UniCredit Utilizes Significant Risk Transfer to Enhance Loan Pricing Competitiveness
UniCredit's Strategic Use of Significant Risk Transfer (SRT)
Incorporating SRT Capital Benefits into Loan Pricing
May 28 (Reuters) - UniCredit is including the capital benefit from significant risk transfer (SRT) into its process for granting and pricing new loans, the head of the bank's balance sheet management said in an interview with Bloomberg News published on Thursday.
Evolving SRT from Capital Efficiency to Competitive Advantage
“We have been working to evolve our use of SRTs from being purely a capital efficiency tool into something that directly improves the competitiveness of our bankers when they originate loans,” Stefano Chiarlone said.
UniCredit's Leadership in SRT Transactions
Regular Use and Programme Development
Among large European banks, UniCredit is one of the most active in the use of SRTs, which it has turned into an ordinary tool to manage capital, developing a large-scale programme that leads it to complete SRT transactions on a regular basis.
Purpose of Significant Risk Transfer Transactions
Banks use significant risk transfer transactions to free up capital that would otherwise be tied up against their loan books for regulatory purposes.
Future SRT Issuance Plans
Projected Volumes and Growth Potential
The Italian lender plans to issue SRTs tied to between 14 billion euros ($16.25 billion) and 16 billion euros of loans this year, with the possibility of moving closer to 20 billion euros if origination in the second half of the year keeps growing, Chiarlone told Bloomberg.
($1 = 0.8615 euros)
(Reporting by Mihika Sharma in BengaluruEditing by Tomasz Janowski)