Leonteq Posts Record High First-Half Profits

Zurich-based structured finance specialist Leonteq’s first-half profit surged almost fifteen-fold to 74.4 million Swiss francs ($80.9 million) from 5.5 million francs a year earlier, it said in its results statement Thursday.

The previous record of 52.9 million francs was hit in the second half of 2018.

Turnaround

In the first half of 2020 Leonteq was hit hard by the coronavirus pandemic, resulting in its meager profit.

Other signs of the extent of the turnaround were operating income almost doubling on the year to 205.8 million francs, driven by net trading results flipping to a 34-million-franc profit from a 170.1-million loss. However, net fee income fell 20 percent on the year to 170 million francs.

Total turnover grew 3 percent to 15.9 billion francs, driven by a 26 percent increase in turnover in Leonteq’s own products to 7.8 billion francs.

Benefiting from Crypto Boom

Leonteq also profited from the boom in tokens and coins. Revenues from products with crypto assets as underlyings grew fifteen-fold on the year to 9.2million francs in the first half.

The company hit is capital target six months ahead of its guidance, with the capital base totalling 800.2 million francs as of June 30.

This means Leonteq can afford to be generous to its shareholders, It is proposing a shareholder distribution of over 75 centimes a share for 2021.

Leonteq said it was targeting a 2021 net profit of over 100 million francs.

Slowdown seen

«Leonteq remains mindful of potential challenges in a market environment characterized by record prices in equity markets, a potential increase in inflationary pressures and pandemic-related measures that are still in place. In this context, Leonteq expects its performance to normalize in thes econd half of 2021, which is usually characterized by a slower summer period followed by a pickup in client demand from September onwards,» the company said.

From 2022, Leonteq said it intended to move to a progressive dividend policy. with a payout ratio of over 50 percent of net profit.