Leonteq grew its total structured products turnover by 23% to CHF15.9bn (€13.6bn) in the first half of 2018 on the back of 15,746 new launches (+24%), according to the firm's half year results.

Total platform assets (volume outstanding) reached a record CHF13.2bn as at 30 June 2018, up from CHF11.4bn at end-2017. 'This increase mainly reflects the good progress achieved with its newly onboarded issuance partners Crédit Agricole CIB and Standard Chartered Bank, as well as a 17% increase in the volume of Leonteq's own products outstanding to CHF 3.5 billion as at 30 June 2018,' stated Leonteq.

The Investment Solutions business posted a 21% growth in net fee income to CHF114.2 million in the first half of 2018, despite fee income margins decreasing from 90 basis points to 88 basis points. The Banking Solution business reported a net fee income rise by 27% to CHF18.4 million which was due to 21% growth in turnover combined with an increase in fee income margins to 63 basis points from 60 basis points.

In the Insurance & Wealth Planning Solutions business, Leonteq's net fee income grew by 24% to CHF13.1 million. Serviced net new policies increased by 41% and 37,150 policies were outstanding on the platform as at 30 June 2018. In its home market Switzerland, the firm increased revenues by 27% to CHF63.3 million in the first half of 2018. In Europe the firm generated a 29% increase in revenues to CHF64.3 million and in Asia it posted an 8% decrease in net fee income year on year to CHF 18.1 million.

During the first half of 2018, Leonteq also expanded its presence in Asia with the opening of an office in Tokyo and it commenced onshore operations in Japan through a newly established subsidiary Leonteq Securities (Japan) Limited on 1 May 2018.

The Swiss firm stated it has achieved the 'planned turnaround of the business' over the past 12 months, while addressing 'balance sheet restrictions and product limitations' with issuance partners including Crédit Agricole CIB and Standard Chartered. The firm also 'succeeded in increasing its business volumes while conducting a rightsizing program' and 'improved its corporate governance processes and disclosures', and appointed Lukas Ruflin (pictured) as CEO replacing Jan Schoch.

The firm, however, warned of continued margin pressure on the back of an increasingly competitive environment, regulatory changes and a change in the cooperation mix of its issuance partners, and announced a plan on delivering on 'four major strategic priorities'

In order to reduce the complexity of the organisation, Leonteq plans to merge its Banking Solutions business line with its Investment Solutions business line. In addition, the Markets function within the group that provides trading, treasury and quantitative analytics services is expected to report directly to the CEO.

As part of its scalability plans, Leotneq will also push its Smart Hedging and Issuance Platform (Ship)
which is aimed at reducing its hedging exposure by offering Leonteq's issuance partners the opportunity to enter into hedging transactions for their issued products with external hedging partners.

In addition, the Swiss firm is seeking to grow its business through additional investments in innovation and technology, and will also launch a capital increase by way of a rights offering, which is expected to generate net proceeds of approximately CHF118 million.

'The structured products business is expected to become a volume-driven business with margins likely to decline further,' stated Leonteq. 'At the same time, the growth in platform assets on the back of its cooperation with issuance partners is leading to an increase in risk-weighted assets.'

'We have defined clear strategic priorities for the short- and mid-term to position our company for further sustainable growth and we have announced a new set of financial targets for 2020,' said Lukas Ruflin, Leonteq's chief, in a statement.

Leonteq has launched over 700 products worth an estimated $1.5bn, across Switzerland, Italy and France, excluding leverage and flow products, according to SRP data. Leonteq also has over 4,000 live products across several European markets, including Switzerland, Germany, Austria, Italy and France, according to SRP data.

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