2017 was a tough year for structured products in Belgium with sales down 30% on the previous year, according to SRP data. The 311 structures that were issued during 2017 - excluding open-ended funds - sold an estimated €4bn compared to 347 products worth €5.7bn in 2016. Market leader KBC saw its sales decrease by approximately 45% while sales at BNP Paribas Fortis were down 9%. Belfius, however, held its own and reported an increase of more than 11%.

SRP reviews the data and the financial results of the top three distributors in Belgium.

KBC was the leading distributor in Belgium with a share of 35% of the market in 2017, according to SRP data. The bank-insurer sold 59 structured products worth an estimated €1.4bn (2016: €2.6bn from 92 products) split between 33 structured funds, 25 unit-linked life insurance products (Class 23), and one medium-term note. Of these, 57 products were linked to a share basket, one product was linked to the Eurostoxx 50 and one product, the sole MTN, which was issued via KBC Ifima, was linked to inflation.

KBC reported a net result of €1.6bn for its Belgium business unit in 2017. Net fee and commission income rose by 12% year-on-year driven chiefly by higher management fees from mutual funds and unit-linked life insurance products (mainly thanks to a more favourable asset mix and a higher assets base), higher securities-related fees, higher entry fees from unit-linked life insurance products and slightly higher fees from payment services, which were only partly offset by lower fees from credit files and bank guarantees, according to the bank.

Sales of life insurance products rose by 50% quarter-on-quarter mainly due to higher sales of guaranteed interest products and higher sales of unit-linked products due to commercial efforts and favourable investment climate, according to the bank. For the full year 2017, life sales increased by 15% compared to 2016, entirely driven by higher sales of unit-linked products.

Assets under management (AUM), at €205bn, rose by 1% quarter-on-quarter and by 3% year-on-year owing to a positive price effect.

'Our net result [in the fourth quarter of 2017] amounted to a good €610m,' said Johan Thijs (pictured), group CEO, KBC in a statement. It was supported by a pick-up in fee and commission income, a strong level of income generated by the dealing room and an impairment release, but also included a typical end-of-year hike in costs.'

Belfius achieved a market share of 21%, second behind KBC, with sales of €836m from 53 structured notes (2016: €751m from 52 products). Twenty-seven of the bank's products were linked to the interest rates while the remaining 26 products were linked to a single index, including, among other, the Solactive Digital Economy, Stoxx Europe ESG Leaders Select 30 and the Dax. The bank's best-seller for the year, the Callable Interest Notes 02/2027, a 10-year steepener linked to the constant maturity swap rate sold €65m during its subscription period.

Belfius posted increased profits in 2017. Net income after tax for 2017 rose by 13% to €606m, enabling a dividend to be paid of €363m for the financial year, according to the bank. Fees and commissions increased by 8% driven by strong organic growth in private banking, investment products (mutual funds, Class 23 & Class 44, structured bonds, MyPortfolio) and non-life bank-insurance cross-selling.

The bank also confirmed its position as leader in debt capital markets (DCM) issues for (semi-)public and corporate customers by taking part in 86% and 58% respectively of available mandates on the Belgian market. In 2017, Belfius issued €5.4bn in innovative means of funding in the form of short-term issues (average outstanding on commercial papers) and long-term issues (medium-term notes and bonds).

BNP Paribas Fortis sold €788m worth of structured products in 2017 which translates in a 20% share of the Belgian market. The bank issued 53 products during the year (2016: €861m from 52 products) split between 39 products linked to a single equity index, 13 products linked to the interest rates and one product linked to commodities. The latter, the USD Capped Note Gold 2023, was linked to the London Gold PM Fix Price and sold US$33.45m (€28.5m) during its subscription period.

BNPPF reported strong business activity for full year 2017 with customer deposits, at €167bn, up 4% from December 31, 2016. Revenues amounted to €8.1bn marginally down compared to 2016 (0.4%), according to the bank.

Click the link to view the full year 2017 results for Beflius (results/presentation), BNP Paribas Fortis (results) and KBC (results/presentation).

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