Banks face an ever challenging environment not least in their core lending activities. Capital requirements have increased significantly and competitive pressures often do not allow banks to charge enough to compensate for cost of capital. Selling loan portfolios is one way to de-risk the balance sheet, reduce RWA and thus cost of capital. Another way is to transfer the risk to the bank of losses in the portfolio to a 3rd party, borrowing techniques from the securitisation market. This type of risk sharing with investors is often preferred by banks as it does not disrupt their relationship with borrowers. Investors are attracted by the rates of return on offer and by the alignment of interest with the banks.
Bank risk sharing has existed for two decades. Yet it remains a niche market limited to institutional investors due to the complexity of the asset class. This CFA Austria event aims to offer a primer by combining the viewpoints of a bank, one of the few dedicated asset managers as well as a family office.
Stefan Weiser is a Managing Director of the Flick Family Office in Vienna. He previously held positions at Goldman Sachs in London, Singapore and Frankfurt, specialising in commodities and derivatives. Latterly he worked in Wealth Management servicing European family offices. Stefan also worked for UBS Investment Bank in Zurich and Raiffeisen Zentralbank in Vienna. He studied law and business administration in Vienna and obtained a postgraduate degree in law from the London School of Economics. Stefan is a CFA charterholder.
Laurie Sudwarts is a Managing Director of Christofferson Robb & Company. Since qualifying as a lawyer in the UK in 2001, Laurie has specialised in Securitisation, Derivatives and Capital Markets first as a private practice lawyer, subsequently within investment banking and most recently within the asset management industry.
Christofferson Robb & Co (CRC) - Continuously active in ‘risk sharing’ transactions since 2002, CRC is an SEC-regulated asset manager with nearly $3.5 billion assets under management dedicated to bank capital release transactions.
Oliver Fürst has been in charge of RBI’s securitization activities as Head of Active Credit Management since 2014. Before he worked for Austrian and American banks in Vienna, Munich, London and Luxembourg with a strong focus on Structured and Corporate Finance, Securitization and Treasury/ALM.
Risk sharing at RBI:
Risk sharing and securitization transactions have been actively used by RBI as an important instrument to increase balance sheet efficiency and facilitate additional customer business for many years. Recently RBI closed a synthetic securitization of corporate and project finance loans in Slovakia.