The Mexican financial group continues to rank as the most prolific issuer group in its domestic structured products market.
Monex Grupo Financiero recorded MXN53.2 billion (US$2.6 billion) in sales across 1,126 products during the third quarter of 2021, compared with MXN45.8 billion for 1,096 products in the previous year.
SRP data shows that Monex has consistently held on to the top spot on the league tables over the past year, reaching MXN49 billion (960 products) in sales volumes during the final quarter of 2020.
This figure then increased by 15% in the first quarter of 2021 with sales amounting to MXN56.4 billion (973 products), which later decreased to MXN44.6 billion (965 products) in Q2 21.
Other top ranking issuer groups in the Mexican market in Q3 21 were BBVA (578 products/MXN 35 billion), Citi (17 products/MXN 3.2 billion), Scotiabank (four products/MXN 332m), and Santander (seven products/MXN 297m).
All the products issued by Monex track the USD/MXN currency pair. The best-selling structure for the third quarter was the Double No Touch - USD/MXN - 1.2% pa which matured on 6 August, 2021.
Selling for MXN570m, the bank deposit certificate has a digital and range payoff types and tracks the USD/MXN exchange rate. The two barriers considered are 19.87 and 20.09. If neither barrier is breached during the investment period, the investor will receive 100% capital return plus 1.2% pa coupon at maturity.
Other payoff types used by Monex during Q3 21 include range (571 products/US$1.8 billion), digital (562 products/US$1.7 billion), dual currency (522 products/US$793m), accrual (40 products/US$188m), and capped call (two products/US$0.6m).
About US$1.8 billion in structured products were wrapped as bank deposit certificates while US$793m account for structured bonds.
According to Damian Vera (pictured), sub-director of derivatives sales at Monex, dual currency deposits continue to have big demand on the clients and while the lower volatility in the USD/MXN impact in the rates offered, it also makes them less risky for clients.
“The low interest rates we had during last year and the beginning of this year made clients look for products like the ones we issue to try to enhance their portfolios, and even though the interest rate in MXN have been increased twice in this quarter by our central bank clients have kept renewing their positions looking for better results,” he said.
Business lines
Monex has reported a net income of MXN1 billion in the first nine months of 2021 and MXN6.8 billion in total operating revenues, representing an increase of 2% compared to the same period in 2020.
Total operating revenues as of the end of September 2021 consist of domestic foreign exchange operations (40%), foreign exchange operations from international subsidiaries (21%), credit and deposits (10%), and securities brokerage and trading services (8%).
Foreign exchange operations in Mexico reported MXN2.7 billion in revenue at the end of the third quarter of 2021, an increase of 6% compared to the prior-year period.
Credit and deposits generated MXN678 billion in revenue during the first nine months of 2021, which represents an increase of 45% compared to the same period in the previous year.
Trust services reported MXN257m in revenue at the end of September 2021, an increase of 12% from the prior-year period.
Click in the link to view the bank’s earnings release.