Italy’s biggest bank Intesa Sanpaolo 
ISP had shifted the credit risk on 29 billion euros ($34 billion) of assets off its balance sheet by the end of September, it said on Friday.
To preserve capital in the face of increasingly stringent regulatory requirements, European banks are making increasing use of synthetic securitisations, or Significant Risk Transfer deals.
These deals allow lenders to transfer the credit risk of loan portfolios to external investors without removing the assets from their balance sheets.
In its third-quarter results, Intesa said it had carried out a synthetic securitisation on 1.5 billion euros in infrastructure and project finance loans in the period.
Credit rating agency Moody’s, quoting data from the Association for Financial Markets in Europe, said earlier this year that total new SRT transactions in Europe rose to 156 billion euros in 2024 from 77 billion in 2021.
“The 14 rated banks we surveyed have 181 outstanding SRT deals between them, referencing a pool of over 246 billion euros of loans,” Moody’s said, adding that the figure amounted to 6% of their total loan book.
Intesa said its Balance Sheet Optimisation division continued to work to reduce the amount of capital tied up against assets through its Active Credit Risk Management programme.
($1 = 0.8575 euros)