(Bloomberg) — Swiss derivatives firm Leonteq AG said it would seek to return excess capital to shareholders by 2027 as part of a strategic revamp, after it posted first-half profit that missed estimates.

Leonteq targets a payout ratio of about 30% beyond a capital ratio of 15% from the first half of 2027, it said in an earnings release on Thursday. The current CET1 capital ratio stands at 14.4%. 

Chief Executive Officer Christian Spieler also announced the sale of the firm’s Japanese business and an exit from the “Bench” Savings Initiative, a pension solution it offered together with Glarner Kantonalbank, saying he saw “areas that required change” when he started at Leonteq earlier this year.

Leonteq is known for developing a low-cost derivative platform used by banks and insurance companies, though has seen its business model upended by tighter regulation after allegations that it has aided tax evasion and money laundering. The firm’s shares have lost 70% over the past three years, leaving its valuation at under 500 million Swiss francs. 

Uncertainty around legacy compliance matters also weighed on client activity, according to the statement, adding that Leonteq now expects the issues to be resolved by end of the year.

For Leonteq, a sale of some of its businesses may enable the firm’s core business to move beyond the sanctions issued last year by Swiss regulator Finma, in which it was forced to hand over about $9 million in illegally obtained profits. In addition, the firm has been forced to scale back previously-lucrative business, steps that led to it issuing a profit warning in December. 

The firm is reporting a capital number for the first time since it was ordered to follow a new regulatory regime requiring it to back risk-weighed assets with capital.

Regulators last year said the firm had been doing business with “dubious, unregulated” distributors of its products. Finma ordered the firm to take a raft of corrective measures including cutting off business relationships with those distributors, and said it would appoint an auditor to monitor compliance. 

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