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New and positive signs from Europe on Securitisation

Foto van Jacco Samuels, Managing Director, Hypoport

Jacco Samuels, Managing Director, Hypoport

Foto van Daniel Goudsmit, Business Development Lead, Hypoport

Daniel Goudsmit, Business Development Lead, Hypoport

The Dutch securitisation market showed a few different faces in 2024, according to Amsterdam-based fintech services provider Hypoport. We talk securitisation, risk sharing, and innovation management with Managing Director Jacco Samuels and Business Development Lead Daniel Goudsmit.

How was 2024 for Hypoport?

Jacco Samuels: I had expected a lot more activity in terms of sustainability-related securitisations, but we, in fact, saw a more reserved attitude in the market on this front. Perhaps we were too optimistic following the sharp increase in Green Securitisations in 2023. However, we did help the Dutch Securitisation Agency’s release its new reporting standard, which is being rolled out throughout 2025. This updated template provides deeper insights into the ESG performance of loan portfolios for Dutch RMBS securitisations.

 

Daniel Goudsmit: It takes a lot of investment in terms of recording data, and changing processes if banks want to show how green their balance sheets are. That costs time and money. To justify that additional investment, financial institutions need positive stimulus. For example, the market showing appreciation that you are greener. We haven’t really seen that yet. Another way would be to penalize banks if they fail to reveal their greenness, but we’re not seeing that either. Having said that, the Dutch mortgage market is one of the most advanced in the world in terms of the amount of ESG data available, so it depends on your perspective. If you are from Germany, the Dutch market likely looks great in terms of ESG data, whereas we in Holland tend to think that there’s still a lot of work and investment to be done. However, the climate (no pun intended) needs to be right for that, and I don’t think we have arrived at that point yet on greener securitisations.

What key trends have you seen in 2024?

Daniel Goudsmit: If we look beyond the ESG situation, the financial and political landscape in Europe seems to be improving regarding securitisation. There have been several reports which have been openly positive towards securitisation. That is a major change in attitude in my view. Christine Lagarde, president of the ECB, told the European Banking Congress in November 2024 that developing securitisation could support banks create balance sheet space for allocating riskier debt, without compromising prudential regulations. This would enable banks to play a bigger role in financing innovation, she said. This is a new, positive tone. Lagarde was also echoing the Draghi Report issued in September. Mario Draghi’s report on European competitiveness said that securitisation could act as a substitute for the lack of capital market integration by allowing banks to package loans originated in different member states into standardized assets. These were both very encouraging signals for the European securitisation market, of course.

 

Jacco Samuels: This may mark a mild reconsideration of ESMA reporting requirements for certain asset classes. The whole market has now adopted ESMA. We are all using it and have accepted it. It has finally become the standard. However, this new tone might imply that it’s not possible for every asset class. It is sometimes not possible to report on everything.

 

Daniel Goudsmit: Parties are now looking into how to use ESMA as efficiently and effectively as possible, which is a good thing. The sooner market parties accept this, then invest in how to use it as efficiently and effectively as possible, the better. Also, the new insights from European regulators that a more pragmatic approach might be more helpful, is also positive going forward.

What interesting business developments does Hypoport see ahead?

Jacco Samuels: We are still noticing a significant increase in Significant Risk Transfer deals in Europe. These are quite complex sounding deal structures, which in essence are risk sharing solutions. Simply put, a bank has a risk on its balance sheet and seeks a partner to share that risk. We assisted banks with a wide range of corporate and SME SRT deals last year. In most cases, there is no requirement for cash reconciliation because the transactions are synthetic, however, there are some complex features in the monthly reporting requirements of SRT deals, and that is where we come in.

 

Daniel Goudsmit: The various reporting aspects of SRT deals such as data quality and sourcing, portfolio management and optimization, banking system integration and ESMA reporting can form hurdles for innovative bankers seeking capital relief. Also, internal audit departments are often involved due to accounting and capital consequences. Thanks to our PRoMMiSe cloud-based platform, we can help our clients inform investors, rating agencies and regulators (as well as internal parties) correctly and swiftly. This provides financial institutions with crucial capital relief to continue funding SMEs and Corporates, keeping the wheels of the European economy moving forward and fast without having to resort to bond or stock markets. I think this is key for Europe’s economy to stay innovative and agile.

 

Jacco Samuels: This is also partly why we are currently applying a number of Artificial Intelligence solutions in our operations. The first stage of using AI for us is about learning and applying it to internal processes, before we roll out anything to market. There is a lot of promise in these technologies in terms of improving certain operational processes and driving down the costs to run a transaction or bank. At the same time, we make sure security and good governance are front and center in the design of these innovations and all our processes are DORA-compliant.

How is the Engage project progressing?

Jacco Samuels: 2025 is the last of the three years for which Engage has received EU financing for the Green Investment Portal to provide consistent housing related ESG data on European housing stock. We are now, together with our partners who include the European Data Warehouse, and Nationale Nederlanden in the testing phase and accepting new partners for the launch phase, which is exciting. Interested parties should certainly get in touch with us if they would like to get involved in this ground-breaking initiative. Perhaps we can talk about this during this year’s Securitisation Event!

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