This week, we take a look at ESG efforts in the structured product industry in anticipation of our ESG report later this year. Elsewhere, new products are launched in Thailand and Austria.

Lionel Phillips-Franjou has been appointed as director, Apac head of complex structuring, multi-asset group at Citi. Based in Hong Kong SAR, he reports to Mario Serafino, managing director, Apac head of multi asset group, equity derivatives sales and solutions for financial intermediaries since October 2022, a Citi spokesperson told SRP.

The former structurer from Société Générale has joined Citi’s multi-asset group in Apac after 16 years at the French bank, and has been charged with designing, promoting and implementing structuring solutions for Citi’s clients in Apac, with a focus on Citigroup First Investment Management. The structurer parted ways with SG in September 2022 where he had acted as head of cross structuring group, Apac ex-Japan, based in Hong Kong SAR since January 2021. 

The yield curve has increased dramatically since May last year and that is good news for capital guarantee products - Uwe Kolar, Erste Group Bank

Also in Asia, BBVA has gone live on EQConnect, a multi-issuer platform developed by FinIQ, as part of its expansion targeting private banks in Asia. The platform allows wealth managers to request for quotes from major market makers in the equity-linked space for structured products while enabling optional integration with other core banking systems.

The wealth management arm of Siam Commercial Bank has received ‘good response’ from clients for its new products launched in 2022, featuring structured products linked to equity with knock-in/knock-out (KIKO) and to Thai overnight repurchase rate (Thor), stated the bank in its SCB Wealth Holistic Experts conference held on 25 January. In 2023, SCB Wealth will accelerate its development of structured notes that offers downside protection or ESG elements, according to the bank.

Erste Group Bank has issued two capital-protected products with a minimum redemption in Austria. Erste Fair Invest Garant 109.50% 23-28 is linked to the Solactive Erste Fair Invest Index VC and offers a guaranteed return of 9.50% after five years, while Erste Green Invest Garant 120% 23-31, which is tied to the Solactive Erste Green Invest Index VC, has a slightly longer tenor, but its minimum return, at 20%, is higher too. Additionally, both structures offer 100% uncapped participation in the rise of the underlying index.

“The yield curve has increased dramatically since May last year and that is good news for capital guarantee products,” noted Uwe Kolar, head of retail and savings banks sales at Erste Group Bank in Vienna.

In anticipation of the release of the second edition of our ESG report this year, we spoke to several market players about their plans. French bank BNP Paribas made the headlines in 2014 following a partnership with the World Bank to launch a series of index-linked green bonds linked to the performance of linked to the performance of the Ethical Europe Equity Index. Since then, the bank has appeared consistently as a top 15 manufacturer of ESG structured products and top 10 provider of ESG indices. Most recently, the bank integrated a €50m social bond, a social index and social sharing through donations in a structured product linked to the performance of the MSCI Eurozone Social Select 30 index.

For its part, Credit Agricole Corporate & Investment Bank (CACIB) is one of the fastest growing manufacturers of ESG structured products gaining significant market share over the last three years. This stood at around 10% at the end of 2022. The French bank is also a pioneer in the green bond market following the launch in 2017 of its first green note on Taipei Exchange, also becoming the first foreign issuer to be accredited by the Taiwanese exchange for the issuance of green bonds. In 2018 it launched of a sustainable product range based on two layers including green investments, for which the invested amount was earmarked exclusively for finance companies and projects playing a key role in energy transition, and green financial performance, where the financial return was linked to the performance of a green equity index.

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