Derivatives specialist Leonteq delivered better than expected first-half earnings and plans to raise fresh capital. This however means it won’t pay out a dividend.
Leonteq survived the crisis of 2016 and exceeded analyst expectations with a profit of 40.1 million Swiss francs ($40.1 million) in the first six months of the year. The result was driven largely by higher operating income and lower costs, Leonteq said in a statement on Thursday. The company also noted the rise in yields from its commissions and service business and improved trading volumes for the performance.
New CEO Lukas Ruflin said Leonteq can now switch «its entire focus to the future». The company is thus being positioned for future growth and has defined new financial targets for 2020.
Business Sectors Merged
It is also planning to raise fresh capital, with a net target of 118 million francs, and a core capital ratio of 23.3 percent. This however means Leonteq will be unable to pay out a dividend in the foreseeable future.
Leonteq is aiming to reduce the complexity of the company, and to this end will merge the banking solutions with the investment solutions units, leaving only two main business areas: investment solutions as well as insurance and wealth planning solutions.
Higher Spending, Higher Yields
Looking ahead, Leonteq is planning targeted investments in innovation and technology and will thus increase its IT specialist staff by around 10 percent over the coming 12 months. This in turn will push operating income up to 185 million francs, compared to the previous target of 180 million francs.
It will now aim for an operating income of 300 million francs by 2020, and a lowering of the cost-income-ratio below 70 percent.
