Credit Suisse and UBS are two of the main providers of structured products, not just in their domestic market Switzerland but globally. Between them they racked up estimated sales of US$4.7bn from more than 1,500 products (excluding leverage and flow) in the first quarter of 2017, up from $4.2bn (900 products) during the same period in 2016. Both banks achieved their highest sales in the USA where $2.5bn was collected from 1,100 products in the quarter.

SRP reviews the data and financial results of the two Swiss investment banks for 1Q 2017.

Credit Suisse issued 492 structured products with estimated sales of US$2.8bn during the first quarter of 2017, up from 414 products worth $2.5bn, during the same period in 2016, according to SRP data. The products, which include non-retail but are excluding leverage and flow, were sold world-wide across 13 jurisdictions including, among other, Belgium, Japan, Sweden, Switzerland, Taiwan, UK and USA.

The majority of 1Q 2017 sales volumes were gathered in the USA where the bank sold 291 products worth $1.7bn (1Q 2016: 278 products / $1.3bn). In Europe, Credit Suisse issued four products in Belgium ($30m), which were distributed via Crelan and Deutsche Bank, respectively; 19 products ($23m) in Sweden via Carnegie, Exceed, Garantum, Mangold, SIP Nordic and Strukturinvest; and 84 products, predominately certificates, worth an estimated CHF326m ($328m) in its domestic market Switzerland.

In the Asia-Pacific region, the bank issued 12 products ($317m) in Japan via seven different providers including 82 Securities, Chugin Securities, Daiwa Securities, Imamura Securities, IwaiCosmo Securities, Kagawa Securities and Monex while 33 structured notes ($44m), mainly private placements, were distributed in Taiwan, including seven Memory Notes distributed via E Sun Bank.

Credit Suisse reported net revenues of CHF5.5bn in the first quarter of 2017, an increase of 7% quarter-on-quarter, primarily reflecting higher net revenues in Global Markets, and an increase of 19% compared to 1Q 2016.

In 1Q 2017, solutions revenues of CHF262m were stable compared to 4Q 2016, as improved global macro products and emerging markets revenues were offset by lower equity derivatives revenues, according to the bank. Global macro products revenues increased, reflecting higher rates and foreign exchange results. The bank also reported higher emerging markets revenues driven by an increase in structured products revenues. These gains were offset by lower equity derivatives results as low levels of volatility led to reduced client activity.

Compared to the first quarter of 2016, solutions revenues decreased 24%, as reduced client activity in equity derivatives and global macro products more than offset a rebound in emerging markets revenues. Global macro products revenues declined compared to a strong 1Q 2016 performance, primarily due to Credit Suisse's reduced issuance of structured notes.

In addition, equity derivatives revenues declined as reduced client activity in corporate and flow derivatives offset improved structured derivatives and convertibles performance. These declines were partially offset by a substantial increase in emerging markets revenues, albeit from subdued 1Q 2016 levels, reflecting higher trading activity in Brazil and improved financing revenues, according to the bank.

Year-on-year, net revenues decreased 41%, due to lower fixed income and equity sales and trading revenues. Fixed income sales and trading revenues decreased 74%, mainly driven by lower revenues from developed markets rates products and foreign exchange products reflecting lower client activity, partially offset by higher revenues from credit products. Equity sales and trading revenues decreased 16%, mainly due to lower revenues from equity derivatives, primarily driven by reduced market volatility in China and emerging markets, partially offset by reduced losses from systematic market making.

'We have had a strong start to 2017, achieving profitability both on a reported and an adjusted basis for the Group,' said Tidjane Thiam (pictured), chief executive officer, Credit Suisse, in a statement. 'We are making good progress in our strategy of being a wealth manager with strong investment banking capabilities.'

UBS was the issuing party behind 1,079 structured products with estimated sales of $1.8bn during 1Q 2017, significantly up from the 457 products ($1.7bn) that were issued during the same period in 2016, according to SRP data. In the US, where the bank was the most prolific issuer (by issuance) in the first quarter, UBS collected sales of $744m from 809 structured products (1Q 2016: 215 products / $346m) while in its home market Switzerland, the bank issued 131 core products (mainly reverse convertibles) worth an estimated CHF374m (1Q 2016: 120 products / CHF317m).

In Germany, where the bank's main focus lies with leverage and flow products, the bank listed more than 5,100 turbos in the first quarter of 2017 - both on the Frankfurt and Stuttgart exchange - down from 16,000 turbos in 1Q 2016 . During the quarter UBS also issued more than 5,000 flow products, mainly bonus-, and discount certificates (1Q 2016: 7,900).

Other markets were UBS was active in the first quarter include Australia (seven products), Finland (two), Japan (three), Luxembourg (six), Norway (two) and Sweden (nine).

UBS reported net profits in 1Q 2017, at CHF1.3bn, were up 79% year-on-year.

In wealth management profit before tax increased by CHF82m, or 15%, to CHF639m and adjusted profit before tax increased by CHF91m to CHF727m, reflecting both lower operating expenses and higher operating income.

Net new money from ultra-high net worth clients was CHF12.2bn in the first quarter of 2017, compared with CHF13.3bn in the same period last year. Invested assets increased by CHF46bn to CHF1,023bn, mainly due to positive market performance of CHF34bn and net new money of CHF19bn, partly offset by negative foreign currency translation effects of CHF6bn. Discretionary and advisory mandate penetration increased to 27.8% from 26.9%, according to the bank.

Click the link to view the 1Q 2016 reports for Credit Suisse (earnings release and presentation) and UBS (financial report and presentation).

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