The US investment bank has finished the third quarter as a top issuer in the US market.

Goldman Sachs has improved its structured product sales by 51.5% in the third quarter of 2021 with sales volumes of US$3.2 billion (881 products), compared with US$2.1 billion (726) products in the same period a year prior.

However, this figure represents a 7.5% decrease in sales from the second quarter of 2021 during which stood at US$3.4 billion across 852 products.

The bank’s issuance has steadily increased from Q3 20 to the first quarter of 2021 where issuance hit a peak of 928 products worth US$3.5 billion. This number swiftly tumbled during the next two quarters.

The bank led by David Solomon (pictured) currently ranks as the second most prolific issuer group in the US market for the third quarter of 2021, according to SRP data. The bank follows Citi which has a total of 1,033 structured products valued at US$3.4 billion - other top-ranking issuers include J.P. Morgan, Barclays, Morgan Stanley, and UBS.

SRP data shows that GS Finance has issued four structured products tied to the interest rate asset class totalling US$10m in Q3 21. The best-selling structure for the period was the Callable Quarterly CMS Spread-Linked Notes (40057HT42). Selling for US$5m, the income note has accruable and callable payoff types and will reach maturity in 15 years.

The product is linked to the 30Y USD Constant Maturity Swap Rate and 2Y USD Constant Maturity Swap Rate. It offers a quarterly coupon calculated as 11 times the difference between the 30-year and 2-year Constant Maturity Swap Rate. Each coupon is subject to a maximum rate of 15% and a minimum of 0% pa.

The bank has also increased its issuance of structured products tied to hybrid asset classes by 53% from Q3 20 to total US$150m in sales, while ETF issuance has decreased in Q3 21 to value US$161m from US$222m in the previous year.

Europe

Goldman Sachs issued 24,363 products (€437m/US$516m) in the European market during the third quarter, representing a 20% decrease from the previous year where issuance stood at 30,717 products worth €444m (US$514m).

In addition, the US bank has issued a total of 124 non-flow structured products in Q3 21 with the majority being tied to single-share, share basket, and single index equities. Most of these products were listed in Italy, Sweden, France, UK, Poland, and Belgium.

Popular underlyings include TotalEnergies, Nokia, ICA, EQT, Veoneer, and the FTSE 100 index which was featured in 62 products.

The main distributors of Goldman’s products during the period include Garantum Fondkommission, Broker Solutions, Meteor Asset Management, Bank Pekao, and i-Kapital.

GS has also issued 9,677 leverage products in the third quarter listed in the German and Austrian markets with all products being tied to single equity indices. All the products track exposure to five underlyings such as the S&P500, Nasdaq 100, DJ Industrial Average Index, DAX/XDAX, and DAX.

Business lines

Goldman Sachs reported net revenues of US$13.6 billion and net earnings of US$5.4 billion for the third quarter ended September 30, 2021. Net revenues were US$46.7 billion and net earnings were US$17.7 billion for the first nine months of 2021.

Investment banking recorded its second highest quarterly net revenues of US$3.7 billion, reflecting record quarterly net revenues in financial advisory and continued strength in underwriting.

Global markets generated quarterly net revenues of US$5.6 billion, primarily reflecting strong performance in equities, including record equities financing net revenues, and the second highest fixed income, currency and commodities (FICC) financing net revenues.

Consumer & wealth management produced quarterly net revenues of over US$2 billion for the first time, 35% higher than the third quarter of 2020.

Assets under supervision increased by US$67 billion during the quarter, including long-term net inflows of US$49 billion, to a record US$2.37 trillion. Firmwide management and other fees were a record US$1.95 billion for the third quarter of 2021.

Click to view the bank’s third quarter earnings release.