Leonteq Declines After Ending Cooperation With Singapore's DBSby
Leonteq AG, a Swiss financial technology company, has ended efforts to create a distribution system for structured products with Singapore’s DBS Group Holdings Ltd. and other business partners. The European company’s shares fell the most ever.
The companies stopped cooperating with each other because of "diverging interests regarding business models and exclusivity," Leonteq said in a statement on its website on Thursday. Ending the relationship will have a "non-material" impact on Leonteq’s results, the company said.
DBS Group is a financial company that offers services including mortgage financing and corporate advice. It’s the primary dealer in Singapore government securities, Bloomberg data show. Leonteq, based in Zurich, creates, distributes and settles structured-investment products.
Leonteq declined as much as 25 percent to 87.80 Swiss francs in Zurich, reducing the company’s market value to about 1.4 billion francs ($1.4 billion)
The company will continue buy-side automation development on its own and with partners including Avaloq Group AG, according to the statement.
Leonteq’s 2015 operating income rose 10 percent to 219.7 million francs, according to the statement. Return on equity fell to 17 percent from 25 percent a year earlier, the company said in a presentation. Revenue was little changed at 20.5 billion francs.