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Dutch banking group Rabobank entered into an agreement worth around EUR 1 billion with pension investment firm PGGM to share credit risk across a portfolio of Dutch real estate assets. The collaboration, announced earlier this week, underscores the continued caution within the European property sector amid slow sales and uncertain credit markets. The move follows similar actions by other European banks seeking to mitigate exposure to potential market downturns.
Dutch bank Rabobank has finalised an agreement with pension investment company PGGM to share credit risk on a portfolio of Dutch real estate assets valued at approximately EUR 1 billion (USD 1.17 billion). The firms jointly announced that the initiative aims to reduce exposure to potential losses in the event of market volatility. Advertisement
The arrangement reflects a broader trend among European banks opting for risk-sharing transactions as a strategic safeguard against economic downturns. Recently, Italian bank Intesa transferred the credit risk on assets worth around EUR 29 billion, signalling growing caution among lenders amid a fluctuating credit environment that has also influenced U.S. banking shares over the past month.
Rabobank indicated that this collaboration with PGGM marks its first significant risk transfer (SRT) transaction entirely centred on commercial real estate. Peter de Bruin, who heads Rabobank Real Estate Finance, mentioned that the agreement signifies a milestone for the bank as it continues to refine its credit risk management approach in a challenging property market.
The partnership between Rabobank and PGGM represents a strategic response to sustained uncertainty within Europe's real estate and credit sectors. By sharing exposure to commercial property risks, the institutions aim to strengthen balance sheet resilience while maintaining lending capacity. The deal highlights an increasingly cautious stance across European banking, as lenders prepare for potential headwinds in the property and credit markets.
Source - Reuters
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