The major investment banks announce their latest results. Elsewhere, China Merchants Bank International Securities Company deepens its wealth management exposure.
Société Générale Securities Japan Limited (SG) has made a flurry of appointments this fall as it seeks to strengthen its business franchise for global markets in Asia Pacific.
It has revealed three appointments of sales on the global markets in Japan, including seasoned sales Tomoyuki Sasai who joined as managing director, head of global markets sales in Japan, according to the bank announcement on Wednesday, 25 October. SG has also appointed Ryosuke Ishizawa (right) as head of distribution cross assets solutions and head of financial institution cross assets solutions, global markets in Japan.
Barclays’ structured product sales in the US market increased 1.6-fold YoY. It has reported a group income of £6.3 billion (US$7.6 billion) for the third quarter of 2023 – down two percent year-on-year (YoY).
Income for the corporate and investment bank (CIB) decreased six percent to £3.1 billion, driven by lower client activity in global markets, which was down 13% in dollars versus a record Q3 2022.
Fixed income, currencies, and commodities (FICC) fell 19% in dollars as the bank benefitted less from US rates volatility, compared to gilt volatility in the UK this time last year.
Equities were up three percent in dollars, with derivatives and cash performance partially offset by equity financing, as client balances continued to grow, albeit as spreads tightened.
The above figures are excluding the impact from last year’s over-issuance of securities (Q3 2022 financial impacts: equities income reduction of £466m, litigation and conduct reduction of £503m).
US counterpart J.P. Morgan has asserted its dominance in the domestic retail structured products market. The US bank has delivered improved results in Q3 23 as increasing borrowing costs and its acquisition of failed First Republic Bank lifted the bank’s income.
Net revenues climbed 22% to US$39.9 billion while non-interest expenses increased 13% to US$21.8 billion in Q2 23.
With US$1.4 billion provision for credit losses set side, net income was up 35% to US$13.2 billion YoY.
Return on equity (RoE) and return on average tangible common shareholders’ equity (ROTCE) reached 18% and 22%, respectively.
During the quarter, JPM has kept its crown at the US retail structured note market on the back of 2,158 issuance at US$6.1 billion YoY (Q3 22: US$6.0 billion from 2,253 products). That translated to 18% market share among a total of 15 issuer groups, according to SRP data.
Morgan Stanley has reported net revenues of US$13.3 billion for the third quarter of 2023 compared to US$13.0 billion a year ago, according to the bank’s latest earnings report.
Net income was US$2.4 billion, or US$1.38 per diluted share, compared to net income of US$2.6 billion, or US$1.47 per diluted share, from the same period a year ago.
In its domestic market, the sales volume of structured notes issued by the US bank has continued to decline, reaching a new low since Q4 2020.
The US market saw a total of 9,740 retail structured notes with traded notional of US$33.6 billion in Q3 23 – an increase of 12.4% YoY, or 22.2% quarter-on-quarter, according to SRP data.
Over in Korea, Seoul-based issuer Hana Securities has claimed more than one-third of the market share for the issuance volume of derivative-linked securities and derivative-linked bonds in the third quarter.
South Korea has seen 137 derivative-linked securities (DLS) debut in the third quarter brought to the market worth KRW547 billion (US$403m), dropping over 24% year-on-year (YoY) and 36% quarter-on-quarter (QoQ) by issuance volume, according to the latest report from the Korea Securities Depository (KSD).
China Merchants Bank International Securities Company (CMBI) has rolled out a mobile platform that allows real-time price discovery and one-click purchase of fixed-coupon notes (FCNs), targeting wealth management clients in greater China who seek offshore product exposure.
CMBI’s new FCN platform allows its wealth management clients to customise commoditised equity-linked flow products, select the quote from multiple bidders, and directly place the order through its mobile app (壹隆环球), which shortens the offline transaction process to a few minutes in a one-stop shop format.
The platform offers around 3,000 equity-linked structures across the Hong Kong and US equity markets, enabling wealth management clients to customise desired coupon levels, execution prices, tenor periods, and knock-in and knock-out levels.
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