Structured products house of the year: Societe Generale

Roughly three years ago, Societe Generale embarked upon a project to build out its mass retail structured products business in Asia. That strategy is now beginning to bear fruit.In the aftermath of the Covid-19 pandemic, the French bank identified this segment as a new and durable source of growth and began investing in its platform, laying the groundwork for its current success. Through mass retail, SocGen now reaches a much wider customer base, meaning it is less reliant upon private bank and wealth management business channels.Overall, the mass retail franchise has grown by 130% in Asia over the past year and is now larger than the private bank and wealth management sectors, the bank says. In Hong Kong, SocGen’s equity-linked product business has shot up by more than tenfold over the past three years.This success in key mass retail markets such as Hong Kong and Singapore has been built upon automation, efficient structuring and innovation. To handle high volumes of small-ticket size products, the bank first of all invested heavily in its pricing and execution platform. A growing number of product payoffs are now fully automated, including some complex over-the-counter fixed-income structures, such as range accrual notes on constant maturity swap rates.“The mass retail segment is fundamentally a distribution business,” says Vallabh Shastri, co-head of structuring for products and solutions in Apac. “You need to be able to innovate a lot of payoff structures very quickly, deploy them and then fulfil very small-ticket notes at scale. Given the scale, automation is essential.” In Hong Kong’s retail listed structured products, the bank maintained its position as the number one issuer in callable bull and bear certificates (CBBCs) in 2025 and into 2026. The bank also introduced derivatives warrants linked to new underlyings, such as precious metals, while at the same time expanding its coverage of US single stock underlyings. The bank’s warrants and CBBCs franchise continues to be underpinned by a strong focus on investors’ education, with frequent investor training presentations held online in both Cantonese and Mandarin.In Singapore, meanwhile, the bank is the leading issuer of daily leveraged certificates (DLCs) listed on the Singapore Exchange (SGX), with close to twice as many issuances as all other issuers combined. The DLC product range has also been expanded over the past year, offering investors leveraged and inverse exposure to gold and silver for the first time on SGX.The diversification provided by SocGen’s push into mass retail has been accompanied by continued performance in its institutional structured products business. The strength of SocGen’s franchise in quantitative investment strategies (QIS) – particularly in Japan – has been one highlight.In QIS, uncertain and volatile markets across asset classes has left many SocGen clients seeking strategies that offer more downside protection, shifting demand away from more traditional carry-type strategies.But according to Jung Jin Yoon, head of global markets sales, Apac, innovation is no longer solely about the product and the payoff. It is now increasingly about how that product gets to market.“Today, innovation is about delivery,” says Yoon. “It is about wrapper and platform efficiency, enhancing speed and execution, and leveraging existing connectivity to reach a broader and more diverse investor base.The art of risk recyclingThe other pillar upon which the success of SocGen’s mass retail push has been built is what the bank refers to as alternative risk transfer (ART).Greater capacity to recycle and transfer risk ensures that rapid growth in the retail segment does not translate into a sudden hit on the bank’s balance sheet. This becomes particularly valuable for smaller-ticket retail products, where the ability to process and recycle risk efficiently is an important part of making the economics work at scale.“Once a robust client franchise and risk-transfer network are in place, the process becomes highly scalable,” says Shastri. “The differentiation comes from bespoke opportunities, where we can combine our distribution capabilities, market expertise and structuring know-how.”A good example of this approach came from the derivatives flow business, where the bank took on a particularly large and illiquid EUR/HKD cross-currency position.Rather than relying solely on its existing risk-transfer channels, it found a new way to recycle the exposure through structured products, distributing the risk through a multi-dealer platform for issuing repackaged structured notes, known as Spire.This effective approach to risk recycling has enabled SocGen to provide its sophisticated clients with efficient solutions while helping the bank to actively manage its risks to continue servicing its structured notes clients.“Over the past years, we have further enhanced our ability to recycle risk efficiently, enabling us to offer more attractive structures with less complexity and to expand our client franchise across institutional investors, including insurers, banks and corporates, as well as private wealth managers and, increasingly, mass-retail,” says Yoon.While risk recycling has long played an integral role in the success of SocGen’s structured products franchise in the region, Yoon adds that, this year, the bank has been able to offset even more risk, allowing it to offer ever more attractive structures with less complexity.“This has helped us grow our client base – from institutional clients, including lifers, banks and corporates, through to private wealth managers and, increasingly, mass retail,” says Yoon. 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