The Swiss bank has issued 360 structured products in the US market during the third quarter of 2021 valuing US$1.2 billion, compared with 480 products totalling US$1.6 billion in the same period a year prior.

The bank’s activity was inconsistent in 2021 with sales slipping to US$1.4 billion (442 products) in the fourth quarter of 2020 and subsequently increasing by 6% in Q1 21. The second quarter of 2021 saw a steep decline in structured product activity with sales standing at US$697m (221 products) at the end of the quarter. 

However, Credit Suisse’s Q3 21 sales volumes signal a 72% jump from the previous quarterly period despite a drop in product issuance (360 products/US$1.2 billion).

SRP data shows that the bank ranks in the top 10 issuer group leagues in Q3 21 trailing behind market top dogs such as Citi (US$3.4 billion/1,051), Goldman Sachs (US$3.2 billion/901), J. P. Morgan (US$2.9 billion/1,191), and Barclays (US$2.7 billion/602).

Credit Suisse has boosted its structured product issuance tied to hybrid asset classes by 67% in the third quarter with sales standing at US$54m (26 products), compared to US$32m (eight products) in the same period of 2020.

The best-selling hybrid product for the quarter was the Buffered Accelerated Return Equity Securities - Worst of Option (22552XSP9). Selling for US$8m, the growth product was distributed by First Trust Portfolios and tracks the Eurostoxx 50 and iShares MSCI EAFE ETF indices.

Brazil

Credit Suisse issued 11 structured products in the Brazilian market worth BRL 90.8m (US$16.6m) in Q3 21 which is a 44% drop from the same period a year ago (13 products/ BRL 160m (US$29.6m).

All products were tied to proprietary indices of which four track the Credit Suisse Digital Health Fund Index, four track the CS Global Video and eSports 20% Risk Control Index, and three are linked to the performance of the Credit Suisse Balanced Trend 5% Index.

The best-selling structure for the period was the CS Índice Balanced Trend 5% Index - Alta Alavancada - 3 anos. Distributed by BTG Pactual, the certificate of structured operations (COE) has an enhanced tracker payoff type and will reach maturity in three years. The growth product is tied to the CS Balanced Trend 5% Index.

Europe

The bank issued a total of 123 non-flow structured products in the European market during Q3 21 worth an estimated US$229m, mostly concentrated across the German, Belgian, French, and Italian markets.

This represents a fall in issuance of more than 60% and a decrease in sales of over 25% year on year, as well as a 65% fall in issuance and 25% in sales compared to the previous quarter (364 products/ US$306m).

Most of the products sold in Europe are wrapped as investment certificates, medium-term notes, and investment certificats. Popular asset classes are equities (single index, single share, and share basket), funds, and hybrids with the Eurostoxx 50, Allianx, AXA, Daimler, and FTSE France 40 Low Carbon ESG Screened Decrement 50 Points Index, appearing as the omst featured underlyings on Credit Suisse’s products.

Business Lines

For the third quarter of 2021, Credit Suisse reported net revenues of CHF5.4 billion (US$), a 5% increase from the same period of 2020.

Net income attributable to shareholders fell by 21% this quarter to value CHF434m from CHF546m while reported pre-tax income is up by 26% year-over-year.

Wealth management-related businesses reported net revenues of CHF3.3 billion, up three percent year on year while net revenues were up by four percent.

Net interest income was down by four percent, impacted by lower deposit and loan margins, reflecting a reduction in risk appetite and deleveraging by clients, primarily in Asia Pacific.

The investment bank segment recorded net revenues of US$2.5 billion, an increase of 10% year on year despite continued discipline in risk and capital management with reductions to RWA and leverage exposure in Prime Services.

Adjusted net revenues were up nine percent driven by strong client activity across capital markets, M&A and equity derivatives.

‘Wealth Management businesses returned to robust net new assets and higher transaction revenues sequentially, while recurring commissions & fees and client business volumes demonstrated strong year on year momentum,’ said Thomas Gottstein, chief executive officer at Credit Suisse.

Click to view the bank’s earnings release.