HSBC has begun discussions with investors to reallocate its Asian loan portfolio, while Standard Chartered is preparing a deal for SRT worth approximately $2 billion, reflecting a global trend of banks accelerating the use of risk management tools.
On July 3, 2026, at 3:53 PM, Bloomberg News reported that HSBC Holdings is moving forward with plans for a major Significant Risk Transfer (SRT) transaction , preparing to negotiate with investors for a deal referencing its loan portfolio in the Asia-Pacific region to manage risk and increase capital flexibility.
Sources close to the matter reveal that HSBC is in preliminary discussions with investors regarding an SRT transaction, which may reference loan portfolios from multiple countries including Hong Kong, Singapore, India, and Australia. The deal is expected to be completed within this year.
Meanwhile, Standard Chartered, another bank with a primary focus on Asia, is considering a transaction with SRT under the Chakra SRT project, leveraging its global corporate loan portfolio valued at approximately $2 billion, although the final details may change depending on the outcome of negotiations with investors.
SRT (Self-Risk-Related Capital) is an increasingly popular financial instrument among banks worldwide because it transfers the default risk of a loan portfolio to investors. This allows banks to reduce their regulatory capital requirements, improve their financial stability ratios, and reinvest the saved capital in lending or business expansion.
Investors are also showing increased interest in SRTs because this type of instrument offers high coupon yields, with many deals currently offering returns exceeding 10% per year. Major banks such as Barclays and Banco Santander are consistently issuing SRTs.
Although the SRT (Self-Trusted Loan) market is still primarily dominated by banks in Europe and North America, lending in the Asian region is steadily playing an increasingly significant role. Most recently, Singapore's DBS Group Holdings conducted its first SRT transaction, referencing a $1 billion corporate loan portfolio.
Earlier this year, Sumitomo Mitsui Banking Corp.'s Asia-Pacific business closed the SRT deal, similar to Standard Chartered's transaction involving a $1.5 billion trade finance portfolio, which helped the company reduce the capital burden of its Singapore subsidiary.
Pam Kaur, HSBC's Chief Financial Officer (CFO), told analysts in March that the bank had already begun using SRT in both the UK and Asia, and that there was significant potential to expand the use of this tool further.
"We still have a lot of room for SRT (Self-Registered Trading) compared to some banks that may have overused this tool and then had to slow down due to regulatory factors," she said.
Furthermore, loans in the Asia-Pacific region were part of the asset portfolio that BNP Paribas used in recent SRT transactions. Other European banks that recently closed similar deals include Societe Generale, Raiffeisen Bank International, and KBC Group.
Reference: bloomberg.com
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