UK Banks have endured mixed fortunes in structured products. While Barclays and HSBC are still among the top 10 issuers globally, Lloyds Banking Group and Royal Bank of Scotland have disappeared from view. SRP reviews the data and financial results of four UK investment banks for the third quarter and first nine months of 2017.

Barclays Bank was the most active UK issuer (by sales volumes) across all SRP databases during the third quarter of 2017. The bank issued 374 structured products worth £1.4bn between July 1 and September 30, compared to 168 products with sales of £1bn during the same period last year. Barclays' products were almost exclusively targeted at retail investors in the US, where the bank sold 369 products via, among other, JP Morgan, Morgan Stanley Wealth Management, UBS and Wells Fargo. The bank's best-selling structures during the quarter were the Accelerated Return Notes - S&P 500, which sold $80m (£60.3m) and were distributed via Merrill Lynch. Barclays also provided the bond for five products in Japan, which were distributed by local securities companies. In the first nine months of 2017, Barclays issued 1,179 products worth £6.7bn in the US (January to September 2016: 473 products/£3.2bn), while 31 structures with a sales volume of JPY21bn (£141m) struck in Japan during the period (January to September 2016: 32 products/JPY23bn).

For the nine months ended September 30, 2017, Barclays issued $2bn and €1.5bn (£1.3bn), respectively, of fixed-rate subordinated notes, $5bn of fixed- and floating-rate senior notes, and £950m of fixed-rate senior notes included within debt securities of £20.6bn (December 2016: £16.9bn).

'The third quarter was clearly a difficult one for our markets business within Barclays International, said James Staley (pictured), group chief executive officer of Barclays, in a statement. 'A lack of volume and volatility in fixed income, currencies and commodities hit markets revenues hard across the industry, and we were no exception to this trend.'

HSBC collected combined sales of £1bn from 235 structures during the third quarter of 2017 (third quarter 2016: £1.3bn from 238 products), according to SRP data. Like Barclays, most of HSBC's issuance was targeted at the US market (217 products). The bank also sold 10 products in the UK, which were distributed by Walker Crips, six products in Japan, and two products for private investors in France in collaboration with KBL Richelieu.

During the first nine months of 2017, HSBC was the second most active issuer globally, with sales of £5.6bn from 947 structured products across eight jurisdictions (Belgium, China, France, Japan, Mexico, Sweden, the UK and US), compared to 608 products worth £2.9bn in the same period last year.

In retail banking and wealth management (RBWM), the bank reported a 'good quarter', with a revenue increase in wealth management from a rise in insurance manufacturing revenue (up $500m), higher insurance sales in Asia and higher investment distribution revenue (up $300m), primarily driven by higher sales of mutual funds in Hong Kong, reflecting increased investor confidence, according to the bank.

Lloyds Banking Group is no longer issuing structured products to retail investors. The SRP database registers 279 structured products distributed by the bank and its subsidiaries, dating back to May 1996. Of these, seven are still live, of which the Senior Callable Index Range Accrual Notes, which were sold in the US in 2013, is the most recent.

RBS has not issued structured products since September 2014, when BNP Paribas took over most of the UK bank's market-making activities. The bank has 189 live products listed on the SRP database across 13 jurisdictions.

Click the link to view the full third quarter 2017 results for Barclays, HSBC, Lloyds Banking Group, and Royal Bank of Scotland.

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