News for Investors.

Social Responsibility – Not only a question of honour ....

up.dateMay 2004.

Available under: www.kfw.de/ Investor-Relations �Contact

2003 EnvironmentalReport of KfW

www.kfw.de/Investor-Relations �Download Area�All about the KfW group

Available under: www.kfw.de/ Investor-Relations �Contact

Carbon Fundwww.kfw.de/Investor-Relations �Socially Responsible Investors�KfW Carbon Fund

Available under: www.kfw.de/ Investor-Relations �Contact

The new SEC Report(18K) for the annualregistration of KfW inthe United States

www.kfw.de/Investor-Relations �Download Area �Prospectuses for KfW’s

securities

Development Cooperation

2002 Report on theCooperation with DevelopingCountries may be requestedunder (2003 Report will bepublished end of June): www.kfw.de/ InvestorRelations �Contact

www.kfw-entwicklungsbank.de/�English � Publications�Annual Reports

e.ditorial

Dear Reader,

On May 17 we held our Annual Press Con-ference on the balance-sheet figures of thefinancial year 2003. As usual we want toinform you about all important facts anddevelopments. To enable you to find back-ground information on our topics easily andquickly we have compiled links to our websitein a table. You can order printed copies of theindividual publications such as the currentAnnual Report. The list also covers the topicsdealt with in the following articles and tables.

We are frequently asked in which way KfWdeliberately supports the environment andsocial issues. Traditionally, environmentaland climate protection has been one focus ofKfW’s work. But in the social field we alsohave a lot to offer. The following article entitled“Social Responsibility” gives a brief overviewof our efforts to harmonise economic, ecolo-gical and social objectives.

In the first four months of the year we raisedfunds equivalent to EUR 24.1 billion in thecapital markets. This represents almost halfof the total volume of EUR 50 to 55 billionplanned for the year as a whole. In 2004 sofar, we have issued bonds and notes in 14different currencies, among them for the firsttime Hungarian forint and Singapore dollars.On the statistics page you will find a list of allborrowed funds broken down by currenciesand instruments. In our funding in British pounds (GBP) wehave seen a very positive development sincethe beginning of the year. With an issuancevolume equivalent to approximately EUR 2.5billion in the first four months of 2004 wehave clearly exceeded the total volumeraised in the same period last year. So wetake this as an occasion to present the GBPbond curve of KfW with volumes raised andmaturities. I hope that this edition of update, too, willoffer you interesting news and facts aboutour activities.

Gerhard LewarkTreasurer of KfW

KFW INTERNET LINKS.

Topic Printed VersionInternet Link

2003 Annual Report www.kfw.de/Investor-Relations �Download Area�All about the KfW group

Available under: www.kfw.de/ Investor-Relations �Contact

Press release on theAnnual Press Conference

www.kfw.de/Investor-Relations�News

Speech by the Chairmanof the Board ofManaging DirectorsHans W. Reich on theoccasion of the AnnualPress Conference

www.kfw.de�Press �Press Conferences

Current list of KfW bondsand notes listed andtraded on the Frankfurtand Luxembourg StockExchanges

Financing Programmes

www.kfw-foerderbank.de/�Englishwww.kfw-mittelstandsbank.de/�English

www.kfw.de/Investoren�Download Area�Listed securities

Report, which is published every three years.KfW Bankengruppe works very closely togetherwith the German federal government and othergovernment bodies and, in accordance with theUNEP Statement (United Nations EnvironmentProgramme), discloses the results of its environ-mental activities on a regular basis. The UNEPStatement is a voluntary undertaking by financialinstitutions on the environment and sustainabledevelopment.

Environmental protection in practice –KfW Bankengruppe as a pacesetter.The declared objective of KfW Bankengruppe inits business operations is to exceed the statutoryenvironmental standards and do even better.One example is the Ostarkade (Eastern Arcade),the new building at our Frankfurt headquarters,where the latest environmental technology wasused, especially to reduce energy and waterconsumption and to create an environmentallyfriendly room climate.

KfW Bankengruppe is currently working onthe development of a Carbon Fund, which isbased on the regulations laid down in the KyotoProtocol for the reduction of global CO2 emissions.From 2005 the Carbon Fund will trade in CO2

emission credit certificates, acting on behalf ofthe companies involved. Especially smallerenterprises, which cannot build on their ownknow-how in this area, will benefit. KfWBankengruppe, which can draw on decades ofexperience in the field of environmental protectionand has been committed also in financial terms,can make a positive contribution here. Theestablishment of the Carbon Fund is implementedin close cooperation with the competentgovernment departments.

KfW Bankengruppe and the FederalRepublic of Germany each hold a 50% stake inDeutsche Energie-Agentur (“dena”). KfW Banken-gruppe actively participates in the ongoing work,which aims at increasing the efficiency of energyconsumed and expanding the use of regenerativeenergies in Germany.

Social Responsibility – Not only a question of honour ...

Companies are frequently questioned about theethical principles by which they are governed.KfW Bankengruppe is no exception to this. Butit needs not fear comparison. On the contrary,both as a promotional bank and as an employerKfW already meets very strict criteria.

Priority areas of environmental protection andenvironmental compatibility in the lendingbusiness.KfW Bankengruppe can look back on a long tra-dition in the promotion of environmental projectsand investments. This is particularly reflected inthe domestic lending programmes. But in thefields of export and project finance and in thecooperation with developing countries, too,KfW Bankengruppe has permanently increasedthe volume of funds provided for environmentalprojects in the last few years. In the year 2002,KfW Bankengruppe supported projects pursuingenvironmental objectives with a total volume ofEUR 5.8 billion (not including DEG). With itsprogrammes and projects KfW Bankengruppeactively supports the environmental policy of theGerman federal government and the EuropeanUnion. Every project financing, especially incountries outside of the OECD, is subject to a com-prehensive environmental impact assessment. Forthis purpose, KfW Bankengruppe has developed itsown detailed guidelines, which cover and assessall foreseeable environmental effects of a project.It makes sure that all legal and official require-ments are met and, if possible, goes even furtherthan that. Promising environmental technologiesare being promoted in demonstration projects.

The focus of the business activities of KfWBankengruppe is on the promotion of renewableenergies. In all business areas, for instance exportand project finance, Financial Cooperation withdeveloping countries and investment finance inGermany and Europe, KfW Bankengruppe success-fully offers ways and means to promote climateprotection. In this way KfW Bankengruppemakes an important contribution to the sustain-able development in Germany and abroad. Theseactivities are documented in the Environmental

Social aspects of lending.Supporting the aim of sustainable developmentincreasingly has to take social objectives intoaccount. In its domestic financing business KfWBankengruppe offers several programmes in thisrespect, for instance the Programme for thePromotion of Home Ownership for Young Families,loans in the field of education (“Meister-Bafög”,which offers financial assistance for master crafts-men trainees) and the promotion of structurallyweak regions. In addition, there are many projectsin the field of development cooperation, which aimspecifically at improving the living conditions ofthe population in the developing countries. Thisincludes projects in the field of drinking watersupply and medical care, waste disposal, educationand the promotion of women and children indisadvantaged regions.

And what about social aspects insideKfW Bankengruppe?The “Gemeinnützige Hertie-Stiftung“ (HertieCharitable Foundation) developed the “Beruf &Familie” (Occupation and a Family) audit, whichpursues the aim of promoting a family-consciousstaff policy. In 2001 KfW Bankengruppeexpressly committed itself to this goal and wasawarded the basic certificate in May 2001.Since then an active policy of flexibilisation hasbeen pursued with regard to working time, wor-king place and staff development.

The “KfW Compass“ contains a list of socialobjectives, comprising aspects such a “fair play”and in-house communication. It gives an insightinto KfW and serves as a corporate model forthe approximately 3,600 staff of KfWBankengruppe.

At the beginning of 2004 KfW expandedits investor relations presence in the internet tocomprise a separate section entitled “SociallyResponsible Investors”. The information presentedin this section covers ecological and economicaspects and is continuously updated withcurrent facts.

Key words, for which you may find internet links in the above table, have been underlined!

Volume issued in 2004, by currencies1.1.-30.4.2004 (value date)

Currency In mio EUR In %

EUR 12.005 49.8USD 7.116 29.5GBP 2.519 10.5JPY 755 3.1AUD 747 3.1CHF 191 0.8SGD 165 0.7CAD 179 0.7NZD 136 0.6HUF 77 0.3HKD 60 0.2NOK 58 0.2SEK 54 0.2ZAR 23 0.1

Total 24.084 100.0

In mio EUR In % Transactions

Bonds 23.646 98.2 151 Of which:Private Placements 4.049 16.8 106Of which:Public Bonds 19.597 81.4 45

Of which:Benchmarks Bonds 10.362 43.0 3TargetedTransactions 9.235 38.3 42

Loans 438 1.8 4Of which:Schuldscheindarlehen 25 0.1 2CLS (Securitization) 413 1.7 2

Total 24.084 100.0 155

Volume issued in 2004, by instruments

Dec 04 Jun 06 Dec 08 Dec 10 Dec 15.Dec 06

KfW Sterling Bonds — Volume and Maturity Structure as per 30.04.2004

Volume 2004 in million GBP

Maturity

2004 VolumePer 2004 Volume

3000

2500

2000

1500

1000

500

0Aug 17 Jun 21 Dec 28 Jun 32 Jun 36Jun 25

1.1.-30.4.2004 (value date)

EWSTICKER + + + FROM THE NEWSTICKER + + + FROM THE NEWSTICKER + + + FR

KER + + + FROM THE NEWSTICKER + + + FROM THE NEWSTICKER + + + FROM

DYNAMIC DEVELOPMENT OF THEFINANCING VOLUME.

In the first quarter of 2004 KfW committed alto-gether EUR 9.7 billion to support investments inthe German and European economies. This wasan increase of 17% over the volume committedin the same period last year.

KFW MITTELSTANDSBANK(KFW SME BANK).

From January to March 2004 KfW Mittelstands-bank made new commitments of EUR 2.6 billion.This is a decrease of approximately 10% againstthe same period last year, which is mainly due tolower commitments for global loans and a lowernumber of securitisation transactions.

UNTERNEHMERKAPITAL - NEWMEZZANINE PRODUCT FAMILY

LAUNCHED. On March 1, 2004, KfW Mittelstandsbank launchedthe new mezzanine product family “Unterneh-merkapital” (entrepreneur capital). Under thisprogramme, KfW Mittelstandsbank for the firsttime offers comprehensive and standardizedsubordinated financing to business start-ups,young companies, but also to established SMEsand self-employed professionals. The economiceffect of mezzanine capital in the form of subor-dinated loans is similar to that of equity capital andimproves the financing structure of German SMEs.

KFW FÖRDERBANK(KFW PROMOTIONAL BANK).

KfW Förderbank focuses on investments in envi-ronmental and climate protection, the promotionof owner-occupied housing and housing moder-nisation, investments in municipal infrastructureand education. The volume of promotion of KfWFörderbank in the first three months of this yearwas EUR 7.1 billion, which is EUR 1.9 billion lessthan in the same period last year.

PROMOTION OF CLIMATE PROTECTIONIN THE HOUSING SECTOR CLEARLY

EXTENDED.In the first quarter of 2004 KfW Förderbankcommitted almost EUR 3 billion to promoteowner-occupied housing, the modernisation andrepair of housing and the reduction in CO2

emissions from residential buildings.

ROM THE

E

KfW BankengruppePalmengartenstraße 5-9, 60325 Frankfurt am Main

Phone +49 69 7431-0, Fax +49 69 7431-2944

www.kfw.de

Investor RelationsHorst Seissinger

Phone +49 69 7431-2222, Fax +49 69 7431-2193

E-Mail: investor.relations@kfw.de

Presseinfo Kapitalmarkt:Nathalie Drücke

Phone +49 69 7431-2098, Fax +49 69 7431-3266

E-Mail: nathalie.druecke@kfw.de

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