(Bloomberg) — Swiss derivatives agency Leonteq AG mentioned it might search to return extra capital to shareholders by 2027 as a part of a strategic revamp, after it posted first-half revenue that missed estimates.
Leonteq targets a payout ratio of about 30% past a capital ratio of 15% from the primary half of 2027, it mentioned in an earnings launch on Thursday. The present CET1 capital ratio stands at 14.4%.
Chief Govt Officer Christian Spieler additionally introduced the sale of the agency’s Japanese enterprise and an exit from the “Bench” Financial savings Initiative, a pension resolution it provided along with Glarner Kantonalbank, saying he noticed “areas that required change” when he began at Leonteq earlier this yr.
Leonteq is understood for growing a low-cost by-product platform utilized by banks and insurance coverage firms, although has seen its enterprise mannequin upended by tighter regulation after allegations that it has aided tax evasion and cash laundering. The agency’s shares have misplaced 70% over the previous three years, leaving its valuation at below 500 million Swiss francs.
Uncertainty round legacy compliance issues additionally weighed on shopper exercise, based on the assertion, including that Leonteq now expects the problems to be resolved by finish of the yr.
For Leonteq, a sale of a few of its companies could allow the agency’s core enterprise to maneuver past the sanctions issued final yr by Swiss regulator Finma, during which it was pressured handy over about $9 million in illegally obtained earnings. As well as, the agency has been pressured to reduce previously-lucrative enterprise, steps that led to it issuing a revenue warning in December.
The agency is reporting a capital quantity for the primary time because it was ordered to comply with a brand new regulatory regime requiring it to again risk-weighed property with capital.
Regulators final yr mentioned the agency had been doing enterprise with “doubtful, unregulated” distributors of its merchandise. Finma ordered the agency to take a raft of corrective measures together with slicing off enterprise relationships with these distributors, and mentioned it might appoint an auditor to observe compliance.
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