The UK bank sold structured products in only two markets during a third quarter which was impacted by a 'lower contribution from equity derivatives', according to Tushar Morzaria (pictured), finance director.

Barclays has generated an attributable profit of £1.2 billion (US$1.55 billion) in the third quarter. Income, at £5.5 billion was up eight percent from the prior year quarter, driven by a 17% increase in corporate and investment banking (CIB).

In CIB, fixed income, currencies and commodities (FICC) increased by 19%, mainly due to a strong performance, particularly in rates and securitised products.  Equities increased by five percent, despite a lower contribution from equity derivatives, which were impacted by ‘reduced client activity’, according to the bank.

Barclays Bank had 10.4% share of the US market in 3Q 2019, third behind JP Morgan Chase (15.6%) and Goldman Sachs (14.7%), according to SRP data. The bank sold 420 structured products worth US$1.6 billion in the third quarter, an increase – both in issuance and sales – from the 367 products with a combined volume of US$1.2 billion that were issued by the bank in the equivalent quarter last year.

The products were distributed via, among others, First Trust Portfolios, Incapital, Raymond James and UBS. Almost 50% of the sales in the quarter, at US$757m, came from 254 products tied to a basket of indices while a further US$607m was collected from 131 structures linked to a single index.

Barclay’s best-selling product in the quarter was the Autocallable Market-Linked Step Up Note (06747C3147), which participates 100% in the S&P 500 and sold US$78.3m during the subscription period. The securities can be redeemed early – annually – if the index closes at or above 2,977.6 points on the valuation date. In that case the product offers 100% capital return plus a coupon of 6.32% per year elapsed.

Japan was the only other market where Barclays was active in 3Q19. The bank collected US$118.2m from 14 products in the period, a decrease from US$176.8m (seven products) in the prior-year quarter.

The products were predominately linked to equities and distributed via seven different securities’ firms, including Hokuyo, Rakuten, SBI, Shizugin TM and 82 Securities. The latter was responsible for KI M20220927, a three-year unlisted registered note linked to the Nikkei 225 and S&P 500, which, at US$28.8m, achieved the highest sales in the quarter.

Wholesale funding outstanding, excluding repurchase agreements, was £162 billion (December 2018: £154 billion). The group issued £8.2 billion equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments year-to-date from Barclays PLC, the parent company.

Click the link to view the Barclays 3Q2019 results, presentation and management speech.