Press release: Leonteq publishes full-year 2024 results

PRESS RELEASE | LEONTEQ PUBLISHES FULL-YEAR 2024 RESULTS

Zurich, 6 February 2025 | Ad hoc announcement pursuant to Art. 53 LR

Leonteq AG (SIX: LEON) publishes today its full-year 2024 results and informs about its new enhanced regulatory regime. In a separate press release, Leonteq also announces the appointment of Christian Spieler as CEO. 

Financials 2024 vs 2023

• Slight increase in net fee income to CHF 214.4 million (up 1%)
• Net trading result decreased to CHF 21.5 million on the back of continued low market volatility (2023: CHF 36.6 million)
• Group net profit of CHF 5.8 million (2023: CHF 20.6 million)
• Strong shareholders’ equity at CHF 803.8 million (end-2023: CHF 780.1 million)
• Board to propose dividend of CHF 0.25 per share (2023: CHF 1.00) at AGM 2025; payout ratio of 76%

Strong client franchise

• Record number of 46,467 products issued (up 22% vs 2023); 23% of which initiated via LYNQS (2023: 15%)
• Record number of 275,820 client transactions processed on the platform (up 40% vs 2023)
• Turnover totalled CHF 27.6 billion (up 30% vs 2023)
• Revenues from new business initiatives grew by 22% compared to the prior year

New enhanced regulatory regime

• Effective 1 January 2025, Leonteq is subject to enhanced capital and large exposure requirements
• This regulatory regime takes into account Leonteq’s growth in size and the evolution of its business model and will be fully phased-in by mid-2026
• Leonteq fully meets the current capital and large exposure requirements thanks to the strong capital position it built up over the last years
• FINMA will additionally define final details of enhanced liquidity requirements in the coming months 
• Leonteq will be allowed to issue and account for hybrid capital and, once the liquidity regime is finalised and subject to regulatory approval, banking counterparties will be allowed to risk-weight exposure to Leonteq as if it were a bank or account-holding securities firm counterparty
• Leonteq welcomes this regime, as it provides a widely understood regulatory framework and further strengthens Leonteq’s risk profile for its clients, white-labelling partners and banking counterparties

Outlook

• In response to the newly applicable regime, Leonteq will introduce hedging exposure limits for its white-labelling partners over time, reduce business activities on certain own product offerings which carry higher risk weightings and, where required, introduce minimum margin requirements to ensure an appropriate return on allocated capital
• To address the expected reduction in some existing white-labelling partners turnover over time, Leonteq plans to increase its balance sheet-light business with its existing white-labelling partners, to onboard new partners, and to increase turnover in own products, and will introduce a cost rightsizing programme of up to CHF 10 million
• Leonteq expects to report a profitable result for 2025 on an underlying basis; the 2026 financial targets are withdrawn and new mid-term targets will be announced once the transition to the newly applicable regime has advanced
• Following the fully phased-in implementation of the regulatory regime, Leonteq expects to free up capital which it plans to return to shareholders

 

Lukas Ruflin, Chief Executive Officer of Leonteq, stated: “My final business year as CEO presented several challenges and following record years in 2021 and 2022, our results are clearly disappointing. At the same time, thanks to our loyal clients and partners we saw record high transactions and products issued on our platform. I am confident about the outlook for Leonteq as the new regulatory framework will further increase opportunities that our team will be able to leverage.”

 

Strong client franchise in a challenging environment

Leonteq recorded very high platform activity throughout 2024. The company issued 46,467 products (up 22% vs 2023) and processed 275,820 client transactions (up 40% vs 2023) – both record figures. Total turnover increased by 30% to CHF 27.6 billion, which was partially driven by exceptional transactions with a high notional of CHF 1.7 billion. However, the competitive market environment and the aforementioned transactions led to a further reduction in net fee margins to 70 basis points (2023: 90 bps). As a result, net fee income increased slightly by 1% to CHF 214.4 million in 2024 compared to CHF 213.2 million in 2023.

Leonteq recorded a reduction in net trading result with limited but positive contributions from both hedging and treasury activities totalling CHF 21.5 million compared to CHF 36.6 million in the prior year.

In preparation for the new regulatory regime, Leonteq extended available credit facilities, which negatively impacted its 2024 net interest result totalling CHF -0.4 million compared to CHF 6.5 million in 2023.

Total operating expenses (excluding provisions) declined by 6% to CHF 219.6 million in 2024 mainly reflecting a further reduction in discretionary compensation, a stricter approach to new hires and replacements, as well as a reduction in the number of contractors. Provisions increased by 49% to CHF 11.0 million mainly in connection with the conclusion of regulatory matters.

In line with the guidance provided on 12 December 2024, profit before taxes was CHF 7.9 million in 2024, down from CHF 18.4 million in 2023. Group net profit was CHF 5.8 million in 2024, compared to CHF 20.6 million in the prior year.

Shareholders’ equity remained strong at CHF 803.8 million as of 31 December 2024, compared to CHF 780.1 million as of 31 December 2023. Similarly, book value per share increased by 4% to CHF 46.10.

In line with its capital return policy, the Board of Directors will propose a dividend of CHF 0.25 (2023: CHF 1.00) per share for the financial year 2024 at the Annual General Meeting on 27 March 2025, which is to be paid in equal amounts out of retained earnings and capital contribution reserves. This corresponds to a payout ratio of 76% compared to the announced target of more than 50%.

 

New business initiatives with notable growth

In 2024, Leonteq continued to focus on key investments which are aimed at further diversifying revenue sources. These new business initiatives comprise activities with predominantly recurring revenue streams such as the AMC business, crypto assets and pension savings, activities with lower market risk exposure such as the balance sheet light-business and activities that address new client segments such as the fund derivatives and QIS business.

The company advanced its retail flow business initiative, which represents its single biggest investment in recent years. Following its acquisition of a 10% stake in BX Swiss from Boerse Stuttgart Group in December 2023, Leonteq assumed the role of exclusive market maker for equity securities and ETFs on BX Swiss in April 2024. In the period from April to December 2024, turnover on the exchange increased by more than 70%, compared to the same period of 2023. As part of its retail flow business initiative, Leonteq has listed the first few leverage products in Switzerland in the second half of 2024 and expects the full market launch in the course of 2025.

Leonteq also continued advancing its digital investing platform, LYNQS. The number of products initiated via LYNQS increased by 96% to 10,915 products in 2024 compared to 5,582 products in 2023. As a result, its click ‘n’ trade ratio improved to 23% in 2024 (2023: 15%). Further, the number of available third-party issuers for LYNQS users was expanded to include several internationally renowned banking groups. As a result, LYNQS users now have access to structured products from a total of 15 issuers.

The company’s ecosystem of white-labelling issuance partners was further expanded by new agreements with Saxo Bank and Bergos. Reflecting the continued efforts to diversify revenues across issuers, turnover from products issued by new partners increased by 35% to CHF 5.8 billion year on year whilst turnover from products issued by historic partners totalled CHF 6.9 billion in 2024 compared to CHF 6.0 billion in 2023.

Overall, revenues from new business initiatives grew by 22% to CHF 130.8 million and contributed 59% of Group economic revenues (excluding net result of hedging activities) in 2024 (2023: 47%). In particular the Group’s fund derivatives business, balance sheet-light business, crypto business and treasury initiative recorded strong performances with double digit growth rates versus 2023.

 

New enhanced regulatory regime

As a Swiss category 5 non-account holding securities firm, Leonteq was required to hold capital of CHF 20 million until 31 December 2024. Nonetheless, Leonteq consistently chose in recent years to operate with significantly higher capital levels (shareholders’ equity of CHF 804 million and eligible capital of CHF 740 million as of 31 December 2024), in alignment with its prudent internal capital framework.

Under the enhanced framework applicable to Leonteq since 1 January 2025, Leonteq is subject to capital and large exposure requirements as defined by the Swiss Capital Adequacy Ordinance. The Swiss Financial Market Supervisory Authority (FINMA) will additionally define final details of an enhanced liquidity regime in the coming months. Leonteq will also be allowed to issue and account for hybrid capital and, once the liquidity regime has been finalised and subject to regulatory approval, banking counterparties will be allowed to risk-weight exposures to Leonteq as if it were a bank or account-holding securities firm counterparty (versus a corporate counterparty which carries higher risk weighting charges).

This enhanced regulatory regime reflects Leonteq’s growth in size and the evolution of its business model since its foundation in 2007. In particular, it takes into account the significance that Leonteq has gained for the Swiss financial system, having processed more than 275,000 client transactions and generated turnover in investment products of approximately CHF 28 billion in 2024. Through its proprietary technology and service platform, Leonteq also acts as an important outsourcing partner for structured investment products to numerous large and mid-sized banks in Switzerland and abroad, which includes the offering of hedging services for products issued by its white-labelling partners. These hedging services create exposure for Leonteq towards its white-labelling partners and require Leonteq to provide liquidity for hedges.

In response to the newly applicable regulatory requirements and in order to achieve an appropriate return on allocated capital, Leonteq will reduce business activities on own product offerings which carry higher risk weightings and, where required, it will also introduce minimum margin requirements. From a liquidity and large exposure regulation perspective, Leonteq will introduce hedging exposure limits per white-labelling partner. Leonteq will continue to service all its existing partners and expects to further diversify its ecosystem through the addition of new partners.

Leonteq fully meets the current capital and large exposure requirements thanks to the strong capital position it built up over the last years. Leonteq is currently implementing the transition to capital calculations according to the fundamental review of the trading book (FRTB) standardised approach. This implementation will take time and Leonteq expects to publish its capital ratios and related disclosures with its half-year 2025 results. Leonteq will also consider in due course the issuance of a hybrid capital bond to optimise its capital structure.

Lukas Ruflin, CEO of Leonteq, stated: “Since we founded Leonteq with CHF 10 million in 2007, we have seen our shareholders’ equity grow to CHF 804 million, increased the annual turnover in investment products to CHF 28 billion and established ourselves as a recognised service and technology partner for banks. As a result of our successful expansion, we have outgrown our previous regulation and welcome the enhanced regulatory regime as both a logical and important next step in our development. The newly applicable framework further enhances our risk and credit profile for our banking counterparties, white-labelling partners and clients, while opening up further development opportunities in the years to come.”

 

Outlook

The enhanced regulatory framework will further strengthen Leonteq’s standing as a counterparty, product issuer and service provider while enhancing its risk, credit and liquidity profile. At the same time, the adjustment to business activities in the context of the new regime is expected to reduce platform turnover with existing white-labelling partners over time. To address these impacts, Leonteq plans to increase its balance sheet-light business with its existing white-labelling partners (which will reduce market risk exposure from its hedging activities) and will focus on increasing turnover from its own issued products as well as turnover generated with products issued by new white-labelling partners. Furthermore, Leonteq will introduce a cost rightsizing programme of up to CHF 10 million. Among others, this will include a realigning of its current project portfolio and prioritisation of initiatives. Overall, taking into account inflationary pressure in particular in relation to IT and market data costs, Leonteq expects to report total operating expenses (excluding one-off charges) of approximately CHF 220 million for the full year 2025. One-off charges include restructuring and regulatory transition costs which are estimated in the amount of approximately CHF 10 million in 2025.

Leonteq expects to report a profitable result for 2025 on an underlying basis (i.e. reported IFRS profit before taxes excluding one-off restructuring and regulatory transition charges). At the same time, Leonteq will continue to focus on harvesting its key investments made over the last years which are aimed at further diversifying revenue sources. The 2026 financial targets are withdrawn and new mid-term targets will be announced once the transition to the newly applicable regime has advanced.

The enhanced regulatory framework is expected to support Leonteq’s strategic ambitions to further increase recurring revenue streams and to intensify its activity addressing self-directed investors in the mid-term. Leonteq will become a more focused and profitable business with a further diversified client and revenue base as the company capitalises on new opportunities.

 

Capital to be freed up and returned to shareholders

During the period in which Leonteq was in discussions with FINMA about the enhanced regulatory regime, it would have been inappropriate to launch a new share buyback programme. Following the full phase-in of the enhanced regime (which will include the optimisation of the company’s capital structure and risk exposure) as well as the completion of the cost saving programme by mid-2026, Leonteq expects to free up capital which it plans to return to shareholders. In this context, Leonteq expects to define target capital ratios that will drive its future capital distribution policy. Until then, Leonteq’s capital return policy remains unchanged.

 

Overview of selected key figures and performance indicators

in CHF million unless otherwise stated	FY 2024	FY 2023	Change YoY
Total operating income	238.5	260.0	(8%)
of which net fee income	214.4	213.2	1%
of which net trading result	21.5	36.6	(41%)
Total operating expenses (excl. provisions)	(219.6)	(234.2)	(6%)
Total operating expenses	(230.6)	(241.6)	(5%)
Profit before taxes	7.9	18.4	(57%)
Group net profit	5.8	20.6	(72%)
EPS (CHF)	0.33	1.15	(71%)
Book value per share (CHF)	46.1	44.4	4%
Return on Equity (%)	1%	2%	(1 PP)
Products issued (#)	46,467	38,206	22%
Client transactions (#)	275,820	197,118	40%
Turnover (CHF billion)	27.6	21.3	30%
Platform assets (CHF billion)	13.4	11.7	15%
Economic revenues from new business	130.8	107.5	22%
Economic revenues from traditional business	92.4	119.1	(22%)

 

Overview of the new regulatory framework

• Capital: Leonteq is required to hold a capital of 10.5% of risk-weighted assets (including a common equity tier 1 buffer of 2.5% of risk-weighted assets) and to meet a 3% tier 1 leverage ratio as of 1 January 2025. Leonteq is allowed to temporarily apply the simplified standard approach for market risks, including a phase-in of the scaling factors over the transition period until mid-2026. Meanwhile, it will implement the standardised approach for market risk (incl. FRTB) in the course of 2025.
• Large exposures: Leonteq is required to meet large exposure rules, whereby large exposure to a single counterparty group may not exceed 25% of Leonteq's tier 1 capital.
• Liquidity: FINMA will define final details of an enhanced liquidity regime in the coming months.
• Ability to issue hybrid capital: Leonteq will be allowed to issue and account for hybrid capital, should it choose to do so. This new measure will increase Leonteq’s flexibility with regard to managing its capital structure in a cost-efficient and shareholder-friendly manner.
• Exposure reduction for banks: Once the new liquidity framework is finalised and subject to regulatory approval, banking counterparties will be allowed to risk-weight exposure to Leonteq as if it were a bank or account-holding securities firm counterparty (versus a corporate counterparty which carries higher risk weighting charges). This new measure will reduce banking counterparty capital charges when working with Leonteq as a counterparty.

Leonteq full-year 2024 results press and analyst conference

A press and analyst conference call with Lukas Ruflin, CEO of Leonteq, and Hans Widler, CFO of Leonteq, will be held today, 6 February 2025, at 9.30 a.m. CET.

The presentation, including slides, can be followed live via audio webcast.

If you wish to join the phone Q&A session, please dial in using the following numbers and ask for “Leonteq full-year 2024 results”:

• Dial-in number Switzerland: +41 (0)58 310 50 00
• Dial-in number Germany: +49 (0) 69 505 0 0082
• Dial-in number UK: +44 (0) 207 107 06 13

This press release, the full-year 2024 results presentation and the Annual Report 2024 are available at: https://www.leonteq.com/fullyearresults

A digital playback of the telephone conference will be available for one month at: https://www.leonteq.com/fullyearresults

 

Important dates

27 February 2025 Sustainability Report 2024

27 March 2025 Annual General Meeting 2025

31 March 2025 Ex-dividend date

01 April 2025 Record date

02 April 2025 Payment date

24 July 2025 Half-year 2025 results

 

Alternative Performance Measures used in this press release

The definitions of Alternative Performance Measures used in this press release are provided in the Annual Report 2024 on page 10.

 

 

CONTACT

Media Relations 

+41 58 800 1844

media@leonteq.com

 

Investor Relations 

+41 58 800 1855

investorrelations@leonteq.com

 

 

LEONTEQ

Leonteq is a Swiss fintech company with a leading marketplace for structured investment solutions. Based on proprietary modern technology, the company offers derivative investment products and services and predominantly covers the capital protection, yield enhancement and participation product classes. Leonteq acts as both a direct issuer of its own products and as a partner to other financial institutions. Leonteq further enables life insurance companies and banks to produce capital-efficient, unit-linked pension products with guarantees. The company has offices and subsidiaries in 13 countries across Europe, Middle East and Asia. Leonteq AG has a BBB credit-rating by Fitch Ratings, was assigned with an AA ESG-rating by MSCI and is listed on the SIX Swiss Exchange (SIX: LEON).

www.leonteq.com

 

 

 

DISCLAIMER

This press release issued by Leonteq AG (the “Company”) serves for information purposes only and does not constitute research. This press release and all materials, documents and information used therein or distributed in the context of this press release do not constitute or form part of and should not be construed as, an offer (public or private) to sell or a solicitation of offers (public or private) to purchase or subscribe for shares or other securities of the Company or any of its affiliates or subsidiaries in any jurisdiction or an inducement to enter into investment activity in any jurisdiction, and may not be used for such purposes. Copies of this press release may not be made available (directly or indirectly) to any person in relation to whom the making available of the press release is restricted or prohibited by law or sent to countries, or distributed in or from countries, to, in or from which this is restricted or prohibited by law.

This press release may contain specific forward-looking statements, e.g. statements including terms like “believe“, “assume“, “expect“, "target" “forecast“, “project“, “may“, “could“, “might“, “will“ or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the Company or any of its affiliates or subsidiaries and those explicitly or implicitly presumed in these statements. These factors include, but are not limited to: (1) general market, macroeconomic, governmental and regulatory trends, (2) movements in securities markets, exchange rates and interest rates and (3) other risks and uncertainties inherent in our business. Against the background of these uncertainties, you should not rely on forward-looking statements. Neither the Company nor any of its affiliates or subsidiaries or their respective bodies, executives, employees and advisers assume any responsibility to prepare or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this press release or to adapt them to any change in events, conditions or circumstances, except as required by applicable law or regulation.