Von Hans-Ueli Läppli
2024 was a year that Leonteq, the Zurich-based financial boutique, would rather forget. Sliding margins, a running Finma procedure and drastic cost-cutting measures have pushed the company to the brink.
Now, a new CEO is to bring about a turnaround – but the challenges are enormous.
Leonteq, once a shining star in the derivatives trade, is now fighting for survival. The company’s profitability is almost entirely gone, the NZZ reports. Not only the tough competition, but also new regulatory requirements, which are increasing the costs and hampering growth, are to blame. The financial supervisory authority Finma has placed Leonteq under a banking-like regulation – a blow that hits the company hard.
Lukas Ruflin, the outgoing CEO, looks back on a disappointing last year.
“My last year as CEO was marked by challenges and our results are undoubtedly disappointing. At the same time, we were able to record a record number of transactions and product issuances thanks to our customers and partners. I am confident that Leonteq will successfully use the new regulatory framework” he said.
Despite the dismal numbers, he points to a record number of transactions and product issuances. Ruflin is making way for Christian Spieler, a seasoned finance professional, who previously worked as a consultant. Spieler brings experience from JP Morgan, Lehman Brothers and Citigroup – but whether that’s enough to pull Leonteq out of the crisis remains very questionable.
The numbers speak a clear language: the annual profit sank from 36.6 million francs in the previous year to a meager 5.8 million francs. The margins have shrunk to 70 basis points and the trading result has plummeted by 41 percent.
Leonteq is reacting with drastic cost-cutting measures: salaries are being cut, external consultants are being reduced and the dividend is being cut from 1 franc to 25 rappen. Even these measures can hardly brake the decline.
The Finma has concluded its procedure against Leonteq and found severe violations of risk and liability commitments. The authority has taken in profits of 9.6 million francs. The new regulatory requirements will further burden the business, particularly the transaction volumes with existing partners. Leonteq is trying to compensate for this through new partnerships and cost savings – but the future remains uncertain.
For 2025, Leonteq expects a “profitable result” but it does not give concrete numbers. The financial goals for 2026 were withdrawn and new goals will only be defined after the “stabilization of the new regime.”
The Leonteq share has already fallen by over 35 percent in the last year and the decline seems not yet over.
The course of the Leonteq share is heading towards the abyss and is experiencing daily significant losses, comparable to the negative development of the Credit Suisse share.
Leonteq is in a nearly hopeless situation. The once proud derivatives house is struggling with declining profits, regulatory hurdles and a tarnished image. Christian Spieler has the unenviable task of turning the ship around – but whether he can succeed remains more than questionable. For the shareholders, particularly the Raiffeisen Group, which holds almost 30 percent of the shares, the situation is more than unpleasant. They are trapped in a company that is sinking deeper and deeper into the crisis.
2024 was a year to forget for Leonteq. Whether 2025 will be better, remains to be seen – but the hope is fading with every bad news.