The bank-insurer held a 41% share of the Belgian structured products market as it continued its constant focus on sustainability.
Belfius has posted a net result of €406m for the first six months of 2021, much higher than in H1 2020 (€21m). Some €290m was contributed by the bank, and €116m was contributed by the insurer.
Sustainability was at the core of all the major strategic initiatives launched by Belfius over the first semester 2021. In June, it launched Belfius Equity Move, its fifth fund of the future, which invests in companies active in cleaner, safer and smarter mobility. So far, it has issued two structured products that are part of this portfolio, including Belfius Financing Company (LU) Move 95 10/2027, which started its subscription period on 2 Augusts 2021 and offers 100% participation in the Solactive Move PR Index, capped at an overall maximum return of 112%.
Over the past two years it has launched funds dedicated to four other society-related themes: Belfius Equities Cure (dedicated to oncology), Belfius Equities Climate (environment), Belfius Equities Wo=Men (to promote gender equality), and Belfius Equities Be=Long dedicated to happy and healthy longevity. As of June 2021, these funds had already attracted €1.5 billion, including approximately €500m from structured products, generating total contribution to charities of €1.2m since the launch in 2019.
Unit-linked products within Belfius’ insurance activities (Branch 23) increased by 10.9%, to €4.2 billion (31 December 2020: €3.8 billion), mainly resulting from positive fair value adjustments and transfers of customer investments from Branch 21 policies coming to maturity.
Belfius was the number one issuer in Belgium with a 41% share of the country’s structured product market in half-year 2021, according to SRP data.
It issued 25 structured products worth €292m in H1 2021 – an average of €11.7m per product (H1 2020: €680m from 42 products – €16.2m per product). Of these, 19 were medium-term notes (MTNs) (€236m) while six structures carried the unit-linked Branch 23 wrapper (€56m).
The bulk of the sales volumes (€203m) came from products tied to a single equity index, including offerings linked to the Eurostoxx Select Dividend 30 (€47.7m from six products), Solactive Ageing Population Europe Index (€53.5m from four products), and iStoxx Europe ESG Climate Awareness Select 50 (€22.4m from two products).
However, the bank-insurer’s best-selling product in the semester was linked to the constant maturity swap rate (CMS). The 10-year Belfius Financing Company (LU) Callable Interest 06/2031, which collected €29.7m in April/May, pays a fixed coupon of 0.60% pa during the first five years of investment. The following years, the annual coupon is equal to the difference between the CMS 30-year EUR and the CMS 2-year EUR.
Belfius’ best-performing product in H1 2021, Belfius Financing Company (LU) Optimal Performance 7, returned 149.3% after five-years, or 8.34% pa. It was linked to the Eurostoxx 50 and sold €11m at inception.
Belfius issued its inaugural green bond in May 2021, with an issuance of €500m.
Assets on the consolidated interim balance sheet included debt securities and equity instruments of which the Belfius Banking Group contributed €17.2 billion (31 December 2020: €17.3 billion) and the Belfius Insurance Group contributed €11.1 billion (31 December 2020: €11.6 billion).
Derivatives decreased by 20%, to €9.8 billion (31 December 2020: €12.2 billion), mainly due to the impact of higher interest rates.
During H1 2021, the bank has placed a total funding amount of €4.6 billion short-term and €1.5 billion long-term notes (allocated amount).
Click the link to read the full Belfius half-year report and alternative performance measures (APM).