BNP Paribas' synthetic risk transfer transactions in Paris, France, are expected to grow by 43% in 2025.

LootboxPhobia · 2026-03-20T15:16:12+00:00

According to BNP Paribas' annual report, the bank's self-created synthetic securitization exposures in the non-trading book surged 43%, drawing regulatory scrutiny. The ECB has also urged lending institutions to rely on transactions involving the removal of entire loan portfolios to prevent circular risk transfers.

LootboxPhobia

2026-03-20 15:16:12

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Investing.com – According to the latest annual report from BNP Paribas, the bank increased its reliance on significant risk transfers last year. Its non-trading book’s synthetic SRT securitization exposure rose from €46.5 billion at the end of 2024 to €66.7 billion ($77.2 billion). This increase represents a 43% growth.

In recent years, with new issuers and more buyers entering the market, SRT trading volume has grown rapidly. Banks use SRTs to provide default insurance for loans, freeing up capital for lending, and returning funds to shareholders through dividends and stock buybacks.

According to corporate documents, Banco Santander SA’s securitization exposure last year reached €74 billion, a slight increase from €73 billion the previous year.

The overall growth of SRTs in the banking industry has attracted regulatory attention. The European Central Bank has urged lending institutions to rely more on transactions that remove entire loans from the balance sheet, due to concerns about cyclical risk transfer. Synthetic SRTs only transfer credit risk.

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