The Swiss bank has seen its issuance and sales of structured products in Europe falling by 90%, respectively, over the last year.

Credit Suisse’s sales volumes in the European market have plummeted with issuance standing at 42 products worth €27m (US$33m) in Q1 21 from 426 products valued at €392m recorded in Q1 20.

The bank’s sales and volumes followed a downward trend throughout 2020, reaching a low at the end of the year after a fall of 70% in sales and 48% in issuance - from €368.7m (from 355 products) to €107.3m (from 183 products) between the second and third quarters of 2020, when sales went down.

Credit Suisse’s presence in the US market has remained steady in recent months with 486 structured products (US$1.5 billion) issued in Q1 21, compared with 441 products worth US$1.4 billion in the fourth quarter of 2020.

The bank’s overall US volumes have drastically dropped since Q1 20 where issuance totalled 617 products valued at US$1.9 billion.

The Swiss bank has maintained a larger footprint in the Apac market despite a 42% fall in issuance and 47% fall in sales having issued a total of 1,072 structured products worth US$951m in Q1 21, compared with 1,850 products valued at US$1.8 billion during the same period of 2020.

Brazilian focus

The Swiss investment bank increased its Brazilian structured product sales in the first quarter of 2021 to BRL 146m (US$26.5m) across 13 products from 11 valued at BRL 102m in the same period a year prior.

The firm’s issuance throughout 2020 remained steady until the third quarter after which sales soared to BRL 150m with 13 products. Volumes dropped to BRL 139m in the following quarter while issuance slightly decreased to 12 products.

 

SRP data shows that the structured products issued by Credit Suisse during Q1 21 were all tied to proprietary underlyings that include the CS Global Video Gaming and eSports 20% Risk Control Index, Credit Suisse Digital Health Fund, and Credit Suisse Balanced Trend 5% Index.

Most of the bank’s live structured products in Brazil are currently linked to the CS Digital Health Fund signifying an anticipated rise in investors opting for the healthcare and life science underlying sectors.

Business units

Adjusted net revenues at Credit Suisse shot up by 35% totalling CHF7.4 billion in Q1 21 from CHF5.5 billion in the first quarter of 2020.

Total risk-weighted assets stand at CHF 303 billion in Q1 21, compared with CHF 275 billion in the previous quarter, and CHF 301 billion in Q1 20.

The wealth management businesses delivered strong growth across the franchise and reported net revenues of CHF 3.9 billion, up three percent from last year, with transaction-based revenues up 18%, recurring commissions & fees up three percent and lower net interest income, down by nine percent.

The investment bank segment saw its revenues increase by 80% to US$ 3.9 billion, benefitting from a strong performance across all products. Fixed income sales and trading was up by 29% year-on- year, and equity sales and trading soared by 23%.

However, the bank’s net income took a hit of CHF252m in Q1 21 from CHF1.3 billion in the previous year. This was attributed to a CHF757m loss in the first quarter on the back of the collapse of US hedge fund Archegos.

‘The loss we report this quarter is unacceptable,’ said CEO Thomas Gottstein (pictured). ‘However, it is also important to recognize that our underlying 1Q21 financial performance, across all divisions, was strong, supported by solid results in Switzerland, and strong growth in APAC and investment banking.’

Click here to view the bank’s earnings release.