Monex and BBVA Bancomer, dominant players in the Mexican structured products market, have suffered landslide sequential plummets in both their issuances and sales during the second quarter of 2020, according to SRP data.

Mexican financial group Monex retains its position as the most prolific issuer in Mexico with an issuance of 803 products valued at US$1.46 billion, compared to 988 products worth an estimated US$6.1 billion in Q1 20 and 1,523 (US$2.48 billion) in Q2 19.

BBVA Bancomer, a subsidiary of the Spanish banking group, trails behind with 423 products for US$718m issued, a decrease from its Q2 19 figure of 386 products valued at US$2.23 billion. During Q1 20, the bank issued 398 structured products with a sales volume of US$1.13 billion.

Amid the economic chaos brought on by the Covid-19 pandemic, BBVA has forecasted a fall in GDP of about 10% with a chance for a partial recovery of 3.7% in 2021. The bank also predicts a 20.5% contraction in investments for the remainder of the year.

Monex boasted a growth of 16% in accrued net revenues from Q2 19, amounting to MXN4.52 billion. Net income for the first half of the year reached MXN752m (MXN333m for Q2 20) representing a rise of seven percent from the same period a year prior.

The firm’s derivatives product revenues saw significant growth from Q2 19 of 125% reaching MXN585m while total operating revenues from securities brokerage and trading services totalled MXN356m reflecting a soar of 30% from the same period the previous year.

Monex also boosted its foreign subsidiaries’ operating revenue by 26% from H1 19 to reach MXN1.43 billion while domestic foreign exchange operations stand at MXN1.76 billion, a 20% increase from the first half of 2019.

The SRP database contains eight of Monex’s live issued products that are listed domestically and wrapped as bank certificate deposits and structured bonds. All of the investments are tied to the USD/MXN underlying and have a short duration of under a year.

BBVA Bancomer’s net income took a considerable hit of 33.6% during the first half of 2020 standing at MXN 15.9 billion while net interest income totalled MXN 17.68 billion, a 16.2% drop quarter-over-quarter.

Total derivatives are valued at MXN112.16 billion as of June 2020, compared with MXN290.14 billion in June 2019.

Market, operative and credit risk-weighted assets amounted to MXN1.65 trillion, a decrease from the second quarter of 2019 figure of MXN1.71 trillion.

Total operating revenues tumbled from MXN31.36 billion in Q2 19 to MXN28 billion while net interest income also slid to MXN27.68 billion from MXN32.15 billion.

The bank has issued 497 live structured products in the Mexican market according to SRP data. The tranche investments are wrapped as warrants, bank certificate deposits and structured bonds. Some underlyings include TIIE 28, USD/MXN, SPDR S&P 500 ETF Trust, Nvidia, Salesforce.com and Netflix.

“The increase in market volatility during the previous quarter caused by the outbreak can be taken advantage of by the investor and shaped to perform well in increasing or decreasing markets,” said BBVA Bancomer’s global head of structured solutions, Pablo Parra (pictured).

Click the links to view the second quarter results for Monex and BBVA.