The bank has posted a record-high sales volume of structured products at US$3.27 billion in the first quarter of FY21 ended in March in the US following a rebound in issuance.

J.P. Morgan Chase’s issuance of structured products at the end of Q1 2021 experienced a 15.5% increase year-on-year. This makes the US investment bank the fourth largest group issuer in the US with a market share of 12.5% after Morgan Stanley (US$3.77 billion), Barclays (US$3.48 billion) and Goldman Sachs (US$3.46 billion), SRP data shows.

On a quarterly basis, the number of structured products brought to market rose by 44.2%, lifting the overall sales by 80.7%.

The distributor ranking narrowed from 11 to five compared with Q1 FY20 with J.P. Morgan Chase Financial (937 products) leading the pack followed by J.P. Morgan Chase (134), UBS Financial Services (48), Morgan Stanley Wealth Management (45) and Goldman Sachs Private Banking (40).  

New entrants to the top distributors table not seen in Q1 FY20 include First Trust Portfolios, Raymond James, Incapital, FISN, Wells Fargo and Citigroup Global Markets, which distributed 420, 53, 43, five, two and one product(s), respectively.

Traditional knockout structures replaced the worst of option as the most common payoff on the back of 580 products in Q1 FY21 YoY while the number of reverse convertible notes increased to 577 from 353, SRP data shows.

Some payoffs deployed in a few products by the bank in Q1 FY20 were absent in Q1 FY21 including rainbow, fixed upside, cliquet and sharkfin.

By underlying, the Eurostoxx 50 index was replaced by the Nasdaq 100 in Q1 FY21 as the third most used underlying by issuance while the S&P 500 and Russell 2000 retained their dominance. Other underlyings such as the ARK Innovation ETF and iShares Global Clean Energy gained significant traction featuring in 101 and 38 products, respectively, while the S&P Economic Cycle Factor Rotator Index was dropped.

In Brazil, J.P. Morgan Chase issued three certificados de operações estruturadas between January and March with an average tenor of 5.5 years. Distributed by XP Investimentos, the three products are linked to the performance of the JP Morgan 10% VT on MSCI Future Education Index.

Earnings

The bank led by Jamie Dimon (pictured) reported a net income of US$14.3 billion in Q1 FY21, up 18% quarter-on-quarter (QoQ) or a four-fold increase YoY. Its net revenue reached US$33.1 billion, up 10% QoQ or up 14% YoY mainly due to lower rates.

The corporate & investment bank (CIB) reported an increase in equity markets revenue by 47% to US$3.3 billion ‘driven by strong performance across products’ while fixed income markets revenue grew 15% YoY.

In the meantime, expenses rose 12% to US$18.7 billion YoY partly because of a US$550m contribution to the J.P. Morgan Chase Foundation in the form of equity investments.

On-balance sheet, the US investment bank recorded derivatives receivables amounting to US$73.1 billion as at the end of March, down eight percent QoQ or 10% YoY, and US$60.4 billion in derivatives payables, down 14% QoQ or seven percent YoY. 

Click here to read J.P. Morgan Chase’s Q1 FY21 results.