UniCredit Prices Loans Using Significant Risk Transfer Capital Relief

UniCredit Revolutionizes Loan Pricing with SRT Capital Relief

UniCredit is incorporating the capital benefit from significant risk transfer (SRT) into its process for granting and pricing new loans, according to Bloomberg News. Stefano Chiarlone, head of the bank's balance sheet management, said they have evolved SRT from a pure capital efficiency tool into something that directly improves the competitiveness of bankers when originating loans.

SRT Strategy and Targets

Among large European banks, UniCredit is one of the most active in using SRTs, having developed a large-scale program. The Italian lender plans to issue SRTs tied to between €14 billion and €16 billion of loans this year, with the possibility of reaching €20 billion if origination growth continues in the second half.

Banks use significant risk transfer transactions to free up capital that would otherwise be tied up against their loan books for regulatory purposes. UniCredit has turned SRT into an ordinary tool to manage capital, completing transactions on a regular basis.