(AGENPARL) – ven 16 dicembre 2022 PRESS RELEASE
2022-544-EN
Luxembourg/Warsaw, 16 December 2022
Supporting Polish SMEs and Mid-Caps development: EIB Group and Santander Consumer Bank Group sign a synthetic securitisation for PLN 1,146m (EUR 245m)
A synthetic securitisation, whereby EIF and EIB provides protection on a mezzanine tranche and a senior tranche, reduces risk for Santander Consumer Bank S.A. and allows the originator to release the majority of capital allocated to the securitised portfolio.
The transaction is agreed alongside a commitment by Santander Consumer Bank S.A. to provide new financing to SMEs and environmentally sustainable projects, contributing to job creation and economic growth in Poland.
The European Investment Bank Group (EIB Group), comprising the European Investment Bank (EIB) and the European Investment Fund (EIF), has strengthened the long-term co-operation with Santander Consumer Bank Group, a part of the Santander Group, by signing of a synthetic securitisation and new lending commitments with Santander Consumer Bank S.A. (SCB). This is the third capital relief transaction entered into between EIB Group and SCB, with the earlier transactions being a true sale securitisation executed in 2016 and a synthetic securitisation entered into in 2019.
Under the current transaction, SCB commits to, over a three-year period, provide new lending for an amount of up to PLN 1,529 million (EUR 327 million). Most of new lending will be originated to SMEs, with the remainder to be originated to Mid-Caps and private individuals (only allowed for climate action projects), and at least 20% of the financing will go to projects contributing to climate action and environmental sustainability. The new lending is expected to make a significant positive contribution to job creation and economic growth in Poland.
The increased lending capacity for SCB stems from the unfunded protection issued by EIF, referencing a granular portfolio of consumer loans held by SCB (subject to the standardised approach to credit risk) with a total outstanding balance of PLN 1,146 million (EUR 245 million). This synthetic securitisation reduces the credit risk maintained by SCB and results in a significant reduction of capital needs, enabling redeployment of capital to support the real economy.
The synthetic securitisation is structured such that EIF provides protection on the mezzanine tranche (with a balance of PLN 198 million) and the senior tranche (with a balance of PLN 934 million). The majority of the EIF’s exposure is, in turn, counter-guaranteed by EIB under a back-to-back guarantee (covering 100% of the mezzanine tranche exposure and 50% of the senior tranche exposure). SCB retains the junior tranche. The transaction features synthetic excess spread in the form of use-it-or-lose-it, a 2-year replenishment period and pro rata amortisation of the senior tranche and the mezzanine tranche (subject to performance triggers).
EIB Vice-President, Teresa Czerwinska, said: “The cooperation of the EIB Group with the SCB will bring measurable benefits to Polish SMEs and mid-cap companies, and will also facilitate the creation of new jobs, accelerate economic and social development and contribute to building a green economy in Poland that will be competitive on a global scale. This support is essential as the SME and mid-cap sector is the largest employer in Poland, employing approximately two-thirds of all employees nationally. The EIB Group welcomes the increased cooperation with Santander Consumer Bank as it will provide Polish businesses with additional financing options to invest and grow despite the difficult economic environment.”
EIF Chief Executive Alain Godard said: “It is important to provide financing to SMEs and Midcaps. With our long-term partner, Santander Consumer Bank we can offer innovative financing tools – this securitisation will allow to support business and help companies to strengthen their competitiveness on the market”.
Paweł Muciek SCB CFO comments: „Our very good and long-standing cooperation with the EIF and EIB has been focused on supporting micro, small and medium-sized enterprises, especially in the areas of vehicle financing and now also in the field of renewable energy. We are very pleased to have worked out together the innovative securitisation transactions that let us release the capital to enhance the support of the economy in the form of leasing and credit financing.”
Promoting cohesion has been a priority for the European Investment Bank since its creation in 1958. In the last long-term budget of the European Union, 2014-2020, the EIB Group supported investments worth around EUR 630 billion in cohesion regions, equivalent to around 16% of the EU’s GDP. In 2021, Poland was the largest beneficiary of financing for cohesion regions by the EIB Group – this financing amounted to EUR 4.5 billion.
The European Investment Bank is one of the world’s main financiers of climate action and environmental sustainability globally. As the EU’s climate bank, the EIB is committed to support the European Green Deal, help Europe become the first carbon-neutral continent by 2050 and contribute to the achievement of the United Nations’ Sustainable Development Goals. In Poland, in 2021, EIB loans supporting the green transformation of the Polish economy reached 42% of the total lending of EUR €6.5 bn.
The SME sector in Poland represents 99.8% of enterprises and is responsible for 67.7% of employment. Supporting SME development is one of the key priorities for the EIB Group – in 2021 small and medium-sized businesses received funding from the EIB Group of EUR 1.78 billion, of which around EUR 640 million was allocated specifically to ease the impact of COVID-19.
Background information
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The bank finances projects in four priority areas – infrastructure, innovation, climate and environment, small and midi-sized companies (SMEs).
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
Santander Consumer Bank – is a part of the Santander Bank Polska Group, one of the leaders of the consumer finance market in Poland. It offers customers a wide range of products including cash loans, new and used car loans, HP loans, special purpose credit, online revolving limit, credit cards and deposits and savings account. Products are distributed online and through a network of branches, showrooms and car dealerships, shops and service outlets. Santander Consumer Bank’s range of products is supplemented with leasing products addressed to small, medium and micro-enterprises, as well as to large corporate customers, distributed by its subsidiary – Santander Consumer Multirent.
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