Swiss fintech Leonteq posted a first-half group profit that exceeded analyst expectations, although the results were less favorable than a year ago. Lower market volatility weighed on the results.
Leonteq reported a first-half net profit of 28.8 million francs which was more than the 26 million analysts were expecting but fell short of the 38.4 million in the comparable period last year according to a media release Thursday.
Trading income fell 90 percent to 17.8 million in the first half, and net fee income increased 7 percent to 123.9 million, resulting in an operating income of 147.1 million, half of what it was a year ago. While client activity helped fee income, «the decrease in trading result reflected materially lower market volatility compared to unprecedented market conditions in the prior-year period.»
Exceptional Situation in 2022
«Leonteq’s performance in the first half of 2023 underlined the strength of our broad-based structured products offering and advanced platform services, supporting higher fee income on solid client activity. At the same time, we saw low levels of market volatility compared to the exceptional situation a year ago, which resulted in normalized contributions from hedging and treasury activities. We will continue to invest in our international client franchise and consistently execute our 2026 growth strategy», said CEO Lukas Ruflin.
Legal Provisions
The company managed to reduce its operating expenses to 121.9 million francs during the first half on lower performance-driven variable costs and «the absence of significant provisions for legal cases.» As reported in late June when it lowered its guidance, Leonteq expected profit before taxes in the range of 40 to 70 million francs for this year from 70 to 100 million previously.
