Leonteq generated operating income of 124,3 million francs in the first half of 2025. Compared to the same period last year, this represents a decline of 7 percent, the company announced on Thursday.

Lower commission and service fee income was partially offset by an increase in trading income. Commission and service revenues fell 25 percent to 88.0 million francs, which the company attributed to lower margins and a reduction in large-ticket transactions.

Significant positive contributions were seen in hedging activities, mainly due to the short-term spike in market volatility in April 2025. As a result, trading income rose to 39,5 million francs, up from 11,2 million a year earlier.

Cost Reductions

The lower operating result was accompanied by a 9 percent reduction in operating expenses, which came in at 109,7 million francs. On an underlying basis—excluding restructuring and regulatory costs of 2,5 million francs—costs declined by 11 percent.

Pre-tax profit according to IFRS rose by 9 percent to 14,1 million francs, while net profit declined by 41 percent to 9,3 million francs, due to higher taxes.

Multiple Challenges

«Leonteq’s results for the first half of 2025 reflect several challenges that have accumulated in recent years,» said CEO Christian Spieler. Implementing the new regulatory regime requires significant internal resources, and uncertainties related to legacy compliance issues have also impacted client activity.

«We expect these issues to be resolved in the coming months. We have taken targeted measures to restore profitability while maintaining strong discipline around regulatory requirements,» Spieler added.

New Regulatory Regime

The company is currently implementing a new regulatory regime, which affects its eligible capital. As of June 30, 2025, risk-weighted assets (RWA) totaled 4,6 billion francs, of which 2,7 billion were attributed to market risk. The CET1 capital ratio and total capital ratio stood at 14,4 percent, well above the regulatory minimum requirements of 7,0 percent for CET1 and 10,5 percent for total capital, Leonteq emphasized.

The company also reported progress in its discussions with FINMA, the Swiss Financial Market Supervisory Authority, regarding the final details of a business-specific regulatory liquidity framework.

Strategic Plan Defined

Leonteq has defined strategic priorities and developed an implementation roadmap for the next 12 to 24 months to restore profitability. The plan focuses on three core areas: downsizing underperforming units, optimizing established activities, and expanding promising initiatives.

This includes, for example, the exit from the Japanese market via a sale, and the withdrawal from the «Bench» pension solution by 2026. By the end of 2026, approximately 30 percent of employees (excluding sales and trading) are expected to be based at the service center in Lisbon.

For the 2024–2027 period, Leonteq is targeting an average annual revenue growth of 7 percent, with a largely unchanged cost base. By 2027, the company aims to achieve a pre-tax profit of 60 to 80 million francs and a return on tangible equity (RoTE) of around 10 percent.

The dividend policy has also been revised. The new target is an ordinary dividend payout ratio of approximately 30 percent of group profit. If the CET1 capital ratio exceeds 15 percent, share buybacks are to be initiated in the following year.