**Leonteq AG Plans Capital Return to Shareholders by 2027 Amid Strategic Changes**
Swiss derivatives firm Leonteq AG has announced its intention to return excess capital to shareholders by 2027 as part of a strategic overhaul following disappointing first-half profit results. The company aims for a payout ratio of approximately 30% once it surpasses a capital ratio of 15% by the first half of 2027. Currently, the CET1 capital ratio is at 14.4%.
In a recent earnings release, CEO Christian Spieler revealed the sale of the firm’s Japanese operations and the discontinuation of the “Bench” Savings Initiative, a pension solution developed in collaboration with Glarner Kantonalbank. Spieler noted that he identified “areas that required change” upon joining Leonteq earlier this year.
Leonteq is recognized for its low-cost derivative platform utilized by banks and insurance companies. However, the firm has faced significant challenges due to stricter regulations following allegations of facilitating tax evasion and money laundering. Over the past three years, Leonteq’s shares have plummeted by 70%, resulting in a valuation of under 500 million Swiss francs. The company has also experienced a decline in client activity due to uncertainties surrounding legacy compliance issues, which it anticipates resolving by the end of the year.
The divestiture of certain business segments may allow Leonteq to refocus on its core operations and move past the sanctions imposed by the Swiss financial regulator, Finma. Last year, Finma mandated the firm to relinquish approximately $9 million in illegally obtained profits and implement corrective measures, including severing ties with questionable distributors of its products. An auditor has been appointed to oversee compliance with these directives.
As Leonteq navigates these challenges, it is also reporting a capital figure for the first time since being required to adhere to a new regulatory framework that mandates backing risk-weighted assets with capital.
**FAQ**
*What is Leonteq AG’s plan for returning capital to shareholders?*
Leonteq AG plans to return excess capital to shareholders by 2027, targeting a payout ratio of about 30% once it achieves a capital ratio of 15%.