Erste Group Bank AG completed a significant risk transfer tied to more than €10 bn of loans, as the Vienna-based lender looks to release capital ahead of its largest acquisition on record.
Erste sold the SRT to a small group of insurance companies. The buyers stayed unnamed because the details remain private.
The reference portfolio consists mainly of loans to small and mid-sized businesses, originated through Erste’s network of Austrian savings banks, Beinsure noted.
According to those sources, the deal ranks among the largest SRT transactions aimed solely at insurers. Erste confirmed it has wrapped up its planned SRT activity for the 2025 financial year, covering portfolios in Austria, Romania, the Czech Republic, Slovakia, and Hungary.
The transactions support growth ambitions across individual markets and at group level, but declined to share further detail on structure or counterparties.
The capital relief matters now. Erste is finalising the purchase of a 49% stake in Santander Bank Polska as part of a €7 bn transaction. The deal also includes the Polish lender’s asset management arm.
Erste expects to close by mid-January, following regulatory approvals granted last year.
The bank plans to fund the acquisition without raising new equity. As a result, Erste has said its common equity tier 1 ratio will fall by about 460 basis points. SRTs soften that hit, Beinsure stated.
Chief Financial Officer Stefan Doerfler told analysts in August that completed transactions would lift the CET1 ratio by more than 40 basis points.
SRT structures let banks hedge loan portfolios by transferring credit risk to investors through credit-linked instruments. Coverage typically applies to roughly 5–15% of the underlying loan value.
According to estimates from Man Group, the market for these instruments could roughly double over the next five years.
Insurers already participate, often by issuing guarantees instead of purchasing notes outright. At the policy level, European authorities are weighing changes that would make it easier for insurers to invest in SRTs, part of a broader push to deepen regional capital markets.
