UBS structured products sales treble YoY

UBS AG London Branch has traded US$3.3 billion notional from 1,353 structured notes registered with the US Securities and Exchange Commission (SEC) in the second quarter of 2024, according to SRP data.

This amount reflects a 1.4% decline quarter-on-quarter (QoQ) compared to larger peer issuers, including J.P. Morgan, Goldman Sachs and Citigroup, which posted respective quarterly falls of 11.6%, 4.8% and 4.0%.

However, year-on-year (YoY) UBS' structured products sales volume were up 61.7% at the end of Q2 24. The Swiss bank recorded strong momentum this year compared to the year of 2023 and 2022.

UBS: sales & issuance of SEC-registered structured notes

_{Source: SRP}

The registered structured note market saw a total of US$33.0 billion principal traded for the period April to June, showing a stable level QoQ, but up 33% YoY.

UBS remained well established in the US league table for the second quarter of the year, taking the fifth place by sales volume, after J.P. Morgan (US$4.6 billion,13.9%), Goldman Sachs (US$4.0 billion,12.1%), Barclays (US$3.6 billion,10.9%) and Citigroup (US$3.323 billion, 10.1%).

By sales volume per issuance, the Digital Index-Linked Notes - S&P 500 (90307DFW7), traded on 22 April was the best-seller during the three months with US$60.9m notional. The two-year principal-at-risk note was distributed by Goldman Sachs via iCapital Markets, a broker-dealer affiliated with the US bank.

UBS: five best-sellers of registered structured notes in Q2 2024

Product name	Initial valuation date	Sales volume (US$m)
Digital Index-Linked Notes - S&P 500 (90307DFW7)	22/04/2024	60.9
Trigger Callable Contingent Yield Notes - Worst of Option (90304K695)	03/06/2024	43.1
Digital Basket-Linked Notes (90307DKB7)	01/05/2024	42.4
Trigger Autocallable Contingent Yield Notes - NVIDIA (90304K745)	07/06/2024	38.3
Contingent Income Auto-Callable Securities with Memory Coupon - Blackstone (90307DBL5)	12/04/2024	37.9

_{Source: SRP}

The Trigger Callable Contingent Yield Notes - Worst of Option (90304K695) linked to the S&P 500, Russell 2000 and Nasdaq 100 was the runner-up in Q2 with US$43.1m traded notional. The product offers a daily coupon observation with UBS Financial Services acting as the dealer.

Next in line is the Digital Basket-Linked Notes (90307DKB7), which amassed US$42.4m notional with a two-year tenor – the product is linked to the performance of the FTSE 100, Swiss Market Index and Eurostoxx 50. It was distributed by iCapital Markets.

In terms of underlyings, single stock and index baskets were almost equally used by UBS during the quarter with over US$1 billion in sales raised by each underlying type during the relevant period.

Single index accounted for US$513m, or 15.4% of the total, while hybrid assets formed US$240m, or 7.2% of the total. The remaining are tied to exchange-traded funds (US$224m, 6.7%), commodity (US$113m, 3.4%) and baskets of stocks (US$67m, 2.0%).

Across the globe, UBS’ issuance in the second quarter of 2024 also included 14 SEC-registered callable fixed rate notes with combined notional of US$22.7m in the US; 18,139 structured products in its home market Switzerland; 5,433 listed turbos in Germany or Austria; 1,430 listed structured products in Hong Kong SAR; 664 structured notes in Taiwan. The Swiss bank was also active in France (50), Italy (25), Sweden (five), South Africa (four) and Finland (one).

Earnings

UBS AG reported a net profit of US$1.1 billion ‘with continued client momentum and integration progress’ for Q2 2024 as net new assets reached US$27 billion in global wealth management and strong transactional activity in the investment bank.

Global markets recorded best second quarter in terms of revenues while underlying global banking revenues increased 55% YoY, ‘significantly outperforming the fee pools across all products’.

‘We are well positioned to meet our financial targets and return to the levels of profitability we delivered before being asked to step in and stabilise Credit Suisse. We are now entering the next phase of our integration, which will be critical to realize further substantial cost, capital, funding and tax benefits,’ said Sergio P. Ermotti (pictured), CEO of UBS AG.

At investment bank level, underlying profit before tax came to US$412m compared to a loss of US$14m in the prior-year quarter as revenues increased 26% to US$2.5 billion.

Global markets revenues grew 18% to US$1.8 billion YoY. By unit, derivative & solutions revenues were 30% higher than the prior-year quarter driven by equity derivatives, foreign exchange (FX), credit and rates. Meanwhile, execution services revenues grew 23% to US$405m led by cash equities, primarily in the US.

Click the links to access UBS AG’s Q2 2024 earnings report and presentation.  

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