HSBC and Standard Chartered weigh SRT deals as Asia activity grows

Highlights

HSBC is exploring an SRT tied to Asia-Pacific loans.
Standard Chartered is weighing a Chakra SRT linked to about $2 billion of corporate loans.
SRTs help banks manage default risk and free regulatory capital.

HSBC has begun preliminary discussions with investors about a possible SRT tied to loans from Asia-Pacific markets, including Hong Kong, Singapore, India, and Australia, Bloomberg reported. Standard Chartered is separately weighing a deal linked to about $2 billion of global corporate loans under its Chakra SRT program, though final terms may change as investor talks continue.

Banks turn to risk transfer

Significant risk transfers allow banks to shift part of the default risk on loan portfolios to investors, often while keeping the loans on their balance sheets. The structure can help banks claim capital relief, strengthen solvency measures, and redeploy regulatory capital into new lending.

Investor demand has also supported the market. SRT deals can offer coupons above 10%, making them attractive to credit investors searching for higher-yielding assets. Barclays and Banco Santander have been among the most active users of the instrument, but Asia-linked portfolios are becoming more visible.

HSBC has already started using SRTs in the United Kingdom and Asia and sees room to do more, according to comments from Chief Financial Officer Pam Kaur. The possible Asia-Pacific transaction would fit the bank’s wider focus on using capital more efficiently across its global loan book.

Asia loans move into focus

The market is broadening beyond its traditional base. Singapore’s DBS recently completed its debut SRT tied to a $1 billion diversified corporate loan portfolio. Standard Chartered previously carried out a deal linked to $1.5 billion of trade finance loans across Asia, the Middle East, and Africa, allowing it to receive capital relief for its Singapore subsidiary.

That activity matters because Asian banks and Asia-focused lenders have historically used SRTs less frequently than their European peers. As loan books grow and capital rules tighten, more banks are looking at synthetic risk transfer as a way to manage exposure without pulling back from lending.

Standard Chartered’s possible Chakra deal would add to that trend. The bank’s global corporate loan portfolio and trade-finance footprint give it a natural base for structures that transfer risk while maintaining client relationships.

A capital tool moves east

The rise of Asia-linked SRTs signals a shift in how banks manage loan exposure in the region. These deals give lenders a way to keep serving borrowers while reducing the capital strain attached to large corporate and trade-finance portfolios.

For investors, the appeal is yield. For banks, the appeal is flexibility: transferring risk can support lending capacity without a full asset sale. If HSBC, Standard Chartered, and peers continue expanding these programs, Asia could become a more regular source of SRT issuance rather than a secondary market for a tool built mainly in Europe.

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