Asian banks were in the spotlight this past week, as was the market response to new rules regulating the Russian structured product market.
Ping An Bank has posted a 2.6% increase of net profit at CNY28.9 billion (US$4.5 billion) in the 2020 year-on-year (YoY) despite the continued fall of structured deposits issuance, while its new subsidiary, Ping An Wealth Management, derived a net profit of CNY165m. The bank’s retail business remains the main driver of net profit, making up 61.1% while the wholesale business represents 14.1%.
Over in Japan, Nomura’s wholesale business posted pre-tax income of JPY76.9 billion (US$730m) in Q3 FY20/21 ended in December 2020, up 17% quarter-on-quarter (QoQ) or 78% YoY, as derivatives drive equities revenues growth. The bank’s quarterly income, which reached the fifth highest level in 19 years, led to accumulated pre-tax income of JPY230.2 billion in the first nine months of FY20/21, a 1.8x increase YoY. This translates to 65.9% of the total generated from wholesale, retail and asset management. Net revenue rose by one percent to JPY223.1 billion QoQ or up 20% YoY – 84% from global markets and 16% from investment banking.
Mitsubishi UFJ Morgan Stanley Securities, one of the most active providers in the country’s structured product market, have benefited from a rebound in sales of structured bonds. Net trading income of Mitsubishi UFJ Financial Holdings has increased by 11% to JPY136.1 billion (US$1.29 billion) in the first nine months of FY20 ended in December 2020 YoY despite little growth in Q3. Equity and fixed income derivatives bolstered revenues due to the redemption and sales of structured bonds. The equity business, which accounted for 35.1% of the net trading income, recovered as a result of ‘the redemption flow of structured bonds in line with rising stock prices’ driven by retail and middle markets.
It kept top managers of big investment houses busy on the New Year’s Eve
In people moves news, Fabien Labouret, global head of equities structuring and Barclays Investment Managers, in London, has left the UK bank. He joined Barclays investment bank (formerly Barclays Capital) as European head of structuring in 2010. Based in London he reported to Hassan Houari, now Managing Director at Tramontana Asset Management and former head of equity derivatives structuring at Barclays and head of sales Emea at Deutsche Bank until 2015.
Clément Florentin, at Credit Suisse, has taken up a newly created role of co-global head of QIS distribution structuring, Asia ex-Japan, in addition to his existing position as head of investment solutions structuring, Asia ex-Japan, a bank spokesperson told SRP. Dutch market maker and proprietary trading firm Optiver has appointed former Goldman Sachs derivatives sales trader Leaf Wade as an institutional trader with responsibility for growing the market maker’s London-based business dedicated to institutional investor clients.
One jurisdiction that SRP doesn’t cover a lot is Russia. But this week’s news has seen brokers comment on the recent move by the country’s Central Bank to restrict the sale of derivatives and structured products to non-qualified investors by financial intermediaries. Anton Plyasunov, head of Structured Products Factory at Otkritie, said: “it kept top managers of big investment houses busy on the New Year’s Eve and halted sales of any investment product with structured component to non-qualified retail investors in the whole country.”
Société Générale has offered investors who bought structured products linked to Finvex indices continuity by providing proprietary indices built by the bank on the genuine methodology of the original indices. The move comes after Solactive, which took over the calculation of the Finvex indices a year ago, decided to discontinue the indices in December 2020.