ABN Amro is still looking for a partner to take responsibility for manufacturing its turbo range but expects to make an announcement soon.
The state-owned Dutch bank said in June that following a review of its markets division it would stop selling equity derivatives and its own structured products, including its range of turbo certificates.
“We will indeed stop manufacturing our own turbos,” an ABN Amro spokesperson told SRP. “The current process of manufacturing turbos will be operated by another party. We expect to be able to say more about this shortly.”
ABN Amro closed its structured products sales desk in June this year with the bank’s traders running the outstanding positions. The traders are also the point of contact for unwindings and secondary market transactions, SRP can confirm.
Investors can still buy turbos and structured products from third-party providers via ABN Amro’s platform due to the bank’s open architecture structure.
There has been speculation in the Netherlands that ABN Amro could follow the example set by Royal Bank of Scotland (RBS), which offloaded its Dutch turbo activities as part of the sale of its investment products and equity derivatives (IP&ED) to BNP Paribas.
ABN Amro, which invented the turbo structure, introduced the product in several countries, starting in Germany in 2002. The Netherlands followed two years later.
Q3 2014 results
ABN Amro’s strategic decision to close its equity derivatives business has had no major impact on the bank’s overall results, the bank said.
The bank reported an underlying net profit of €450m for Q3 2014, a year-on-year increase of €161m. The underlying profit for the first nine months of 2014 stood at €1.2bn, a rise of €352m on the same period in 2013.
ABN Amro’s capital market solutions division, however, reported lower volumes following the phased wind-down of equity derivative activities, which started in the first half of 2013, and lower results driven by first-time application of funding valuation adjustments (€44m) and unfavourable credit valuation adjustments/debit valuation adjustments (€2m negative in the first nine months of 2014 versus €25m positive in the same period of 2013).
“Overall, we are pleased with the Q3 results and the fact that we comfortably passed the European Central Bank’s Asset Quality Review and stress test at the end of October,” said Gerrit Zalm, chairman of the managing board at ABN Amro.
SRP data
ABN Amro launched 482 new turbos during Q3 2014, down 299 from the 781 turbos that were launched during the same period in 2013.
The local AEX index was the most popular underlying seen in 94 products, followed by the DAX (66) and CAC40 (24).
Click here to read the Q3 2014 report and here to view the presentation.
Related stories:
98% of investors place their orders directly against market maker, says Dutch turbo godfather
ABN Amro exits EQD/structured products market
BNP Paribas takes BinckBank to court over turbos
RBS and BNP set date for transfer SP in the Netherlands