Structured turbo certificates marketed by BinckBank have made a good start in the Netherlands despite a relatively limited product offering, Koen Beentjes, chairman of the executive board at BinckBank, said during the presentation of the Dutch online broker's first-half report for 2014.

“The issuance of investment products for our own account and risk is a new activity for BinckBank,” Beentjes said.

BinckBank plans to achieve a significant market share and is optimistic with respect to its chances of success, according to Beentjes. In 2013, Royal Bank of Scotland (RBS) was the market leader for leverage products with a share of 45.6%, followed by ABN Amro (30.5%), ING (19%), Commerzbank (2.6%) and Citi (1.8%).

Beentjes added that the positive differentiating qualities of Binck turbos in the market will include high liquidity, tight spreads and extensive trading hours.

The Binck turbos were introduced just after the end of the second quarter to meet demand from experienced and active investors looking to invest in turbos, Beentjes said.

UBS
BinckBank has outsourced a large part of the operations to UBS which acts as market maker.

Trading takes place via the Citigroup Automated Trading System (Cats), a trading platform which is owned by Börse Stuttgart and Citibank. Trading will only take place between the end-investor and the market maker.

The Binck turbos, for which the capital requirement is expected to be between €2m and €4m, are exclusively available for clients of BinckBank in the Netherlands.

During the first three weeks since the launch, BinckBank has issued 1,049 turbos. Of these, 441 are linked to indices – the local AEX index and the German DAX – while the remaining 608 are linked to 23 Dutch stocks including Aegon, Ahold, ING, Heineken, KPN and Wolters Kluwer.

Results
BinckBank reported a net profit of €20.2m for the first six months of 2014, down from €21.9m during the same period in 2013.

The relatively calm financial markets caused the number of customer orders to fall from 2.5m in the first quarter to 1.9m in the second quarter of 2014.

“Whereas in the first quarter the market was busy and transaction volumes hit their highest level in recent years, the second quarter featured low volatility and, partly due to this, low trading volumes,” Beentjes said.

Click here to read the BinckBank first-half 2014 report.

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