Leonteq, a Zurich-based fintech company that operates a marketplace for structured investment products, has lowered its profit expectations for this year due to a drop in customer demands in the second half of 2022.

The Swiss fintech firm recorded a continued decline in client demands due to the overall difficult nature of current market conditions. However, the firm said its monthly net income fee remained stable during the period.

“At the same time, Leonteq continued to maintain a prudent approach to risk management with its net trading result compensating for subdued client activity, particularly in the third quarter of 2022,” the company said in a business update. It added, “As a result, Leonteq expects to report a group net profit for 2022 in the area of the prior-year record result of CHF 155.7 million, equivalent to EPS of CHF 8.47 (previous guidance was to exceed the prior year’s group net profit).”

Swiss Fintech Leonteq Rejects Whitewashing Allegations

Earlier in October, whistleblowers in a Financial Times report accused Ernst & Young Global Limited, one of the Big Four accounting firms, of whitewashing suspicious trades it found in the company's records. However, Leonteq, in its response, rejected the allegations.

According to Leonteq, both internal and external investigations into its records found no evidence to corroborate the allegations. "Leonteq strongly refutes these allegations, which were first raised internally in 2021 and were thoroughly investigated by Leonteq's Compliance department," Reuters quoted the company as saying in a statement.

Leonteq Helps Swissquote Become a Structured Products Issuer

Meanwhile, earlier in the year, Swissquote became an issuer of structured Investment products by partnering with Leonteq. Under the collaboration, the financial services provider issued its own structured product under the brand, Yield Booster.

“Swissquote’s Yield Boosters are quanto derivatives, meaning the underlying is expressed in one currency, and settled in another. This gives investors exposure to foreign assets without a corresponding exchange rate risk,” Swissquote explained on its website.