Few would pretend it has been anything other than a tough 12 months for structured products issuers – perhaps nowhere more so than in Asia-Pacific. The sudden devaluation of the renminbi a year ago, along with plummeting equity indexes at the end of 2015 and beginning of 2016, tested issuers' risk management and recycling capabilities to the limit.
BNP Paribas takes the overall house award for Asia this year in recognition of its commitment to continued growth and the lessons it has learned from previous cycles. The bank has continued to invest heavily in the region, whereas many of its European peers are retrenching, and has been buying up books of products and market-making positions from rivals as they retreat.
The award speaks to the calibre of the bank's risk management capabilities, which were tested by the moves in the renminbi this time last year. But where others felt the pain, the French lender had learned the lessons of crises past – particularly in foreign exchange products. For its ability to react quickly and help service the growing demands of Chinese corporates for sophisticated hedging solutions, the bank also scoops the forex house of the year award.
The Asia house of the year award speaks to the calibre of BNP’s risk management capabilities, which were tested by the moves in the renminbi this time last year
In equity derivatives, Credit Suisse reclaims its crown as the top house this year, an acknowledgment of the bank's superiority when it comes to innovation in risk recycling. It has come up with novel twist on the corridor variance swap structure, which it pioneered for recycling the risk in its autocallable books. By adding a knock-out feature, if the trade moves too far out of the money it will roll off the buyer's book, freeing up credit lines once again. Credit Suisse has sold a number of these structures to hedge funds and other buy-side users, making it this year's deal of the year winner as well.
The Swiss bank also scoops the inaugural fund derivatives house of the year award in recognition of its ability to capitalise on the thirst from mainland Chinese investors for access to alternative investments offshore, and its continued dominance in fund-of-hedge-funds financing across the region.
In rates and commodities, Societe Generale Corporate and Investment Banking's (SG CIB) preeminence continues. The bank's ability to combine access to underlyings with hybrid structuring prowess remains unmatched. Clients say it was first to offer them one of the big trading opportunities for the year: the reverse convertible note on the US dollar 10-year constant maturity swap rate – a bet on rising interest rates in the US.
In a sign that SG CIB's regional strength has lost none of its resonance, the bank also collected the Japan and Taiwan house of the year awards. In Japan, the bank continues to reap the benefits of its deep roots in the country and a sizeable onshore presence that is one of the largest of any international issuer, as well as its longstanding relationships with the country's insurance community. SG CIB has also begun to offer significant innovation in the field of fixed indexed annuity products.
Congratulations to all of this year's winners. Profiles of the winners will appear online on Risk.net later this week, and will be featured in the October/November issue of Structured Products magazine.
Roll of honour
The week on Risk.net, March 10-16 2018Receive this by email