SRT transactions in banks increased by 43% over the year
The volume of synthetic SRT transactions in the banking sector grew by 43% over the year, reaching €66.7 billion. This surge in interest is linked to the emergence of new issuers, an increase in the number of buyers, and heightened regulatory attention to credit risk management.
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Last year saw a significant increase in the use of large-scale risk transfers: the volume of synthetic SRT securitizations in the non-trading portfolio reached €66.7 billion ($77.2 billion), compared to €46.5 billion at the end of 2024, reflecting a 43% growth according to the latest annual report.
The volume of SRT transactions has continued to grow rapidly in recent years, driven by the emergence of new issuers and a rising number of buyers. Banks use SRTs to insure loans against default, which allows them to free up capital for further lending and to make shareholder payouts through dividends and share buybacks.
Total securitization volume last year amounted to €74 billion, slightly above the €73 billion recorded the previous year, according to corporate reporting.
The growing use of SRTs in the banking sector has attracted the attention of regulators. The European Central Bank has recommended that lenders more frequently use transactions that fully remove loans from their balance sheets in order to reduce risks associated with the circulation of credit risk. Synthetic SRTs transfer only the credit risk.