Notenstein Hires Topatigh, Wolfers for Structured Products Sales

Notenstein Private Bank Ltd., a unit of Switzerland’s Raiffeisen Group, hired Claudio Topatigh and Sinah Wolfers to join its new structured products business.

The pair, who worked in structured product sales at Zuercher Kantonalbank, will take up similar roles at the private bank in Zurich, they said in e-mailed responses to questions. They joined ZKB in 2007 from Swiss Capital Group AG.

St. Gallen, Switzerland-based Notenstein, which has distributed structured products issued by other banks for more than two decades, started selling its own securities in March after it became the biggest shareholder in Leonteq AG. (LEON) Its expansion into Switzerland’s $182 billion structured notes market comes as other institutions including Royal Bank of Scotland Group Plc and Rabobank Groep exit the business amid rising costs and tighter regulations.

“Although the structured products market can’t be considered a growing one because the share of products in investor portfolios has been declining for years, it still can be profitable for issuers that have strong links to domestic investors,” Topatigh said in a telephone interview.

Structured products now make up the smallest share of Swiss investor holdings in more than six years.
The securities accounted for 3.6 percent of banks’ client deposits in April, the latest month for which data from the Swiss National Bank is available, and compares with 4.5 percent a year earlier, the Swiss Structured Products Association wrote in a report published last week.


Debut Note

Notenstein issued its first structured notes on March 19, with securities tied to the stock performance of BASF SE, according to data compiled by Bloomberg. The bank is currently offering seven notes based on the share prices of companies from Glencore Xstrata Plc (GLEN) to Nestle SA paying coupons as high as 11.8 percent, according to its website.

“We’re confident that there are still interesting growth opportunities for a very solid Swiss issuer with a broad product offering,” said Patrik Ruethemann, the bank’s head of products and trading.

Topatigh said he will report to Ruethemann and Wolfers will report to him.

Notenstein entered the structured products market after it acquired a 20.25 percent stake in Leonteq, formerly EFG Financial Products Holding AG, for 70.2 million Swiss francs ($74.1 million) in March. Raiffeisen Group, which acquired Notenstein in January 2012, is rated Aa2 by Moody’s Investors Service, its third-highest investment-grade ranking, and acts as guarantor for the private bank’s securities.

High Costs

Edinburgh-based RBS (RBS) said last month it will stop issuing structured products because of high capital costs and expenses for the securities and will close the business or sell it. BNP Paribas SA, Commerzbank AG and Societe Generale SA are among banks considering bids for some or all of the business, people with knowledge of the matter, who asked not to be identified because the process is private, said earlier this month.

Switzerland’s Basler Kantonalbank also said in June it will stop selling structured products because rules governing the securities reduced their profitability. Dutch lender Rabobank also said it was closing its equity derivatives unit in March because new regulations for selling structured notes to wealthy individuals would involve increased costs.

Notenstein has no immediate plans to hire more structured products professionals, according to Ruethemann.

To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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