Cornèr Bank has entered the SIX Swiss Exchange as a new issuer of structured products. The bank which is a platform partner of Leonteq Securities, has listed in the Swiss exchange the 3.00% p.a. Multi Reverse Convertible on Swiss Big 5, a multi barrier reverse convertible linked to a basket of Swiss shares including ABB, Nestle, Novartis, Roche, and UBS.
The bank's financial strength and its reputation in the private placements segment will be a differentiating factor for its public offering, according to Nicola Lafranchi (pictured), senior vice president at Cornèr Bank. "As far as asset backing is concerned, Cornèr Bank Group enjoys an enviable position, holding about three times the necessary equity," said Lafranchi. "Indeed, according to the world financial statistics compiled by The Banker in 2015. We are issuing products on a regular basis already, most of them being private placements."
The income structure, traded in Swiss Francs, combines a reverse convertible/ worst off payoff type and will pay a 3% fixed coupon per year. If during the observation period, none of the shares are at or below the predefined barrier, the product offers a capital return of 100%. If during the observation period, at least one underlying is at or below the barrier but the final levels of all underlyings are at or above their initial level, the product offers a 100% capital back. Otherwise the product offers a capital return, which corresponds to the performance of the worst performing basket component.
According to Lafranchi, the bank will focus on an initial stage on short volatility products such as barrier reverse convertibles as in the current market environment "really work". "The negative/low interest rates environment does not allow alternative products like capital protected notes to be attractive," said Lafranchi. "[However,] US and EU stocks have reached interesting valuation levels and can be definitely considered for structuring products."
Active across the whole range of traditional banking services, Cornèr Bank Group specialises in the private banking sector, as well as in the areas of lending, and online trading (CornèrTrader) - the core businesses on which the growth of Cornèr Bank Group is based.
Corner Bank joined the Swiss Structured Products Association (SSPA) as the first member of Italian speaking Switzerland at the end of January 2016. Corner Bank has over 50 live structured products in the Swiss market of which eight are growth based and 46 are income structures.
Founded in Lugano in 1952, Cornèr Bank Group is an independent Swiss private bank group operating on the national market as a full-service bank.
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