Banking and Private Credit: Balancing strategy and control

As post-2008 structural bank constraints created a persistent supply–demand gap in corporate credit, Private Credit has stepped up to fill the gap and has become a permanent part of the financing ecosystem—leading banks to shift from competing with Private Credit to partnering with them.

With global Private Credit AUM having increased from ~US$400 billion in 2010 to over US$2.0 trillion by 2024^[1], Private Credit’s global scale shows that it has become a lasting part of corporate finance rather than a temporary substitute for bank lending.

In response, banks are reshaping their role in the market — shifting toward originate‑and‑share models, distributing exposures to Private Credit funds, and providing fund‑level leverage and NAV financing. These approaches allow banks to stay central to deal origination while participating in Private Credit growth within regulatory constraints.

^{Note: Based on KPMG analysis}

Success requires strategic evolution, not just market entry

To participate in Private Credit deals and models, banks should evolve talent models, technology capabilities and governance frameworks to compete sustainably alongside Private Credit funds. Here are three key pillars to focus on.

1. Strategic entry: Banks are entering Private Credit to stay in the game, not to win it
2. Evolving roles: Private Credit won’t replace banks, but it will likely redefine them
3. Essential adaptation: Adaptation is the key to survival in the Private Credit space 

^{1 Preqin, 2025 Private Debt Global Report, Preqin Ltd., 2025.}