Annual gross sales and assets invested in retail structured products in Germany (€bn)

Germany was the second largest European market in terms of outstanding invested in retail structured products as at the end of 2009 behind Italy. There was a total of €132.4bn invested at year end, an increase of 8.9% on 2008. In terms of annual gross sales the market is the largest in Europe, just ahead of Italy, with annual sales increasing by 11.7% to €43.7bn from €39.1bn in 2008. However sales remain substantially less than the €65.8m seen at the market’s peak in 2007 due to the dramatic contraction seen in the market after the Lehman default at the end of 2008.

The structured retail product market in Germany has evolved in a different way from the majority of other European markets. Unlike other markets, where products are typically sold as either bank deposits, bonds (MTNs), funds or life assurance, the German market has evolved out of the listed warrants market so that the favoured wrappers are certificates and notes, issued primarily by investment banks as well as by local retail banks. These are distributed mainly by the networks of the issuers or other local retail banks and especially via the local savings banks; the Sparkassen and Volksbanken/Raiffeisenbanken. In addition, a high percentage of certificates are actively traded on stock exchanges, mainly in Stuttgart and Frankfurt, and they are also available via online portals.