Banco Santander, BBVA, and Deutsche Bank are currently organizing significant risk transfer (SRT) deals. These transactions cover a loan volume of at least $17.5 billion. The banks utilize synthetic securitizations to transfer credit risk to external investors while maintaining the loans on their own balance sheets.
Through these instruments, banks aim to release Common Equity Tier 1 capital, which serves as a core financial buffer. This method is described as more cost-effective than issuing new equity. Investors participating in these deals typically receive yields exceeding 10% on specific tranches.
Santander is evaluating five separate transactions, focusing on UK commercial real estate and Brazilian SME financing. Earlier in 2026, Deutsche Bank and Santander participated in a synthetic securitization involving a $500 million trade-finance portfolio supported by the World Bank and the IFC.
The European market for synthetic securitizations reached approximately €320 billion by mid-2025. Despite the growth, institutions including the ECB, IMF, and the Bank for International Settlements have expressed concerns regarding the opacity of these financial structures.
