Wirtschafts- und Infrastrukturbank Hessen (WIBank) looks after the financial side of the State of Hesse’s public and infrastructure development activities. It plays an important role in supporting sustainable development in Hesse and keeping the state fit for the future. An economically and organisationally independent but legally dependent institution within Helaba, it works impartially with all bank and customer groups. WIBank employs measures including separate posting groups and the use of a distinct logo to ensure compliance with the European Commission’s strict rules on the separation of commercial bank and development bank functions. It covers the whole of Hesse from offices in Offenbach, Kassel, Wetzlar and Wiesbaden.
WIBank aims to improve quality of life for residents of the state of Hesse and to help make the state a more attractive place to live and do business. The competence centre for monetary development assistance in Hesse, it concentrates on actively supporting structural change and prioritises sustainability in all of its development activities. New business in 2016 was down year on year as expected, but WIBank nevertheless increased its net income for the year significantly thanks largely to one-off effects. Margins contracted as a result of the persistently low level of interest rates.
WIBank favours integrated cross-sector development approaches to realising structural change in areas such as digitalisation. It is a co-founder of the new TechQuartier in Frankfurt am Main (a hub for the growing community of young financial technology companies or fintechs), a role it took on to help encourage companies to settle in the area and to support community-building, and is also supporting the digital transformation in Hesse by helping to fund the necessary infrastructure (broadband networks, for example) and assisting innovative companies. It is adapting its own IT and sales support processes too to make sure that it can continue to meet customer requirements.
WIBank’s role as competence centre for monetary development assistance in Hesse involves it supporting and advising the state, in particular, in relation to the development of efficient financing solutions and development programmes to banking standards. It offers a competitive range of development products, which it adapts dynamically to keep pace with relevant economic and social challenges. The product range is backed up by comprehensive high-quality counselling for customers seeking development assistance.
WIBank follows a conservative business model based on two main pillars: development loans business and service business. The development loans business pillar brings together all development transactions that should in principle generate a return, which in practice means loans, equity investments and revolving funds. WIBank’s activities on behalf of higher-level administrative authorities fall under the service business pillar. These are based on long-term agreements (for example the European Structural Funds and European agricultural development subsidies) and involve off-balance-sheet subsidies as the primary financial instrument. WIBank conducts its operations through four different business divisions – Build & Live, Train & Employ, Create & Grow and Sustain & Modernise – making optimal use of the entire palette of available public development instruments to achieve the public development objectives.
Build & Live
The persistently favourable market conditions for financing dampened demand for the Build & Live business division. The Bank did though manage to increase new business, largely thanks to subsidies granted in urban development and under the regional aircraft noise abatement fund. Loans for the construction of housing for rental and new products such as the public authority investment programme, with its residential space tranche, will continue to promote business growth over the financial year ahead.
Train & Employ
The Train & Employ business division continues to focus on supporting education and training measures based on EU development programmes, the scale of which will be essentially the same as in the previous year. The volume of subsidies approved for development measures associated with social inclusion, on the other hand, declined year on year as a result of funds having been brought forward in 2015. New business overall fell slightly in this development segment.
Create & Grow
WIBank is introducing new products designed to meet the evolving requirements of its customers, which are increasingly seeking both an element of risk sharing and risk capital. The importance of supporting young, innovative companies continues to grow and WIBank has plenty to offer in this area including the Hesse innovation loan and the Technologiefonds Hessen III technology fund, which increases the investment opportunities available. Both products are enjoying strong demand and promise much for the future.
Sustain & Modernise
New business in the Sustain & Modernise business division dropped back as expected due to the effect of one-off items on the previous year’s figures. The main sources of new business were the Municipal Protection Shield (KSH) and public authority investment development programmes, support for projects in healthcare and broadband expansion and infrastructure finance arrangements.