Apollo's insurance arm vaults to second-biggest FHLB borrower

Apollo Global Management Inc.'s insurance arm was the second-biggest borrower last year in the Federal Home Loan Bank system, a Depression-era program designed to shore up mortgage lending that has morphed into a go-to — and controversial — source of cheap financing for banks and other financial institutions.

Athene Holding Ltd. owed the FHLB $23.3 billion in loans, known as principal advances, as of Dec. 31, second only to Truist Financial Corp. and ahead of every major US bank. That's up from 2024, when Athene was the seventh-biggest borrower in the system with a balance of $15.6 billion.

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The US Congress set up the FHLB system in 1932 to make it easier for savings and loan associations, insurers and banks to access funds so they could finance more mortgages, though borrowers aren't required to use the money for that specific purpose. Over time, the system has grown into a liquidity backstop for large institutions, with loan balances totaling $677 billion as of the end of 2025. The top 10 borrowers accounted for 25% of that amount.

Insurance companies like Athene, which specializes in annuities, have been expanding their use of the system. Insurers' FHLB borrowing has grown about 25% over the past two years and has tripled since 2013, data shows. Representatives for Apollo and its Athene arm didn't respond to a request for comment.

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The FHLB system has faced criticism as the program has taken a more expansive role in the financial system, including during the 2023 regional banking crisis, when failed lenders including Silicon Valley Bank and Signature Bank were found to have tapped the program for billions.