Banorte, known as the Strongest Bank in Mexico (Banco Fuerte de Mexico), has launched its first structured product for Mexican retail investors for five years.
"After putting our structured CD programme in place, Banorte is now planning on starting a new structured bond programme of up to MXN5bn ($394m) in mid-2013," Francisco Xavier Garcia Aleman, manager of structured products at Banorte, told SRP. "Our main focus will be interest rate and FX rate issuances with terms over one year long."
The Double No Touch Peso/Dollar - 5.6% pa - 30 January 2013 raised MXN36.378m ($2.88m) during its offer period. At maturity, the 28-day product offers the capital invested alongside a 5.6% pa coupon if the exchange rate remains between 12.45 and 13.05 throughout the applicable observation period. Otherwise the product returns capital.
Banorte, which has a track record of more than 100 years in the Mexican banking sector, has not been a very active player in the structured products market. SRP data shows that it marketed two structured certificates of deposit (CDs) for retail investors back in 2008.
Garcia Aleman added that the bank spent two years setting up the management and structuring (Murex) line-up before launching these programmes.
"This is a first step Banorte has taken to position itself in the market for derivatives and structured notes in Mexico," he said.
The Mexican market has grown from a notional value of MXN2bn ($157m) in 2009 to over MXN8bn ($630m) in volume in 2012, and is seeing a remarkable increase in competition among the local providers.
With the addition of Banorte, there are now eight active providers in the market, including BBVA Bancomer, Banco Santander, Monex, HSBC, Scotiabank Inverlat, and Actinver.