Staff continues exiting Credit Suisse, while a number of the larger banks reported mixed quarterly results.
Roberto Rosas has joined Barclays as director, head of structured product sales for Latin America (Latam). Based in New York, Rosas reports to Shikha Jindal, managing director, head of structured product distribution for private banks and Latam, SRP has learnt. Rosas joins the UK bank from Credit Suisse in New York where he spent almost five years in the bank’s equity derivatives and investor product sales team.
Mandy Xu has joined US derivatives and securities exchange Cboe Global Markets as vice president, head of derivatives market Intelligence, based in New York. Most recently, Xu was managing director, head of equity derivatives strategy at Credit Suisse, specialising in index and ETF volatility research.
According to SRP data, 50% of all early redemptions in France during July were products linked to a single equity index
Several of the large investment banks have recently second quarter reported results. For its part, BNP Paribas reported a net income of €2.81 billion (US$3.06bn) for the second quarter of 2023 – beating analysts’ forecast of €2.42 billion as polled by FactSet but declining 4.9% compared to the prior-year quarter, according to the bank’s latest quarterly report.
Revenues dropped 1.5% to €11.4 billion due to ‘unfavourable forex impact and high negative exceptional items this quarter’.
The bank, led by CEO Jean-Laurent Bonnafé, issued 1,893 non-flow structured products across 14 markets in Q2 23 worth an estimated US$4.2 billion, versus 1,000 products marketed across 17 jurisdictions worth an estimated US$3.5 billion in Q2 22, according to SRP data.
Société Générale (SG) has posted a decline in earnings for the second quarter of the year, with underlying revenues, at €6.5 billion, down 5.4% year-on-year (YoY). Underlying gross operating income fell 15% to around €2.06 billion, and net income dropped to €0.9 billion from €1.2 billion YoY.
Although the French bank had a robust 2022 with increasing revenues, group revenues contracted in Q2 23 ‘due to the decline in the net interest margin in France and in market activities’ revenues against a backdrop of gradual normalisation after some particularly favourable years,’ according to CEO Slawomir Krupa.
SG issued 1,272 non-flow structured products in Q2 23, globally – a decrease from 1,375 compared to the prior-year period, according to SRP’s data.
Products were distributed in 13 jurisdictions led by Switzerland (587 products), Taiwan (290), France (223), Germany (65) and Italy (61).
J.P. Morgan has reported net revenues of US$41.3 billion in Q2 23, up 34% YoY, and non-interest expenses of US$20.8 billion, an increase of 11% compared to the previous year. The bank also reported an increase of its net income by 67% to US$14.5 billion YoY. In the US structured products market, JPM collected a combined US$4.7 billion from 2,029 issued products during the quarter – up 5.1% by sales volume YoY (Q2 22: US$4.5 billion from 1,913 products).
J.P. Morgan took the top spot in the league table with a 17.4% share of the US market, replacing Citi, which was the number one issuer in Q2 22.
The Australian Securities and Investments Commission (Asic) has proposed to extend the interim measures of design and distribution obligations (DDO) to seven years from two years. The financial regulator is seeking industry feedback on a proposal to extend the operation of the Asic Corporations (DDO Interim Measures) 2021/784 instrument for a further five years. This will extend the expiry until 5 October 2028.
The instrument was initially designed for two years and implements measures announced by the department of the treasury. These include relief for distributors from the obligation to report to product issuers if they received no complaint during a reporting period.
Besides the extension, the proposal also seeks to remove an exemption for cashless welfare arrangements that is no longer necessary following the making of the Corporations Amendment (DOO – Income Management Regimes) Regulations 2023.
According to SRP data, 50% of all early redemptions in France during July were products linked to a single equity index.
More than 250 autocalls listed on the SRP France database have been early redeemed in July.
The products returned an estimated rollover capital of €1.8 billion (US$1.96bn) subscribed on the primary market plus approximately €130m paid as a coupon. This compares favourably to the €1.7 billion worth of early redemptions in June (from 350 products) although coupon payments, at an estimated €150m, were slightly higher back then.
The highest notional linked to early redemptions in 2023 to date was seen in May, when €2 billion became available for reinvestment, plus €150m in coupon payments (from 365 products).
Image: U2M Brand/Adobe Stock.