The domestic market has seen changes at the top of the country’s issuer ranking with CIBC taking over BMO as the most active product manufacturer in the market.
Canadian Imperial Bank of Commerce (CIBC) has risen through the ranks to become the most dominant issuer group in the Canadian structured products market during the third (May-July) quarter of 2021, SRP data shows.
With an issuance of 387 structured products during Q3 21, the bank has boosted its performance by 151% from the second quarter of 2020 and has displaced from the top of the league table Bank of Montreal (BMO) which issued 154 products.
CIBC’s product issuance fell slightly during the final quarter of 2020 to 152 products. This figure then soared to stand at 225 by the end of the first quarter, and later increased by 55% in the first quarter of 2021, reaching 350 products.
SRP data notes an uptick in the volume of products issued by CIBC tied to PepsiCo during Q3 21. With a combined sales volume of US$21m, 11 products were issued with the CIBC Market Return GICs (5 years) due July 6, 2026 emerging as the best-seller.
The guaranteed investment certificate linked to an equally weighted basket containing Great-West Lifeco, TELUS, TD Bank, Verizon, Pepsi, Allianz, Swisscom, Sanofi-Aventis, Deutsche Telekom, Novartis, sold CAD4.1m (US$3.2m).
The product will return 100% of invested capital plus 100% participation in the growth of the underlying, subject to a cap of 27% if the underlying is above its initial level at the scheduled maturity date.
In terms of wrappers, structured notes accounted for most of CIBC’s issuance for the third quarter with sales totalling US$682m (351 products), while GICS only account for US$98m in sales (36 products).
CIBC’s net income has soared by 48% in the second quarter of 2021 standing at CAD1.7 billion from CAD1.65 billion in Q2 20.
Toronto Dominion (TD) Bank has seen its structured product issuance in the third quarter of 2021 decreasing by more than half with just 54 products, compared with 141 products in Q3 20 reflecting a drop of 63% year-over-year.
TD issued a higher volume of products tied to Solactive underlyings including five structures linked to the Solactive Equal Weight Canada Banks 5% AR Index of which the best-selling note was the TD Canada Banks 5% AR Index-Linked Autocallable Memory Coupon Notes, Series 49.
Selling for CAD3.92m, the product will reach maturity in five years and pay a fixed coupon of 6% pa, plus all previously missed coupons if the underlying is above 80% of its initial level at any observation date.
TD Bank Group reported earnings of CAD3.5 billion for the third quarter of 2021, up 58% compared with the third quarter last year, and adjusted earnings totalled CAD3.6 billion, up 56%.
Scotiabank, which has just reported its second quarter earnings, brought to market 96 products in Q2 21, representing a 65% increase since the same period of 2020.
Sales volumes of products issued by Scotiabank were dominated by exchange-traded fund (ETF)-linked products which have more than doubled compared to the previous year, totalling US$17.8m (eight products) in Q2 21.
The best-selling ETF-linked product was the BNS iShares Global Clean Energy ETF Autocallable Notes, Series 5. The note which sold CAD5m tracks the iShares Global Clean Energy ETF and will expire in three years.
If the underlying level is above the knock-out barrier on any of the observation dates, the product is subject to early redemption, in which case, the product returns full capital, the fixed coupon for the date and 5% participation in any growth of the underlying in excess the amount of the fixed coupon.
Scotiabank reported a second quarter net income of CAD2.5 billion compared to CAD1.3 billion in the same period last year.
Click to view CIBC’s Q3 21 earnings release.
Click to view TD’s Q3 21 earnings release.
Click here to view Scotiabank’s Q2 21 earnings release.