BNP Paribas’ ability to customise and tailor-make a wide range of products has ensured an overwhelming victory in this category, for the first time.Though the size of non-flow structured products assets under management at private banks remain small compared to flow structured products, the former has given banks the opportunity to differentiate themselves through unique pricing and designing capabilities. BNP Paribas has stood out from the rest for, among other things, its ability to seize an opportunity in the equity markets that is usually available only to institutional investors, and repackage it for private banking distribution.
“We made dividends as a key focus – the bread and butter for our institutional clients – adjusted and customised it for our private banking clients. As a result, demand for the product was high since its launch this June,” says Stephane Honig, head of sales, wealth management and family offices, Asia Pacific.
He explained that by taking a classic structured product and enhancing the dividend exposure of the product, clients, particularly those invested in the European equity markets, were able to benefit.
“Clients were exposed to the upside of equity with partial downside protection, giving them on top of it 2.5 times the dividends of the stock,” added Etienne Grisey, head of equity derivatives structuring, APAC global markets at BNP Paribas.
In addition, Grisey said BNP Paribas also capitalised on the exchange-traded funds (ETFs) boom across Asia, particularly during the downturn in global markets.
“An opportunity was rolled out on ETFs in Hong Kong. Many investors were interested in shorting ETFs during the market correction which has led to high borrowing rates. BNP Paribas used these market conditions to launch a one month delta 1 product on these ETFs, enhanced by a 20% per annum coupon,” he said.
Indeed, Hong Kong’s ETF AUMs and product range both grew approximately 50% in 2015. Demand was driven primarily by China-related products, although the allure has undoubtedly worn off compared to earlier in the year.
With its wide and comprehensive breadth of bespoke products, coupled with the use of its inhouse single-dealer platform, Smart Derivatives, BNP Paribas is the deserved winner of this year’s Best Provider of Equity-linked Non-flow Structured Products award.