Norway’s biggest bank, DNB, has returned to the market after a five-month pause with a three-year structured certificate offering exposure to the Eurostoxx50 index.

Markedssertifikat Aksje Europa, an 80% soft protected three-year enhanced tracker/protected tracker structure, will pay out 109.68% participation in the rise of the underlying. With Norwegian banks recently having lowered both their borrowing rates and lending rates, Norwegian investors may be willing to look for alternatives such as structured products.

In a recent interview with DN.no, Endre Jo Reite, economist at Sparebank 1, was quoted as saying that since “inflation eats up a little more than what you get in return after tax”, returns on fixed-income products are worthless.

“The return simply does not compensate for the decline in value,” he said, while recommending Norwegian investors move their money into the stockmarket through mutual funds.However, the lower interest rates environment should potentially also mean there is basis for growing demand for structured products.

DNB’s chief executive Rune Bjerke also told local media that “a good number of wealthy people, who have lots of money saved up, should now perhaps see that there are other relevant savings products that provide an OK return and are liquid.”

“As long as deposit rates were sufficiently high, they did not care so much about this,” he said. “Now I think they should be a little more active and identify other saving products that provide the return they might historically have had.”

Bjerke said that deposit rates were a little too high on certain bank products for a while, and that the correction is seen as a normalisation. “You see this on the deposit growth of banks – including ours,” he said. “It has been very high, which probably means that rates on deposits were a bit too good.”

According to SRP data, DNB has issued a total of 322 structured products of which 33 retail structures are still live. The Norwegian bank, however, has suffered from bad press and legal suits in recent years.

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