CS structured products business grows despite EU dip  

Credit Suisse issued 113 products with estimated sales of €45m in Europe during the fourth quarter of 2020, significantly down from 324 products worth €360m in the prior year period, according to SRP data.

Sales volumes and issuance gradually decreased throughout 2020, reaching a low in Q4 20. The bank had already suffered a steep fall between the second and third quarters of 2020, when sales went down from €368.7m (from 355 products) to €107.3m (from 183 products). 

Americas

The Swiss bank has grown its presence in Brazil through its proprietary and custom index offering across the gaming and e-sports sector while stepping-up COE issuance during FY2020.

Credit Suisse has established a dominant footprint in the Brazilian market by increasing its sales of COEs to an estimated US$77m with an issuance of 47 products, according to SRP data. This can be compared with a slightly higher issuance of 50 products in FY2019 with a lower sales figure of US$38.9m.

The majority of the products sold in Brazil were linked to the CS Global Video Gaming and eSports 20% Risk Control Index which raised a total sales volume of about US$42.3m. Each product featured a maturity of about five to seven years and were periodically issued throughout the year.

In 2019, no structured products issued by Credit Suisse were linked to the CS Global Video Gaming underlying. However, the Credit Suisse Digital Health Fund Index was the most popular underlying with a total of 31 products worth US$19.7m.

In 2020, the Credit Suisse Digital Health Fund Index was the second most popular underlying was with 19 products valued at around US$32.7m.

Most of the COEs were distributed by XP Investimentos (45/est. US$75m), the well-known subsidiary of Brazilian investment firm XP Inc.

US

In the US, Credit Suisse was one of the top 10 issuers during the fourth quarter of 2020 with an issuance of 441 structured products valued at US$1.3 billion. The bank was able to maintain this position during the entire year with a total product issuance of 1,842 worth US$5.9 billion.

The bank’s issuance in the US market was choppy during the year with a record high in Q1 20 of 617 products worth US$1.9 billion. This figure plummeted in the following quarter by more than 50% to 304 products with a sales volume of US$1 billion as the impact of the pandemic was felt across quarters.

Issuance swiftly picked up in Q3 20 along with the bank’s sales volume which  remained steady during the final quarter.

Barclays was the most prolific issuer group during FY2020 with 2,068 products valued at US$10 billion with Goldman Sachs (3,009/US$8.6 billion), Citi (2,772/US$8.5 billion), Morgan Stanley (2,599/US$8.4 billion), and JPMorgan (3,888/US$8.1 billion).

Apac

Credit Suisse also grew its international footprint by ranking as one of the most popular issuers in 2020 across the Apac market with 2,837 structured products totalling a sales volume of US$10.1 billion.

This can be compared with its much smaller issuance of just 114 products in 2019 with a sales figure of US$680m.

Heading up the league table in terms of sales is Hang Seng Bank with 3,246 products valued at US$58.5 billion, HSBC Bank with 3,588 products worth US$57.7 billion, China Merchants Bank with 1,175 products worth US$20.8 billion and Agricultural Bank of China with 1,179 products valued at US$18.9 billion.

The bank has 4,540 live structured products in the SRP database listed in the Apac market.

Earnings

The bank’s pre-tax income totalled CHF3.5 billion (US3.9 billion), a decrease of 27% year-on-year while net income attributable to shareholders also declined by 22% to CHF2.7 billion.

Net revenues of CHF22.4 billion remained flat year-on-year, although total operating expenses of CHF17.8 billion were up by two percent, driven by litigation provisions and restructuring expenses.

The global investment banking segments delivered a strong performance with revenues of US$ 10.2 billion being boosted by 19% year-on-year, with fixed income sales & trading increasing by 26%, equity sales & trading following suit by 12%, and capital markets & advisory, by 31%.

Wealth Management-related business activity was driven by increased transaction-based revenues. On a reported basis, total net revenues of CHF13.6 billion were down eight percent year-on-year, with higher transaction-based revenues, climbing by three percent.

Risk-weighted assets stand at CHF275 billion, representing a four and five percent decrease from the same quarter and year period, respectively.

“Despite a challenging environment for societies and economies in 2020, we saw a strong underlying performance across Wealth Management and Investment Banking, while addressing historic issues,” said CEO Thomas Gottstein (pictured).