Leonteq FY19: all-time high in platform assets

Leonteq issued  a record 36,574 structured products in 2019, up 29% compared to the 28,360 structures launched in the previous year. It also reached an all-time high in platform assets of CHF14.7 billion (CHF15 billion) as of December 31 2019, up from CHF11.9 billion at end-2018.

Total turnover generated by the company (aggregate notional amount of structured products issued and traded by Leonteq and its platform partners through Leonteq’s platform) stood at CHF30.3 billion, another record and an increase of five percent compared to the previous year. 

Turnover generated with own issued products increased significantly by 28% to CHF11.5 billion in 2019.

In its home market Switzerland, Leonteq distributed more than 3,800 structured products worth an estimated CHF3.2 billion during 2019, according to SRP data (FY2018: CHF2.4 billion from 3,244 products). Leonteq also sold products in Austria, Germany, France and Italy while in Asia Pacific it was active in Hong Kong SAR, Singapore and Thailand.

Leonteq experienced a subdued start to the year but saw recovering client demand in the second half which resulted in relatively stable net fee income of CHF264.9m compared to CHF272.5m in 2018. In the absence of hedging contributions primarily driven by the low volatility environment, net trading result declined by CHF 24.6m to CHF-3.2m and as a result, total operating income decreased by nine percent to CHF 256.2m in 2019.

Leonteq generates net fee income primarily by manufacturing and distributing its own products, as well as products issued by its banking partners, ie Aargauische Kantonalbank, Cornèr Bank, Crédit Agricole CIB, Deutsche Bank, EFG International, JP Morgan, PostFinance, Raiffeisen Switzerland, and Standard Chartered Bank. Furthermore, Leonteq generates fee income through its digital platform that provides unit-linked retail products with financial guarantees to insurance companies, ie Helvetia and Swiss Mobilair.

In its first year of operation, the company’s smart hedging issuance platform (Ship) project, which is designed to reduce hedging exposure by offering Leonteq’s issuance partners the opportunity to enter into hedging transactions for their issued products with external hedging partners, recorded more than 2,600 transactions in 2019 with a total turnover of approximately CHF1 billion.

Ship made ‘good’ progress in 2019 with a total of six leading investment banks providing external quotes for around 11% of all daily automated transactions. Of these hedging counterparties, three are currently executing trades. The initiative is on track to be fully operational by mid-2020.

In 2019, Leonteq launched the first modules and several new features of its new digital marketplace Lynqs which provides clients access to services including a new lifecycle management module that enables them to monitor structured products and offers a high level of flexibility, irrespective of product type or issuer. In addition, the lifecycle management services now allow clients to upload third-party products to Lynqs, giving them a complete overview of their structured products portfolio across all issuers.

‘We demonstrated our resilience in a competitive market environment in 2019 and once again achieved a solid financial performance,’ said Lukas Ruflin (pictured), chief executive officer of Leonteq, adding that Leonteq has made good progress in its ongoing business transformation.

Leonteq currently operates in 11 locations worldwide and is headquartered in Zurich with offices in Amsterdam, Frankfurt, Geneva, Guernsey, Hong Kong, London, Monaco, Paris, Singapore and Tokyo. Leonteq aims to increase its footprint in Europe and Asia by taking preparatory steps to open two new office locations in Dubai and Milan in 2020, subject to regulatory approval.

Click the link to read the Leonteq full year 2019 results, presentation, and annual report (Leonteq AG/Leonteq Securities).