UK financial institutions may lament record-low interest rates hitting their profits, but their treasury divisions have found a silver lining. The industry issued £130bn ($180.1bn)-worth of bonds in 2017, the greatest volume since 2011 according to Bank of England (BoE) statistics, as the buy-side lapped up anything offering a yield that might help meet their obligations to end investors.
Banks were among the main players. Some even seized the opportunity to pre-fund part of their 2018 requirements, but this does not mean they expect things to quieten down this year. “The UK economy is far more resilient than many would have thought 18 months ago, and provided the global unwind of quantitate easing continues to be measured and well signalled we don’t necessarily expect a big deviation from the market conditions that we have seen over the past 12 months,” says Tom Ranger, Santander UK’s treasurer.
