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New Raiffeisen Chairman Guy Lachappelle and CEO Heinz Huber haven't addressed the Leonteq issue; earlier this year, Lachappelle said simply that the bank isn't in any hurry with the disposal.

The view rankles within Leonteq, which is keen for clarity from Raiffeisen. The current will-they-won't-they-sell speculation is harmful for Leonteq because it effectively prevents other potential investors from stepping in, is the company's thinking.

Murky Prospects, Frayed Ties

Any new investor will be mindful that Raiffeisen could roil trading in Leonteq's stock with a quick sale – if the bank opts to dump its shares in a series of block trades, for example. By contrast, the current situation – a major shareholder dithering over what to do – would behoove a hedge fund looking to short-sell stock.

A spokesman for Leonteq didn't comment. But it is clear that the close ties between the structured products provider and the Swiss bank – which clinched a distribution agreement three years ago – are fraying. For example, Leonteq executives repeatedly prodded Raiffeisen to nominate a replacement for Paulo Bruegger, a board representative for the bank who stepped down suddenly in February.

Board Back-and-Forth

The bank said it would name a replacement for Bruegger, who fell victim to a management cull following the Vincenz scandal, «in due course». Despite Leonteq's entreaties privately to do so, including directly with Lachappelle, Raiffeisen never nominated a replacement board member.

Raiffeisen once wielded heavy influence at Leonteq with both Vincenz and Gisel as directors. It has now entirely opted out, despite its 29 percent stake. A spokeswoman for the bank reiterated a previous statement to finews.com that Leonteq is still a key strategic stakeholding for Raiffeisen.

Avoiding Mistakes

Lachappelle and Huber will want to avoid making any big blunders at any cost, after Switzerland's financial regulator issued a detailed, stunning chronicle of Raiffeisen's failings last year. The departure of Raiffeisen top executive Bruegger from Leonteq's board was too close to the nomination deadline to carefully vet a potential replacement, according to people familiar with the duo's thinking.

Raiffeisen's dallying does no favors to Leonteq, nor to the bank: the slumping share price remains a balance sheet risk, and Leonteq will continue to have trouble attracting new investors to its turnaround story until the relationship is clarified – one way or another.