Leonteq (LEON) H1 2025 earnings summary

Executive summary

• Underlying profit before taxes rose 33% year-on-year to CHF 17–17.1 million in H1 2025, with a robust CET1 ratio of 14.4% and decisive cost reduction actions supporting profitability.

• Strategic focus on resizing underperforming areas, optimizing established activities, and expanding high-potential initiatives, including new partnerships and product launches.

• Legacy compliance issues and regulatory changes remain a challenge but are expected to be resolved by end-2025, with ongoing FINMA scrutiny and compliance audits.

• New financial targets for 2027 include profit before taxes of CHF 60–80 million and a return on tangible equity of ~10%.

• Plans to return excess capital to shareholders via share buy-backs in H1 2027, subject to CET1 ratio thresholds.

Financial highlights

• Total operating income declined by 7% year-on-year to CHF 124–124.3 million, mainly due to lower net fee income and net interest result, partially offset by a surge in net trading income.

• Underlying operating expenses decreased 11% to CHF 107–107.2 million, reflecting cost discipline and lower provisions.

• Net fee income dropped to CHF 88 million, driven by margin reduction and fewer large ticket transactions.

• Net trading result increased to CHF 39.5 million, up by CHF 30 million from previous semesters due to higher market volatility.

• Group net profit was CHF 9.3 million, with EPS at CHF 0.53, both down year-on-year.

Outlook and guidance

• On track to meet full-year 2025 guidance, with underlying total operating expenses targeted at CHF 220 million and up to CHF 10 million in one-off costs.

• Aims for 7% compound revenue growth from 2024–2027 with a broadly flat cost base and a return on tangible equity of ~10% by 2027.

• Confident in resolving legacy compliance matters by end of 2025, expected to support H2 2025 and beyond.

• Ordinary dividend payout ratio set at ~30% of group net profits from 2025 onwards, with share buy-backs if CET1 ratio exceeds 15%.

• First excess capital return to shareholders targeted for H1 2027.