The French structured products market held its own during the first quarter of 2017. Sales volumes, at €3.1bn, saw only a slight decrease (-4.8%) compared to the first quarter of 2016 (€3.3bn), especially compared to the rest of Europe where sales were down by 40% year-on-year. Issuance remained fairly stable too with 108 products striking versus 126 products in 1Q 2016. Thirteen issuers were active in the market during the first quarter against 14 issuers during the same period last year.
SRP reviews the data and the financial results of the top five French issuers for the first quarter of 2017.
Societe Generale had a share of 26% of the French market during the first quarter of 2017, according to SRP data. In its domestic market, where the bank's products are distributed via, among other, Conservateur, Equitim, i-Kapital, KBL Richelieu, Many for Money and MMA Assurances, 31 structured products (including non-retail but excluding leverage and flow) with estimated sales of €946m were issued by the bank between January 1 and March 31, down from 56 products worth €1.4m that were sold during the same period last year. Sales volumes were up from the previous quarter when 39 products with sales of €542m were issued by the bank.
In Europe, where the bank had a 6% share of the market, the bank sold 71 structrured products worth €1.1bn (1Q 2016: 131 products / €1.6bn) of which 21 products (€29m) were sold in Sweden via Exceed (two products), Garantum (eight), Mangold (five), Skandia (three) and Strukturinvest (three).
Apart from core tranche products, the bank also issued more than 24,000 leverage and flow products - the majority of which were turbos, discount- and inline certificates - for the German market.
In its results for 1Q 2017, Societe Generale reported net banking income for its Global Markets & Investor Services division totalled €1.7bn in the first quarter of 2017, up 8.3% from the same quarter last year. Equities revenues rose 4.1% year-on-year in 1Q 2017, to €562m, boosted by increased investor appetite for structured products, with strong demand in Asia and Europe. In contrast, despite rising markets, investors were less active in flow products, in conjunction with very low volatility, leading to a drop in volumes, notably in cash activities. Fixed Income, Currencies & Commodities (FICC) continued to grow, with revenues up 12.8% versus 1Q 2016 at €777m. This increase reflected the good commercial momentum, both for flow and structured products, according to the bank.
Forty-three percent of Societe Generale's parent company 2017 funding programme of €24.9 - including €17.1bn of structured notes - was completed at April 19, 2017 (€10.8bn, including 67% of structured notes) while an additional €1.2bn was issued by subsidiaries.
'Group net income testifies to the substantial increase in the contribution of its business, underpinned by its revenue growth and risk control,' said Frédéric Oudéa (pictured), chief executive officer, in a statement. 'The group has initiated a process to simplify its organisational set-up which will enable it to even better serve its customers, increase its agility and innovative capacity, and continue to exploit synergies between its businesses.'
Credit Agricole posted revenues of €4.7bn in 1Q 2017, up 15.2% from the same period last year. During the quarter Credit Agricole issued its first Green Capital Note for $3bn. The bank is also a book runner for green bonds (all currencies) with 16 deals in the first quarter.
According to the bank's quarterly report, in a decision dated December 7, 2016, the European Commission jointly fined Credit Agricole SA and Credit Agricole CIB €114.6m for participating in a cartel in euro interest rate derivatives. Both parties are challenging this decision and have asked the European Court of Justice to overturn it. Additionally, the Swiss competition authority, Comco, is conducting an investigation into the market for interest rate derivatives, including the Euribor, with regard to Credit Agricole SA and several Swiss and international banks.
BNP Paribas was the third most active issuer in France with a market share of 16%. The bank achieved sales of €504m from 21 structured products, according to SRP data (1Q 2016: 25 products / €464m). BNP Paribas also acted as the issuing party for Crelan and Deutsche Bank in Belgium; Alexandria Pankkiiriliike and SIP Nordic in Finland; Wealth Options and Cantor Fitzgerald in Ireland; Erik Penser, Exceed, Garantum, SIP Nordic and Strukturenivest in Sweden; and Meteor Asset Management in the UK. The bank issued more than 48,500 leverage and flow products, mainly in Germany, of which the majority were turbos certificates.
BNPP reported revenues for Corporate and Institutional Banking (CIB), at €3.2bn, were up by more than 20% compared to the first quarter of 2016. Global Markets' revenues, at €1.8bn, were up sharply compared to 1Q 2016 (+33.1%) with a significant pick-up in client business compared to a very challenging market context at the beginning of the year 2016, according to the bank.
The revenues of FICC (€1.2bn) were up by 31.9% compared to the first quarter 2016 with strong growth of rates, a good performance of forex and commodities as well as a solid rise of credit and bond issues. At €580m, the revenues of the Equity and Prime Services business were up by 35.5% with strong growth of Prime Services and a rebound in the derivative business.
Natixis had a share of 13% of the French market during the first quarter. The bank acted as bond provider for 22 products (€407m) including offerings distributed via Banque Populaire Gestion Privée, Banque Privée 1818, Derivatives Capital, Equitim, Hedios Vie and Irbis Finance. The majority of Natixis' products were linked to the Cac Large 60 Equal Weight Excess Return Index which comprises the 60 largest French stocks by market capitalisation and is part of the bank's market access indices family. Outside France, Natixis was especially active in the UK where it was the issuing party for 14 products which were sold through Mariana Capital (one product), Market Securities (two) and Meteor Asset Management (11). In Belgium the bank issued Deutsche Bank's Australian dollar denominated Fund Opportunity Coupon AUD 2023 while in Italy Natixis was involved in five phoenix certificates listed on the Italian Stock Exchange.
Natixis reported brisk activity in insurance with an overall turnover of €3.3bn in 1Q 2017, up 84% from the same period in 2016 while assets under management (AUM) were up to €837m at the end of March 2017, with net inflow amounting to €5bn. CIB reported stronger momentum in global markets were net revenues were up 387% versus 1Q 2016, including increases of 36% for fixed income, commodities & treasury (FICT) and 42% for equity.
Net revenues from equity derivatives climbed 48% year-on-year while international platform revenues were up 32% year-on-year, according to the bank.
Amundi claimed a market share of 27% from 11 products worth €860m in the first quarter of 2017. The products were issued via Amundi Finance Emission, LCL Emission, DNA and Amundi Issuance, as well as structured funds guaranteed by Amundi Finance. Amundi's products were distributed via Credit du Nord, LCL, Societe Generale, as well as via Credit Agricole's external banking networks. The asset manager's offering included LCL Latitude Vie 2017, an autocallable which collected €238.4m during the subscription period, making it the best-selling French product during 1Q 2017.
Amundi reported AUM amounted to €1.1bn as of March 31, 2017, reflecting good business activity (net inflows of €32.5bn in the first quarter) and a positive market effect (€12.5bn) owing to more favourable market conditions. Net inflows for exchange-traded funds (ETFs), at €4.2bn, were high while for real, alternative and structured assets, net inflows were negative owing to the end of an asset backed securities (ABS) portfolio management mandate for the ECB (€6.9bn), which took the management of this portfolio back in-house, according to Amundi. However, excluding the impact of this mandate, net inflows on this asset class were positive, the asset manager said.
Click the link to view the full first quarter 2017 results for Amundi, BNP Paribas, Credit Agricole, Natixis and Societe Generale.
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