Nordic Investment Bank weighs synthetic risk transfers to free up lending

What NIB is considering and why

NIB is running a preliminary review with banking advisers on whether to add synthetic risk transfers, or SRTs, to its toolkit. As CFO Kim Skov Jensen put it, "The SRT is then a third tool that we have looked into. We're still assessing whether this is something we would like to have in our toolbox." He said the work is "more a prudent preparation," noting NIB can continue to grow lending without SRTs.

In plain English: SRTs shift the credit risk associated with a bundle of loans over to external investors, freeing balance sheet room for fresh lending and helping limit concentration in a single sector or borrower.

How it fits with NIB's current setup

NIB already uses credit risk insurance and the European Union's InvestEU guarantee program to manage risk. Jensen, a former Nordea Bank Abp executive, said that if lending capacity needs to rise, "we could do more credit risk insurance, we could use more InvestEU, and we could also potentially put SRTs into our toolbox." A go or no go on SRTs is expected around 2027. The bank holds the highest ratings at Moody's Ratings and S&P Global Ratings.

Demand, defense and the lending backdrop

"We have a good demand for our lending at the moment," Jensen said. According to the latest quarterly report, during the first three quarters NIB recorded €3.5 billion ($3.9 billion) in new disbursed financing, a 29% rise versus the same period in 2025. After Sweden, NIB's largest shareholder, joined NATO in 2024, the Nordic and Baltic member countries asked the bank to extend its financing to include defense. In September, NIB updated its mission and strategy to emphasize resilience, security and defense.

Who uses SRTs and why investors should care

SRTs have become more common across DFIs and multilateral development banks, such as the International Finance Corporation and the European Bank for Reconstruction and Development. Buyers of these transfers have included Dutch pensions manager PGGM, structured credit investor Newmarket Capital, and insurers AXA XL, AXIS Capital and Liberty Specialty Markets.

Smart investors explore new tools to manage risk and sharpen their decision making. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.

The bottom line: if NIB adds SRTs, it gains another way to free balance sheet room for additional lending, which could shape how it deploys financing across the region and in sectors like defense.

Using thoughtful analysis and modern technology can give investors a subtle edge. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.