Banks continue to streamline balance sheets Santander (SAN.US) sells $1 billion loan portfolio to Blackstone (BX.US)

The Zhitong Finance App learned that Blackstone (BX.US) has purchased an infrastructure loan portfolio worth $1 billion from Santander Bank (SAN.US).

The portfolio consists of loans to finance digital infrastructure such as data centers and assets in other sectors such as renewable energy and transportation, according to a statement.

Robert Horn, global head of infrastructure and asset credit at Blackstone Group, said in a statement that the deal “is in line with our strategy of partnering with leading financial institutions to provide large-scale, long-term, and efficient solutions to support their capital goals.”

Santander has begun efforts to increase the return on capital. The Spanish bank is also promoting significant risk transfers associated with more than €20 billion ($21 billion) in loans across its global operations, including the US, Germany, the UK, and Mexico.

The bank's chief financial officer, Jose Garcia Cantera, said in an earnings conference call on October 29 that the bank had transferred nearly 40 billion euros of risk-weighted assets from the books in the first nine months of this year. In comparison, risk-weighted assets for the full year of 2023 were around €30 billion.

Private debt transfers

Marcel Patiño, global head of private debt mobilization at Santander, said the bank is seeking to streamline its balance sheet while supporting further development as a “leading advisor and arranger in structured finance.”

Although banks still dominate much of the infrastructure credit industry, regulatory requirements make it more expensive for banks to hold such assets on their balance sheets. This has opened a window for private capital firms, such as Blackstone, which are not subject to the same regulations, to hold loans issued by banks.

Other banks are also selling infrastructure loans. ABN AMRO is reportedly selling a portfolio of infrastructure loans worth around €3 billion.