AIB Group Plc has launched its inaugural significant risk transfer (SRT) deal, targeting a portfolio of approximately €700 million ($760 million) in infrastructure and project finance loans. This transaction, revealed by sources familiar with the matter, is being arranged by Banco Santander SA, which has been increasingly active in structuring risk transfer deals for other financial institutions. The deal comes as AIB looks to expand its use of SRTs across its loan portfolios, as previously indicated by Chief Financial Officer Donal Galvin.
This move by AIB aligns with a broader trend among banks to utilize SRTs to optimize capital and manage risk. Santander, in particular, has emerged as a key player in the SRT market, not only for its own balance sheet but also in assisting other banks. For instance, Santander previously arranged a similar SRT for Bank of Ireland Group Plc in June 2024, involving a pool of about €1.5 billion ($1.6 billion) in leveraged financing.
The project finance portfolio includes loans for various infrastructure projects, some of which are designed to support climate-friendly assets, according to earlier statements from AIB's CFO. For 2027, AIB is also considering a potential SRT linked to its commercial real estate holdings. This strategic use of SRTs allows AIB to free up capital that can then be redeployed for further lending and growth, particularly in sectors like sustainable infrastructure.
