UBS, which absorbed troubled Swiss bank Credit Suisse earlier this year, saw revenue expand. Elsewhere, King & Shaxson Capital Markets (KSCM), launched the first structured product programme listing on its KSCM Euro List multilateral trading facility.

UBS has reported net profit of US$29.2 billion in Q2 2023, including US$28.9 billion of negative goodwill from the Credit Suisse (CS) acquisition to sustain US$238 billion assumed risk-weighted assets (RWA), according to its earnings report that includes the results for the former CS business from 1 June.

Underlying pre-tax profit was US$1.1 billion in Q2 23, of which US$ 2.0 billion from the UBS sub-group. Common equity tier 1 (CET1) capital ratio was 14.4%.

Total revenues increased 7.0% to US$9.5 billion while operating expenses rose 34.8% to US$8.5 billion at UBS.

In the US market, UBS remains the fifth largest issuer in Q2 23 on back of 954 retail structured notes sold at US$2.2 billion, which formed 9.1% of the market. It follows J.P. Morgan, Goldman Sachs, Citi and Morgan Stanley.

Bank of America (BofA) has reported net income of US$7.4 billion for the second quarter of 2023 – an increase of 19% year-on-year (YoY), according to its latest quarterly report.

Revenues, net of interest expense, were up 11% to US$25.2 billion while non-interest expense was five percent higher to US$16.0 billion ‘driven by investments in the franchise across people and technology’ YoY. Common equity tier 1 (CET1) ratio increased 23 bps to 11.6% in Q2 23 from a quarter ago.

The bank led by Brian Moynihan achieved its highest ever quarterly structured product sales in the US market in the first quarter of the year.

In Q2 23, the US bank collected US$2.1 billion from 499 retail structured notes in its domestic market, taking a share of 7.6% of the market after J.P. Morgan, UBS, Citi, Goldman Sachs, Morgan Stanley and Barclays. The amount represented an increase from US$1.8 billion sold in the previous quarter.

Investment certificates gained traction for the European market this past week with 177 out of 193 product issuances stemming from Germany, a 2.5 times increase compared to the prior-week period (67 out of 102 products were issued in the country).

The S&P 500, Russell 2000 and DJ Industrial Average Index were among the most popular underlying assets embedded in the products in north America. Morgan Stanley sold US$4.7m worth of Dual Directional Buffered Participation Securities on the S&P 500. The five-year structured note features a capped participation and twin-win payoff type. The product offers a capital return of 100% at maturity, plus 100% of the rise in the underlying over the investment period, subject to a maximum overall return of 183%. If the final underlying level is lower than its initial level by 20% or more, the capital return is equal to 100% minus one percent for every one percent fall in excess of the initial 20% fall. Otherwise, the capital return is 100%, plus 100% of the absolute value of the fall in the underlying over the investment period.

On the annuities side, Goldman Sachs has introduced a new proprietary underlying in the US indexed annuities market. The Goldman Sachs Equity TimeX Index which was launched on 28 July offers exposure to the equity market while providing option-cost stability through volatility control and an excess return structure, said Pratik Pareek, head of insurance equity derivative sales at Goldman Sachs.

The index uses calendar-based signals and price patterns to dynamically adjust exposure to equities at a targeted volatility level of 10%, and ‘is subject to servicing and rebalancing costs and a deduction rate that accrues daily is applied’.

King & Shaxson Capital Markets (KSCM), the Spanish subsidiary of UK specialist investment firm King & Shaxson, has announced the first structured product programme listing on its KSCM Euro List multilateral trading facility (MTF), Dowgate.

BBVA Global Markets is the first issuer of structured products to utilise this service, listing its €2bn Structured Medium Term Note (SMTN) Programme on the platform.

‘Our commitment to BBVA and the rest of the European issuing community has helped us to design a service closely aligned with their operational and technological needs within the Mifid 2 regulatory framework; it gives us great satisfaction to be able to support them in maximizing the effectiveness of their products and their objectives,’ said Pablo Yravedra, CEO of KSCM.

Image: Boygostockphoto/Adobe Stock.