Balance Sheet Optimisation

Building tomorrow’s balance sheet

Introduction

Our clients are constantly looking to optimise their balance sheets for profit, funding and risk.

To achieve this, they refine asset and funding strategies, buy assets or businesses, raise new prudential capital, and support growth through securitisation.

Our clients require an adviser with the breadth to look across all the options, weigh the risks and provide best execution.

An adviser who understands the dynamic regulatory backdrop.

This is the power of KPMG balance sheet optimisation.

Propositions

Cash Securitisation

Strategic advice on options and impacts
Private finance arranger
Independent advisor on listed deals
Preparation: credit analytics, portfolio optimisation, investor material
Execution: structuring, negotiation, ratings, offering material

Synthetic Securitisation

Advice to first time issuers (structuring, governance, data, regulatory)
Structuring to achieve Significant Risk Transfer
Valuation of SRT positions held by investors

Capital Raising

Private finance arranger
Independent advisor on listed deals
Full deal support
CET1, AT1, Tier 2, senior debt, venture capital

M&A

Buy-side and sell-side M&A Lead Advisory
Deal Strategy advice and Bid defence
Public to private transactions

Portfolio Sales & Acquisitions

Loan portfolio sales (buy-side / sell-side) including Performing and NPLs
Credit platform M&A: debt purchasers and servicers
Credit pricing and analytics

Capital Management Optimisation / Basel 3.1

Basel 3.1 impact analysis
Preparation or refinement of IRB, Hybrid and AIRB models
Dynamic Capital optimisation under Basel 3.1

Treasury / Booking Model

IRRBB – regulatory and hedging strategies
Booking models and legal entity structure
Integrated balance sheet modelling

Corporate strategy

Digital transformation
Funding optimisation (products, channels, mix)
Cost reduction programmes

Forward flow / originate to distribute

Structuring Forward Flow transactions (buy-side / sell-side)
Restructuring incentives / KPIs to embed “originate to distribute”
Bilateral and competitive Forward Flow processes

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As regulatory landscapes evolve, banks must navigate increasing capital requirements and regulatory fragmentation, necessitating sophisticated capital generation tools for efficient balance sheet management.

Alec Innes
Partner, Financial Risk Management
KPMG in the UK
Get in contact with Alec

Banks are actively seeking to reduce risk weighted assets and enhance velocity amid the evolving regulatory landscape, with Basel 3.1 set to fundamentally reshape balance sheet management practices.

Marcus Evans
Partner, Financial Services Deal Advisory
KPMG in the UK
Get in contact with Marcus

With impending reforms like Basel 4 adding to financial resource pressures, the need for a range of tools to actively and dynamically manage the balance sheet has only increased and will be a key differentiator in driving improved performance and ultimately improved returns.

Nick Mead
Partner, Financial Services
KPMG in the UK
Get in contact with Nick

The urgency for balance sheet optimization has intensified due to shifts in global interest rates, coupled with the fallout from recent bank failures and impending regulatory responses across the US, UK, and EU.

Caroline Nurse
Partner, Financial Services Deal Advisory
KPMG in the UK
Get in contact with Caroline

Despite the high rate environment, securitisation remains a popular tool to fund organic portfolio growth, while interest in purchasing forward flow for inorganic growth is now widespread.