Together with solarisBank, a German fintech offering banking as a platform, the digital European loan marketplace entered a strategic partnership for fully-automated, digital loan securitization. CrossLend is Germany-based company providing a securitisation platform allowing lenders to scale their business.
In the partnership, solarisBank will employ their “Balance Sheet Light” model, where investors can directly access the generated loans, relieving long-term pressure on the bank’s balance sheet.
The partnership enables loan securitisation for securities worth EUR 20 – 100 million, which is significantly lower than the common figure of EUR 500 million. Solaris reports that this is made possible due to CrossLend’s automated securitization process and a central, high-grade data warehouse which keeps transaction costs low and maximises transparency.
d-fine, a consulting firm focusing on risk and finance, supported the partnership and the creation of the model.
The securitisation process will be set up by solarisBank using CrossLend’s platform to buy and securitise loan portfolios, allowing the former to enlarge its balance sheet in order to generate the best return on equity value. When this is point is reached, the Balance Sheet Light model is activated via automated securitisation.
Alexander Engel, CFO of solarisBank, calls the Balance Sheet Light Model, “revolutionary”, explaining:
“[a]s a platform, we match supply and demand in the credit sector. At the same time, we maintain the flexibility to hold loans thanks to our banking license and can actively manage our balance sheet. With this approach, we can maximise the efficiency of our equity and make the securities market much more efficient and transparent”
The model is expected to come to market during the first half of 2019.
Oliver Schimek, CEO of CrossLend, notes the company, in the partnership, is putting ideas found in the EU’s Capital Markets Union plan into action. He says that the company’s goal is to “rationalise” the EU’s credit industry and to “promote cash flow in the EU to support the creation of the Capital Markets Union”.
In March, solarisBank acquired a minority stake in CrossLend in a funding round.