DZ Bank AG, Standard Chartered Plc and UniCredit SpA sold the most structured notes in at least three years in 2012, bucking the slump to a decade-low suffered by the rest of the market.
Germany’s DZ Bank raised $16.6 billion from notes outside the U.S. last year, compared with $15.1 billion in 2011, while Britain’s Standard Chartered issued $1.8 billion, $373.6 million more than the previous year. Sales by UniCredit, Italy’s biggest bank, rose to $2.8 billion from $2 billion, according to data compiled by Bloomberg that exclude notes where the principal returned can vary.
Austria’s Erste Group Bank AG, Sweden’s Nordea Bank AB and Russia’s VTB Group also sold more last year than in 2011, Bloomberg data show.
“The fact that banks like StanChart, Nordea and Erste are showing higher numbers could be because they’ve made a strategic decision to enter the market with more force,” said Moritz Seibert, a Munich-based partner at asset-management firm Aquantum AG and the former U.S. head of equity-derivatives structuring at Royal Bank of Scotland Group Plc in Stamford, Connecticut.
DZ Bank, which as one of two clearing organizations for Germany’s cooperative banks provides structured products directly to more than 900 local lenders, sold and arranged the most structured notes in 2012, Bloomberg data show. The Frankfurt-based lender has been the biggest seller of the securities every year since 2009.
Silvia Conesa, a spokeswoman for DZ Bank in Frankfurt, said the bank’s sales growth was due to growing demand from those cooperative banks.
Credit-linked notes tied to emerging-market government bonds comprised the bulk of Standard Chartered’s sales. The London-based bank issued $397.7 million of notes tied to South Korea’s debt and $139.3 million of securities linked to Indian bonds, according to data compiled by Bloomberg.
Frankfurt-based Deutsche Bank AG was the second-biggest seller of these structured notes in 2012, with $5 billion of issuance, though that was the bank’s lowest tally in 12 years, Bloomberg data show. Stuttgart-based Landesbank Baden-Wuerttemberg sold the smallest amount of structured notes since 2009 at $2.9 billion.
Barclays, the U.K.’s second-biggest bank, sold $2.59 billion of notes in 2012, the smallest amount in eight years, Bloomberg data show. The London-based lender has been among the top five issuers of structured notes every year since 2006.
Nick Bone, a Deutsche Bank spokesman in London, Silvia Lamberti, a spokeswoman for UniCredit and Jodie Gray of Barclays declined to comment. Standard Chartered officials didn’t respond to three e-mailed requests for comment.
Structured notes package debt with derivatives to offer customized bets to investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, currencies and commodities.
Buyers of the notes, which include institutional investors as well as high net-worth individuals, bear the risk both of the bank selling the securities and the underlying assets.