Rival AIB has also been considering entering similar insurance deals for some time
Myles O'Grady, chief executive of Bank of Ireland, which has now completed seven significant risk transfer deals since 2016 to release capital. Photograph: Nick Bradshawhas moved to lower the level of expensive capital it must hold against part of its loan book by entering a deal that will see Spain’s Santander has agreed to acquire notes from Bank of Ireland that would see it take on the credit risk for millions of euro of potential losses on the portfolio, according to sources.
The bank has carried out six other so-called significant risk transfer deals since 2016, covering mortgages, Irish business loans, project finance loans, and UK corporate and leveraged acquisition finance exposures., has been considering entering similar insurance deals for some time.
Significant risk transfers have become a fast-growing part of credit markets, totalling more than €206 billion in 2023, up from about €97 billion in 2020, according to data compiled by Axa Investment Managers. Bank of Ireland paid out €635 million in dividends last month to shareholders and is in the middle of a €520 million share buyback programme – driven by a surge in earnings amid heightened interest rates.
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