New investment thematics shine through, banks start the climb back up, and Asia is back on top.

Crelan and Société Générale have collaborated in Belgium for the launch of ESG Minimum Redemption 2029 USD, an 8.5-year medium-term note linked to the Solactive ESG Big Data Europe Low Volatility AR 5% Index. Interest in the note from investors reached such levels that the bank had to end the subscription period prematurely on 29 October, a full 12 days ahead of the original closing date, according to Koen Theys, product manager, off-balance sheet at Crelan.

Over in Germany, the number of products offering exposure to decrement indices in the primary market has more than doubled over the last 12 months with three German issuers now actively offering sustainable decrement indices as part of their catalogues. During 2019 there were five products linked to different ESG decrement indices including the Euronext Eurozone 100 ESG Decrement 5% Index, Euronext Benelux ESG Leaders 20 Decrement 4.5% Index, and eight featuring SRI decrement index including the MSCI EMU SRI Select 30 Decrement 3.5% Index.

So far this year, up to 44 products linked to this kind of index have struck in Germany from three issuers. LBBW, Credit Suisse and DekaBank are the main issuers.

In China, China Guangfa Bank issued CNY S116 XJXSLG6231, a six-month structured deposit linked to the price of methanol. Every month the product has the option to knock out, providing the price of the commodity is at or above 95.3% of its strike price on the valuation date. In that case, it offers 100% capital return plus a coupon of four percent pa.

In further positive news, Société Générale has reported a gradual recovery in equity structured product revenues in the third quarter of 2020, while benefitting from a ‘good performance’ of listed products. The French bank has already raised more than €1.5 billion (US$1.7 billion) from developing alternative products.

The group completed a strategic review carried out in its global markets business on structured products, and in that context, has confirmed its ambition to maintain its global leadership role in equity structured products and to stay a major player in investment solutions.

While Société Générale is reducing the risk profile on equity and credit structured products, the bank is not abandoning autocalls. It is redesigning its product range to decrease the sensitivity of its revenues to market dislocations.

Spanish bank Santander has reported a fall in total group income for the third quarter of 2020 with a value of €33.6 billion from €36.9 billion during the same quarter of 2019.

Santander reported GDP contractions of -9%, -18.7%, and -12.4% for the US, Mexico, and Brazil respectively with global activity recording steady gains in Q3 20 despite being momentarily impacted by a resurgence of the Covid-19 pandemic. Derivative instruments for the group totalled €15.1 billion, a 3.8% decrease from Q3 19’s €15.7 billion; risk weighted assets (RWAs) stood at €555 billion, a 9.5% drop from €613 billion in the third quarter of 2019.

Huatai Securities’ net profit has grown by 4.6% to CNY2.5 billion (US$375.5m) in the third quarter – year-to-date, the firm has reported a net profit of CNY8.9 billion, up 37.8% year-on-year (YoY). 

The Nanjing-headquartered securities firm issued and distributed 126 structured products with strike dates between April and June, compared with 215 products issued from January to March, SRP data shows.

However, the Chinese firm racked up CNY1.3 billion in Q2 20 - driven by four autocallable notes with a knock-in and knock-out (KIKO) option for institutional investors - higher than the CNY784.7m sales volume of the previous quarter.

Still in Asia, UBS’ multi-issuer multi-asset platform, Structured Products Investor (SPI), has seen year-to-date traded volumes doubling those of 2019. The spike in activity has helped to ‘significantly scale up’ the bank’s structured products business in the Asia Pacific market following the onboarding of Vontobel as the latest issuer this year.

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