Banks Urged To Diversify Their Funding Strategies

Banks and credit institutions need to diversify their funding sources to include a number of strategies, panelists at the Global ABS conference said today.

  • 16 Jun 2010
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Daniel O'Leary

Banks and credit institutions need to diversify their funding sources to include a number of strategies, panelists at the Global ABS conference said today. Nicolaus Trautwein, head of transaction management at Commerzbank, said it is dangerous for banks to rely on only one tool to fund their mortgage and loan books. “Mortgage banks should not only rely on capital markets,” he said. “I think... deposits and retail, as a funding source, will become much more important.” Commerzbank has relied on the unsecured market, but covered bonds will play a bigger part in the future, he said.

Since the collapse of the residential MBS market in Europe, many issuing banks have turned to the covered bond space as a funding tool. The European Central Bank has also boosted issuance of the bonds by committing about €60 billion toward a purchase program over the last 12 months. The program has focused, however, on highly rated bonds from the traditional issuing regions, such as France and Germany.

Mauricio Noe, managing director head of covered bonds at Deutsche Bank, said investor confidence is returning to Europe's RMBS market, opening it as a funding option for banks. Especially in the Dutch and U.K. Residential markets, investors are starting to label this collateral as “super-prime,” Noe noted.

Dutch and U.K. banks have been the most active, with issuing banks sponsoring a number of RMBS deals since the market reopened last year. Spreads now need to contract further to make the issuance of these deals more economic, he said.

  • 16 Jun 2010

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Share % by Volume
1 Societe Generale 15.35
2 Rabobank 14.41
3 Morgan Stanley 11.73
4 Barclays 8.99
5 Credit Agricole 7.57

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 27 Feb 2017
1 Wells Fargo Securities 11,897.40 33 11.83%
2 Bank of America Merrill Lynch 9,837.56 29 9.78%
3 Citi 9,714.54 32 9.66%
4 JPMorgan 7,997.38 24 7.95%
5 Credit Suisse 6,335.67 14 6.30%