 million was used to increase the contingency reserve. Of this amount, EUR 22.8m was allocated to the fund for general banking risks.

Net income for the year / distributable profit

Net income for the year increased from EUR 38.0 million to EUR 39.0 million in the financial year under review.

Subject to the approval of the Supervisory Board, a total of EUR 19.5 million (EUR 19.0 million) from net income for the year was allocated to the principal reserve in the preparation of the annual financial statements.

After the allocation to the principal reserve, distributable profit amounted to EUR 19.5 million, slightly above the previous year’s level (EUR 19.0 million). Distributable profit is to be allocated in equal parts to the Federal Government’s Special-Purpose Fund at Rentenbank and to Rentenbank’s Promotional Fund.

Net assets and financial position

Rentenbank’s net assets and financial position as presented in the annual financial statements are as follows:

Changes in significant asset items

	31 December 2025 mEUR	31 December 2024 mEUR	Change mEUR
Loans and advances to banks	57,827.5	65,615.4	- 7,787.9
Loans and advances to customers	7,100.8	7,003.2	97.6
Bonds and other fixed-income securities	18,949.0	16,742.6	2,206.4

Loans and advances to banks amounted to EUR 57.8 billion at the year-end reporting date (EUR 65.6 billion). Their share of total assets was 63.9% and was lower than in the previous year. However, they continued to represent the largest asset class. The decline in loans and advances to banks was attributable mainly to a reduction in money market business. In addition, the stock of special promotional loans declined slightly. In the 2025 financial year, new business involving special promotional loans increased significantly. As a substantial portion of the committed funds has not yet been drawn down, the stock of special promotional loans is expected to rise again in 2026 as these commitments are utilised, thereby offsetting the current decline.

Loans and advances to customers consist primarily of promissory notes issued by the federal states and municipalities. Overall, this balance sheet item increased slightly year on year by EUR 0.1 billion to EUR 7.1 billion.

At the year-end reporting date, the stock of bonds and other fixed-income securities had increased by EUR 2.2 billion year on year to EUR 18.9 billion. As in the previous year, the entire stock was classified as fixed assets.

Changes in key items of liabilities and equity

	31 December 2025 mEUR	31 December 2024 mEUR	Change mEUR
Liabilities
Liabilities to banks	814.3	1,528.3	- 714.0
Liabilities to customers	1,497.4	1,490.4	7.0
Securitised liabilities	80,523.4	83,752.3	- 3,228.9
Total	82,835.1	86,771.0	- 3,935.9
Equity (including the fund for general banking risks)
Subscribed capital	135.0	135.0	0.0
Retained earnings	1,272.1	1,252.6	19.5
Distributable profit	19.5	19.0	0.5
Fund for general banking risks	3,576.3	3,553.5	22.8
Total	5,002.9	4,960.1	42.8

Liabilities

Liabilities to banks, at EUR 0.8 billion, were EUR 0.7 billion below the previous year’s level. The decline in outstanding amounts was attributable mainly to the maturity of global loans totalling EUR 0.5 billion. In addition, liabilities to customers, at EUR 1.5 billion, remained at the previous year’s level.

Securitised liabilities declined by EUR 3.2 billion, or 3.9%, to EUR 80.5 billion. At EUR 63.7 billion, the Medium-Term Note (MTN) programmes remained the most important source of funding and increased by EUR 2.2 billion compared with the previous year. The stock of outstanding Euro Commercial Paper (ECP) issuances declined to EUR 3.7 billion (EUR 7.0 billion). Likewise, the stock of outstanding global bonds decreased to EUR 12.6 billion (EUR 14.8 billion).

Equity

Equity, including the fund for general banking risks pursuant to section 340g HGB, increased by EUR 42.8 million to EUR 5,002.9 million. Net income for the year of EUR 39.0 million was allocated in equal parts to retained earnings and recognised as distributable profit, respectively. The fund for general banking risks was increased by EUR 22.8 million.

Regulatory capital ratios

The total capital ratio and the Common Equity Tier 1 capital ratio both stood at 32.6% (38.3%). They reflect Rentenbank’s strong capital base even upon initial application of CRR III and continue to remain well above the regulatory minimum requirements.

For the amount and development of regulatory own funds and risk-weighted assets (RWA), please refer to the “Risk-bearing capacity” section.

Capital expenditures

In the year under review, capital expenditures continued to focus on modernising the IT landscape, in particular replacing the proprietary host-based core banking system. In this context, major milestones were successfully achieved through implementations in SAP and Murex. In addition, further implementation measures were launched. Substantial funds were also invested in implementing regulatory requirements and enhancing IT security.

The funding portal introduced in December 2020 as part of the Federal Forestry Programme was further optimised, and the internal IT systems were integrated.

To further digitalise processes, additional bots were developed to handle routine tasks in application processing and thereby contribute to greater efficiency.

Aside from modernising the IT landscape, Rentenbank is investing in the energy-efficient refurbishment of the listed building at its Hochstrasse site in Frankfurt am Main.

Liquidity

The Federal Republic of Germany bears institutional responsibility for Rentenbank and has assumed liability for Rentenbank’s obligations (refinancing guarantee).

On the basis of the resulting AAA ratings, liquidity can be raised in the market without difficulty. The high volume of debt securities eligible for refinancing with Deutsche Bundesbank constitutes an additional liquidity reserve. For further details, please refer to the presentation of liquidity risks in the risk report forming part of this management report.

Overall assessment of business development and economic position

The Management Board considers business development and the development of Rentenbank’s net assets, financial position and results of operations to have been solid overall, albeit below expectations. This also applies to the financial and non-financial key performance indicators defined in the “Management system” section.