Ladies and gentlemen, welcome to the Leonteq Half Year 2020 Results Conference Call. I am Sabrina, the conference call operator. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Dominik Ruggli, Head of Investor Relations, Communications, and Marketing of Leonteq. Please go ahead, sir.
Good morning, everyone, and welcome to the press conference call of Leonteq's half year 2020 results. All presentation materials, as well as the half year report, can be found in the investor relations section of our website. Here with me today are Chief Executive Officer, Lukas Ruflin, and Deputy CEO and Chief Financial Officer, Marco Amato. We will start the presentation with an overview of the highlights of the first half of 2020. We'll discuss the financial performance of H1 2020, continued by a business update and a look at our strategic priorities before we close the presentation with a summary and an outlook. The presentation will last about 45 minutes, after which we are happy to take your questions. We intend to close the conference call at 11:00 A.M. It is now my pleasure to hand over to our CEO, Lukas Ruflin.
Thank you very much, Dominik. Good morning, ladies and gentlemen, dear shareholders, analysts, and media representatives. Before we start today's presentation, I would likely quickly look back two years. If you recall, in mid 2018, we shared with you our plans regarding the journey we were embarking on as a company. A journey to overcome certain limitations we faced and to grow and transform our business. At today's press conference, we will highlight to you the progress we have made through a clear and focused execution of our strategic priorities, which is visible with the strategic progress we made in the first half of 2020. Let me start on page four of the presentation by outlining some of the key takeaways from the first half 2020. The year started out well, and we were on track to deliver our half year results according to plan.
Beginning from March 2020, however, the coronavirus became a global pandemic, resulting in turmoil in global capital markets, affecting all asset classes underlying structured products. As you will recall, we were early on with updating you in early April 2020 about how our business was impacted amidst the coronavirus situation. We also announced back then that we expected our results to come in around breakeven level. In line with this guidance, our net profit for the first half year of 2020 was CHF 5.5 million. Our net fee income reached a record of CHF 230 million, which is a 76% increase compared to the first half 2019. On the trading side, we reported a net trading result of minus CHF 107 million. We will come back to that shortly. This was driven by hedging-related losses, driven by the oil price shock, and unexpected cancellation of dividend payments.
We recorded an overall increase in hedging-related costs, which were only partially offset by our structural long volatility position. On the cost side, our total operating expenses were up 5% to CHF 98.7 million. This increase is driven by investments in hiring and our key strategic initiatives. On the business and strategy side, we are encouraged by the further strengthening of our client franchise, the significant progress we have made during the first half of 2020 by diligently executing the strategic priorities we defined two years ago. In the first half of 2020, in particular in March and April, we delivered full client service at all times under unprecedented market conditions. In this environment, we recorded an increase of 58% to about 115,000 client transactions in the first half of 2020.
Our turnover in structured products traded on our platform increased to CHF 15.4 billion, which is up 3%. Furthermore, we significantly expanded our issuer network with new partnership agreements with Rand Merchant Bank, Basler Kantonalbank, and PostFinance. Today, we announced that Barclays will join as the first third-party issuer on our digital marketplace. We also enhanced our technology platform and fund derivative offerings through our collaborations with Google Cloud and BlackRock. Furthermore, as envisaged and communicated two years ago, SHIP is now being up and running with seven hedging counterparties in addition to Leonteq connected. The SHIP milestone is a major milestone in our company's development, and I'm pleased that we delivered it on plan. Last but not least, we have further invested in our digital marketplace LynQs, which offers new features and modules, and is now also available to our clients as a mobile app.
While the bottom line result is disappointing, and we shouldn't even start debating about that fact, the first half year of 2020 proves that Leonteq can weather the storm in real periods of market stress. I'm not entirely sure that everyone understands to what extent March and April were, when it came to the underlying asset classes, underlying structured products, a real stress test. We were all, among the management team, up and running during the financial crisis 2008 and 2009. Compared to that, the events we saw in March and April were by a magnitude larger when it came to speediness of events happening, and also speediness of liquidity in what previously were liquid markets disappearing. Clearly, central bank actions and government interventions helped a great deal, but at the same time created new unexpected political risks, which affected negatively our results. We'll show that shortly.
If we now go on to page five, please. What clearly became evident at the beginning of the onset of the events was that the market turbulences were not only affecting Leonteq's position as a market participant and also providing hedges, but clearly also as Leonteq's position when it came to service our clients. We very consciously, from the very beginning, said, "The client franchise is the gold of this firm, and we will do whatever it takes to be here for our clients, providing liquidity whenever needed." I'm very happy to say that, not only did we do this, but we feel strongly the clients appreciate that. On the back of it, I feel strongly that we have a better firm than half a year ago. Now, going through the slides.
Throughout the period of market stress, Leonteq demonstrated its ability to navigate unprecedented market environments, underscoring the strength of our client business, our solid capital position, the robust infrastructure, and our effective business continuity management. Leonteq's technology platform was fully operational throughout that period, allowing us to deliver high-quality service to our clients without any material interruptions. Our technology platform experienced significant traffic due to the market volatility and processed more than 95,000 secondary market trades and more than 55,000 lifecycle events. I'd like to note here that it is an exceptional achievement to transfer our platform within a few days to accommodate full work from home for our employees and continue to support our full business needs. All home office capabilities across the company were established in preparation for the lockdown, including high-demanding trading and IT development setups.
Our business remained fully operational throughout the period, while more than 95% of our staff worked remotely from home, including traders who are supposed to manage market risks and also key IT functions. We're also pleased to see that the day-to-day business was not affected. That's clearly visible in the net fee commission line. Teams continue to hold regular meetings through Webex, and staff remained engaged and attended virtual group town hall meetings. We also continued to provide full client service at all times, as I've just mentioned, for which we have received excellent feedback from our clients and partners. All of these examples are clear testimony of the solidity of our infrastructure, which underpins our technology platform, as well as the dedication and professionalism of the entire Leonteq team. In this context, please note that Leonteq is not just serving clients in Switzerland but throughout the globe.
Our service on a given day starts early in the morning with servicing Japanese clients and ends late in the evening with clients doing transactions on U.S. underlyings, for example. We really maintained not just an active and functioning platform, but we maintained it throughout the 24-hour period necessary to serve clients on a global basis. In this context, I would like to thank all of our partners and clients for the trust they showed in Leonteq, and also thank all our staff for the exceptional and good work they delivered in this difficult period. I've been telling our internal staff from the beginning of this crisis, and I maintain this view, that I feel very confident that Leonteq will emerge post-COVID in a position of strength and ready to take on the new opportunities the new environment brings.
The limited visibility we have today as a management team, it's obviously only a few weeks since things seem to be calming down a little bit, is that this view is clearly proven. I see, as the CEO of Leonteq, more opportunities ahead of us than I've possibly seen ever in Leonteq's 13-year history. All of this will come down to good execution on the part of us. All of this is also conditional on what the next effects of potential COVID-19-related or other related crises will bring. We are, as Leonteq, prepared for any scenario which might come, but we see a lot of sunshine behind the clouds that were above all of us in the months of March and April.
With this, I would like to invite our Deputy CEO and CFO, Marco Amato, to present the half-year results of Leonteq's, focusing a bit more on the numeric side of things.
Thank you, Lukas. Good morning, and warm welcome to all participants from my side. I'd like to talk about our financial performance, first looking at our P&L. We'll then elaborate on the main drivers which impacted our business, especially during the months of March and April, and we'll conclude talking about costs, balance sheet, as well as our capital bases. If we start on page seven. On 9th of April 2020, in light of the COVID-19 situation, we provided you with a business update and announced that we expect our profit to come in around break-even level. Today, we report that in line with this guidance, our group net profit was CHF 5.5 million compared to CHF 32.5 million in the prior year period.
We also stated that we recorded a significant increase in fee income while being negatively affected on the trading income side by hedging-related losses driven by the oil price shock and the unexpected cancellation of dividend payments, as well as an overall increase in hedging-related costs. Today, we provide you further transparency about these drivers of the first half-year result. Our net fee income increased by 76% to CHF 213 million in the first half of 2020. This was driven by a 3% growth in turnover to CHF 15.4 billion and a significant increase in margins to 129 basis points compared to 71 basis points in the prior year period. Our net trading results comprises contribution from hedging activities, which amounted to CHF 99 million negative, and a treasury carry, which was CHF eight million negative. Let's look into the trading results in more detail on the next page, eight.
On page eight, we have illustrated for full transparency the development of our weekly economic revenues for the first six months of the year. As you can see, Leonteq achieved a strong start to the 2020 financial year, with high levels of client activity and a positive trading result on the back of increased volatility towards the end of February. In March and April, we had three major items which negatively affected our results. The first oil price shock in the beginning of March alone had a CHF 20 million negative impact on our trading results. Towards the end of March and beginning of April, we saw a widespread and unexpected cancellation of previously announced dividend payments.
As Leonteq holds a significant amount of equities for hedging purposes, these missing cash flows, as well as the resulting changes in the implied dividend yields observed in the capital markets, had a negative impact of approximately CHF 38 million. Then, throughout those turbulent weeks, Leonteq recorded a significant increase in hedging related costs as market risk exposures changed rapidly in an increasingly illiquid hedging market. These additional hedging costs were only partially offset by our structural long volatility position. In May and June, the capital markets recovered significantly, with normalizing volatility levels. What the chart in front of you shows is that our business also normalized in terms of weekly revenue production towards the end of the first half of 2020. Let me now discuss our cost line on page nine.
Total operating expenses were up 5% to CHF 98.7 million compared to the first half year of 2019. This was primarily driven by investments in hiring and key initiatives in the first half of 2020. Given the strong strategic progress we saw in the first half of 2020, and in particular in the second quarter of 2020, management consciously decided to selectively invest in new growth areas. Concretely, the onboarding of new white label partners will require new resources. We have increased our investments for the implementation of additional features and modules of our digital marketplace LynQs. We are continuing with our efforts to increase our regional footprint in Europe and the Middle East through the opening of new offices in Milan and Dubai, which are planned to be opened during the second half of 2020.
It is important to note that we are monitoring the situation constantly with the clear aim to protect our profitability going forward. For example, in case there will be a substantial drop in client demand in the second half of 2020, we have the ability to implement meaningful cost measures if necessary. Currently, we do not envisage such measures and plan to further invest. Therefore, the total operating expenses are expected to amount to approximately CHF 200 million for the full year 2020. As announced with our full year 2019 results, we considered a number of nearshoring options, and I'm moving now to the second part of the slide. We did this in the context of our continued need for investments, which we want to balance with our profitability targets. After an extensive evaluation process, Leonteq has selected Lisbon, Portugal as the location of choice due to several factors.
These included the talent and sourcing opportunities, the political stability of Portugal, as well as time zone and cost considerations. Phase 1 of the nearshoring operations will consist of establishing a serviced office setup. This is expected to be completed by the end of 2020. A small number of external IT development specialists, as well as other personnel in shared service functions, will be employed during this process. In Phase 2, starting in the first quarter of 2021, we plan to establish an own office with up to 100 designated roles along the entire value chain. It is planned that Phase 2 will be fully operational by the end of 2022. Let's now turn to page 10. On page 10, you will see our regional results. We reported double-digit growth in all our regional operations.
In our home market of Switzerland, the net fee income increased by 56% to CHF 82 million in the first half of 2020. Our business in Europe grew by 105%, meaning doubling the net fee income compared to the first half year 2019 to CHF 113.2 million. The Asia region saw a 34% increase in net fee income year-on-year to CHF 17.8 million. As communicated with our full year 2019 results, we will open new offices in Milan and Dubai in response to increased client demand in these regions. We expect to receive the necessary regulatory approval shortly and to open respective offices during the second half of 2020. Moving on to page 11. The good fee income performance in each of our regions this first half year of 2020 was primarily driven by our investment solutions business line.
Here we met the strong client demand and provided full service at all times under the unprecedented market conditions. On page 11, you can see the change in our turnover, fee income margin in the middle of the page, and the net fee income year-over-year. Leonteq's turnover increased to CHF 15.4 billion in the first half of 2020 compared to CHF 15 billion in the prior year period, which was mainly driven by a higher amount of secondary market transactions, particularly during the COVID-19 situation in March and April. Our fee income margin increased exceptionally to 129 basis points compared to 71 basis points in the first half of 2019 on the back of the market turmoil and increased market volatility.
In the first half of 2020, the investment solutions net fee income increased by 86% to CHF 198.7 million compared to CHF 107 million in the first half of 2019. Let's take a look now also at our insurance and wealth planning business line on page 12. We continue to grow in the area of unit-linked insurance policies despite the headwinds created by the significant reduction in long-term interest rates since 2018. As of end of June 2020, we have almost 50,000 insurance policies outstanding on our platform. This is a 55% increase since the end of 2019. On the fee income side, the IWPS units recorded an increase of 3% to CHF 14.3 million in the first half of 2020 compared to the first half of 2019 by 3%, also reflecting the challenging interest rate environment.
I would like to turn now to discuss Leonteq's balance sheet on the next page. On page 13, you will see the composition of our balance sheet. Our balance sheet is driven by two factors. First, we issue Leonteq own structured products, which are recognized on the liability side. To hedge these liabilities, we invest approximately half of the proceeds from own issuance into a conservative investment portfolio and the other half into hedging derivatives positions such as equities or indices. Likewise, as a result of the issuance partner business, we mostly hedge for our partners their structured product exposure by purchasing either the underlying securities of the products or options. At the end of June 2020, volatility levels were higher than they have been in years.
Due to this, our positive and negative replacement values of derivatives instruments increased by 109% to CHF 6.2 billion and by 75% to CHF 5.1 billion respectively. At the same time, cash collateral paid and settlement receivables, as well as collateral received and settlement liabilities, grew significantly. Our own issued products remained stable around CHF 4.1 billion, whilst our high-grade investment portfolio increased slightly from CHF 2.4 billion in December 2019 to CHF 2.5 billion at the end of June 2020. These factors combined resulted in total assets on our balance sheet to increase by 48% to CHF 13.4 billion. Similarly, our total liabilities increased by 52% to CHF 12.8 billion. Let's now move to page 14 to look at our shareholders' equity in more detail. Over the past years, Leonteq has built up a strong shareholders' equity.
Looking at the top chart, you can see that shareholders' equity decreased slightly from CHF 662 million to CHF 659 million. This compares to a capital base of approximately CHF 400 million from two years ago. Since the beginning of the year, Leonteq is operating under a new regulatory framework for securities firm. The new capital requirement of CHF 20 million was significantly exceeded as of the end of June 2020. Looking at the bottom chart, you see that we report a CHF 26 million decrease in our deferred fee income to CHF 81 million as of the end of June 2020. CHF 5 million was due to the retrospective application of changes in the revenue recognition as of the 1st of January 2020.
This change was driven by a review that we did at the beginning of the year on the back of an increasingly competitive environment in recent years.
Higher competition we saw in our investment solutions business line was also reflected with our fee income margin declining in the area of 100 to 120 basis points in 2016, and earlier to the area of 70 to 80 basis points last year. With that, I conclude my remarks on the financial performance and would hand over back to you, Lukas.
Thank you, Marco. I will now continue on with an update on Leonteq's key initiatives on which we have made good progress in the first half of 2020. For the last two years, some of you have asked us at our half-year and full-year press conferences whether and when Leonteq is going to announce new platform partners. You will remember that we have consistently told you, yes, we will announce new partners, but we asked you at the same time for some patience, as we were less interested in the announcement themselves, but much more in adding partners to the platform, which would contribute to our vision of becoming the leading marketplace for structured investment products. In this context, we are pleased to be able to report on the following four new partners, which I would like to discuss in a bit more detail on page 16.
First, we entered into a broad cooperation agreement with Basler Kantonalbank. As part of this cooperation, Basler Kantonalbank is issuing structured products and Leonteq providing services along the entire value chain. We both distribute these products to our respective clients. Leonteq also launched a collaboration with Rand Merchant Bank, a division of FirstRand Bank, for the manufacturing and distribution of structured investment products, broadening our offer to clients into a new region. Furthermore, we also won a tender for the issuance and distribution of investment solutions by PostFinance, and have signed an agreement to cooperate with the company in the field of structured investment products. We are very pleased to expand our cooperation with PostFinance that began in 2017 as a pilot project, and we will be providing all services along the entire value chain.
Today we have announced that we have built a digital connectivity between our digital marketplace and the Barclays electronic platform, making Barclays the first third-party issuer to join our multi-issuer platform on an automated setup and basis. Furthermore, moving on to page 17, we have also entered into new partnerships and collaborations with two highly reputed companies. The background to this is that we need to ask ourselves the question, how we are positioning for further growth, which we expect on the back of various investments we are making in new key offerings on our side, such as the LynQs platform, the AMC Gateway, and the SHIP platform. We need to think ahead of this assumed future growth. In this context, we have started a collaboration with Google Cloud to support our platform scalability by extending our infrastructure from our two on-site data centers into the cloud.
Important to note here is that the cloud is an additional backup facility we are having. We are obviously still maintaining fully our two on-site data centers. By leveraging Google Cloud, we are able to benefit from additional flexibility and performance at scale for our core bridge computation processes. This will also be beneficial, and that's very important to understand, for our platform partners in the future with regards to their reliance on Leonteq's technology platforms through enhanced business continuity management, faster platform rollouts, and improves regulatory and risk management. Just to give you a very specific example, one of the leading banks in Africa, such as, FirstRand Bank, is obviously asking itself the question, what if there is a major downside on our two on-site data centers with regard to their service offering?
By essentially having the Google Cloud next to our on-site data centers, we can credibly demonstrate to this and other partners that they are not simply relying on hardware reliance and technology of Leonteq, but really also are being supported by what is probably the leading technology provider when it comes to data centers, et cetera. That's really why we have been working very extensively the last 18 months as a management team to onboard with regard to this cooperation. Our strategic partnership with BlackRock, which we announced recently, is expected to further diversify our revenue base. As part of this partnership, Leonteq develops and markets structured products with BlackRock's Luxembourg mutual fund range and iShares ETFs as an underlying asset class.
We are very pleased to be working closely with these two leaders in their respective industries, and have already benefited from the extensive exchange we had with these parties in the period ahead of this announcement. Of course, such partnerships take time to develop, and I'm definitely convinced that these additional services and partnerships we are providing are not only helping our end clients, but also our white label partners. Now, if we move on to page 18, please, I'd like to briefly discuss our hedging activities and the progress we made on our balance sheet light piece. Clearly, as we have seen now in this first half year results, Leonteq hedging outstanding structured product itself comes always at the risk of unexpected market developments. Simply put, the less we are hedging as Leonteq, probably the more stable our bottom line will be.
That's really the background to SHIP, which we communicated to you as a project two years ago. In parallel, we have obviously used the last 24 months to develop some further SHIP-alike approaches, which all have the same underlying rationale. We'd like to reduce the reliance on Leonteq's own balance sheet when it comes to hedging transactions of structured products issued. Back quickly to SHIP. As said before, it's now fully operational, and it is an important step in transforming Leonteq's position from a balance sheet business to a platform business. SHIP, as of today, has seven leading investment banks connected to it, so the technology connection is fully up and running, tested, and has been verified. A total of eight counterparties, including Leonteq, are actively contributing quotes to the platform. Out of these eight, six, including Leonteq, are currently able to execute trades.
With the other two, we are in literally the last thrust of getting their execution capability fully up and running. Very shortly, we'll have the eight up and running. We not only connected the hedging parties, but also the issuers. We have today, from the white label issuer side, four issuers up and running. Leonteq, of course, but also Raiffeisen, EFG, and Standard Chartered. We are talking to all our other white label partners about connecting them as well to the SHIP platform. As mentioned, in parallel, we have built out other offerings with the same purpose and have today 15 third-party issuers connected. Those we service on a customized basis, which means we have a lot of manual intervention, and that's obviously not ideal with regard to our end goal of having a fully automated platform available.
I'm very pleased to be able to report our cooperation with Barclays. The key difference to the past here is that the client using our platform can directly buy a Barclays product, whereby the entire execution, settlement, and processing happens on an electronic basis. It's obviously a massive improvement to a manual setup. As you can imagine, we'll also be working on automating some other of the third-party issuers. On top of that, we extended our capabilities for back-to-back hedging transactions of complex structures with additional hedging counterparties. The combination of SHIP, which is only up and running now fully as of now, and our third-party issuers and B2B hedges, this is the back-to-back hedging approach we are taking, has enabled us to increase our balance sheet light business to some extent.
The 6% of total turnover, which that represented in the first half 2020, is still a low number, it is not surprisingly at that level because, A, SHIP wasn't yet fully up and running, and B, a lot of the developments which will further increase that number were obviously only delivered during the last few months. I am pleased to say that 6% is a massive improvement to the 1% we had in the comparing period 2019, and it clearly shows you the direction we are taking as a firm. It's obviously also a number we will report going forward, so you will be able to monitor the progress management is making yourself as we report on a half-year basis that number also going forward. Moving on to page 19, I want to share with you how Leonteq's marketplace for structured investment solution is taking further shape.
We are not at all at the end of this taking shape process. You can and should assume that we will have more parties joining the platform. Simply put, on the right-hand side, what you see is our clients. You know we are B2B business, so our clients are typically regulated entities, private banks, retail banks, asset managers, et cetera. On the left-hand side, we have the entire spectrum of issuers of structured products available. A good number of them we are enabling through our white label setup, and a good number of them now also in an electronic format, the first time with Barclays, we are offering to our clients through sell side service, whereby they can buy through our platform, the third-party issuers.
We are augmenting that reality on the top part of the chart with SHIP, which ensures for end clients on the right-hand side that the best execution is not only happening at the level of the issuance of the zero bond, but also at the level of the derivative, which we source through the SHIP market, and which brings the ancillary benefit to Leonteq that whenever a derivative is not purchased from Leonteq is obviously not providing the hedge, which essentially reduces the reliance on Leonteq's balance sheet. As this marketplace is becoming more and more relevant, we see a good potential of adding content and technology enhancers. BlackRock and Google are two names. We have some ideas of additional content and technology enhancers we could add.
We'll obviously, nevertheless, keep that number limited because, again, here it's not about the names or the number of announcements, but any of these additions need to make a real difference to the platform we are building. With that, I'd like to come to the summary part of our presentation before we will gladly take on your questions. Page 21. Leonteq's half year 2020 results are evidence that we can weather the storm in real periods of market stress and safeguard our profitability. Marco Amato has shown you on a weekly basis our economic revenues. I can't think of a way of being able to be more transparent to you about our developments. You clearly see in the numbers that Leonteq did not manage for political risks, which came as a result of these events we saw in March.
I'm not sure that it's a very good approach for the firm into the future to hedge for political risks. We are able to do that, and we have demonstrated that subsequently to the first oil price shock. You will remember that there were seven subsequent oil price shocks. I would define an oil price shock as a 30% movement in the oil price overnight. There was obviously a very big oil price shock when oil went negative. Without exception, all subsequent seven oil price shocks did not bring us a single dollar of loss. That shows you that Leonteq is absolutely capable of hedging political risk. In this case, we did it. The drawback to that strategy is obviously it comes at a cost. You cannot buy insurance for free.
As we will come to the Q&A, I assume some of you will be asking for details of the trading breakdown and the trading losses. Increased hedging activities means essentially a conscious decision by management that, A, we do hedge, and we will continue hedge no matter what the market brings, because that's really the approach to take if you want to safeguard the company for worst possible outcomes. It also means that you are paying for a lot of insurance premium. Some of them you are, with hindsight benefit, happy to have had. Clearly, the oil price developments showed that the strategy worked well with regard to that. In some other cases, the approach led to essentially us paying insurance premium without any tangible results. I think we did the right thing in view of the developments we saw in March.
At the same time, it's a very expensive strategy, and one has to balance a bit the downside risk of not protecting for every potential outcome versus the benefits of essentially keeping some tail risks open. As we have seen in March, the tail risks when they come are in every regard unpleasant in terms of their effect on our P&L, but they are not of such a magnitude that it would fundamentally question the solidity of the firm. Of course, we have some inherent hedges with regards to our positioning. One is the long structural volatility position we run, and the other one is that we know based on experience that typically clients would transact more when markets become very volatile, which was also evidenced here, and which then obviously has an effect on our fee income.
The key takeaway for me, nevertheless, aside of the fact that obviously first half is a disappointing outcome on the net profit side, is that Leonteq has invested in its client franchise. I believe we have a better firm now than we had six months ago when it comes to client trust and client confidence in us. We have really stress-tested the robustness of our technology platform. We have never had better strategic progress when it came to new partners. I am very pleased to see that the evolvement of our vision into a marketplace is taking shape, and it is not just something I am telling you because I believe it is also something that independent, highly rated, in many cases too large to fail institutions, have validated by entering into these strategic cooperations with us. Finally, understanding that some of these new cooperations will bring new costs.
We obviously have thought long and hard as a management team how we can contain some further cost developments, and therefore the establishment of a nearshoring office in Lisbon will be very critical. Now, what can we expect moving forward? You will not be surprised to hear from me that there is considerable uncertainty about the duration and global economic impact of COVID-19 pandemic. We are unable to predict what the next developments are. We obviously know that there are also some geopolitical risks standing out there, be it U.S., China, in terms of trade tensions and talks, be it U.S. elections in terms of what policy and decisions out of that election process might come. What we can objectively observe today is that the interest rate environments now in, really, all main currencies is at a historic low. In many instances, interest rates are at negative levels.
We know, and we can prove that based on hard facts, that in this environment, structured investment products offer attractive yield alternatives. Given the strategic momentum, Leonteq will continue to invest in key initiatives. Our total operating expenses are expected to reach approximately CHF 200 million for the full year 2020. We will continue executing on our strategy to transform into a platform business. We obviously see ourselves well-positioned for further growth. Otherwise, we wouldn't have made the conscious decision to report to you today that we will continue to invest into future growth. It would be very simple for management. We would know exactly what to do to tell you that we have decided on a certain cost block reduction. We know in our setup exactly how to do that. The biggest cost block we have comes from our people.
We could obviously have decided a cost reduction on the back of a diminution of our staff force. We are consciously not doing that because we think now is the time to invest into the opportunities we see. We don't think now is the time to retreat on the cost side. We understand and appreciate that this is a strategy which needs to be balanced against the revenue side. That's why Marco stressed that in case the revenue side would not materialize, we would know exactly what to do, and we would obviously also not hesitate to act, should we need to do so. With that, I would like to thank you very much for your attention.
We're at the end of the presentation, and I'm now happy to start the Q&A session, and we'll take the first question.
The first question is from Máté Nemes of UBS. Please go ahead.
Good morning. Can you hear me?
Yes, Máté. Good morning to you.
Good morning. Thank you for the presentation and the details of the various revenue lines. I have a couple of questions on both fee income and also the trading income component. Firstly, on fee income. Clearly, the increase in the fee margin drove perhaps the significant increase in net fee income as well. While it seems to me that in investment solutions, the product turnover remained broadly flat. I'm wondering if you could give us some color on your expectation regards to the margins. Should we expect basically a reversion back to more normal levels, as perhaps Q1, Q2 was an exceptional environment and very high volatility? You would expect still margins to remain structurally higher as the VIX and volatility levels remain also quite elevated. Secondly, on trading income. Appreciate the color on the components and what has driven it.
I'm just wondering if you're planning or conducting any review of your own issuance hedging strategy, in order actually to prevent something like this happening again? This is a special and inherent risk in the business, and as you mentioned, some risks are perhaps inevitable and are not worth fully hedging. These are the first two questions. A third question on SHIP. Can you give us any color on where the 6% total turnover on balance sheet live turnover could go in the next year, two years, three years? Maybe a quick clarification just to make sure we're on the same page. When you say back-to-back hedges on SHIP, this essentially means you have no hedging exposure there. Is that correct? Thank you.
Thank you very much, Máté. I will take the last two questions, and Marco will address the fee income question. Look, what is very important to understand on the trading income. The number as it says is obviously a large negative. The first comment I'd like to make is this is not a trading loss based on any proprietary views that Leonteq took. This is really hedging-related losses. The two political risks which hit us. Oil price shock, the magnitude of it, I guess, was a bit driven by two very large oil-dominating countries having some discussions between themselves. I would say that was a political risk. We didn't prepare for that. We didn't see it coming this way. We suffered, and the number is disclosed. The second that event happened, we said, okay, this can obviously continue to happen.
We didn't take any view whether oil was going back to 80 from 40 or whether it was going to zero or even negative. It was obvious to us that it could come again, and we hedged for that. We had seven events like this, and none of that cost any money. The second, I would say, that's probably something which happens from time to time. In that magnitude on oil, we saw it 40 years ago, we saw it, another seven events after the first event, I'm certainly not in a position to tell you that it could not happen again. I would say if it had just been that one-off effect, our number would not be pleasant per se, obviously it would already be quite different to what we are reporting today. Came the dividend cancellation.
That was very unexpected. Just to illustrate to what extent it was unexpected, we had leading banks take HSBC, who were trading ex-dividend, then the day before the payment of the quarterly dividends, they don't pay because the U.K. regulator told them they should not pay. That is difficult for Leonteq to hedge because if you say you guys could just have bought some dividend future, I would tell you no, there is no market for dividend futures. Trading on dividends which are trading between the ex-dividend day, i.e. shares having reflected in terms of market adjustment and the effective settlement of a dividend. You could obviously also hedge for that scenario, the hedge there is you need to go short the underlying share, and that's then really not a hedge. I would call that more as a market view.
We are not, by setup of our business approach, taking such market views. In this particular case, it's difficult for me to tell you how we could change our hedging approach. Effectively the change would really be taking market views, which we are not willing to take as a firm. That then explains your CHF 58 million of the difference, and you are still left with the remaining number. There, I don't think we can say today that we are changing a hedging view because management made, together with our trading team, a very conscious decision which resulted in that sort of outcome which you see in the number. The decision was twofold. First, we said we are here for our clients more than ever, and we have to be here.
What's the point of selling structured products to clients when markets are benign and everything looks good and not being here for clients when they really need you? That meant in some instances, we were providing liquidity to clients where we knew that the ultimate underlying to sell off was highly volatile and would probably be less liquid than the liquidity we provided. We safeguarded a little bit by having a bit of a higher commission income, i.e. having a bigger bid-ask spread. Of course, if you unwind the underlying position at a loss, you would see the loss in the trading side, whereas your fee income would still be showing the fee you made by the unwind. The second conscious decision we made was we said we are going to safeguard the company for the worst possible outcome.
What I can maybe just say as an illustration to what that means. The trading income was by a magnitude larger in terms of negative impact when the markets gapped up and went back to higher levels than when the markets came down. Essentially, throughout the period mid-March to end of April, we positioned the books in a way that if there would have been a second wave, say, we would have known that we would have everything under control. That comes at a hedging cost. Could we have taken another approach? Of course, we could have. We could have said we just hedge for the minimum, and we think there will not be any market developments on the negative side. Essentially, sometimes you need to take a view.
Are you rather coming out at the end of a half year with a number which will be, say, plus minus break even? Or are you actually taking a view and not necessarily building up extra hedges for all possible worst-case scenarios? A good example is the extra hedges we took on the oil side. We didn't have clients unwinding the position. We went into the subsequent seven oil price related shocks with the same client positions as at the beginning, but we didn't lose money. That means we bought additional safeguarding protection mechanisms, which obviously cost money. Whereas the number is big, and whereas it seems that maybe it necessitates a review of our hedging approaches, it's really not that, as far as I'm concerned. Half of it is explained by political risk for which we didn't hedge.
We can hedge for it, for part of it. The other half, I still don't know quite how to do it. The other half is really a reflection of both above average, I would say, client service, i.e., providing liquidity when maybe you don't have the liquidity yourself in the market, and also of very prudent risk management approaches decided by management. It comes at a cost. Of course, when the markets then recover, which by the way, I'm very happy about because it also means a lot of our clients are again sitting on decently performing products. It obviously, in such an outcome, means that you need to do a lot of explanation, which we are happy to do.
If the outcome would have been different, i.e., another wave, then we would have had a situation where probably our relative trading performance would have looked quite solid in the relative context of what maybe the market and competition would have done. In summary, to answer that part of your question, Matt, Leonteq wants to be a platform business. We want to be a marketplace, and we will continue investing in that vision. We do not want to continue to use our balance sheet to the extent we are using it now in terms of percentage flow enabled by our balance sheet. We definitely never want to take views, because we know with our backgrounds that we can be right if we are very good market view takers, maybe 51% out of 100, and that's just not a good enough ratio for us.
It's better not to take a view, protect the firm under all scenarios, and accept that in a market like this, which I think is very unique and historic in terms of the last 100 years, we do not produce the result that shareholders correctly expect, and it is what it is. With regard to the marketplace and SHIP, look, the 6% number will definitely go to a double-digit number. It would now be a little bit premature to tell you what that number is or where we are seeing it, because SHIP is now finally up and running. We'd obviously now like to see a few weeks and months of development before maybe we eventually start guiding on that percentage. On the back-to-back question, absolutely. SHIP obviously takes the risk and balance sheet of Leonteq out of the picture.
SHIP has the advantage that it's automated and electronic, but it has the disadvantage that simply due to time, we were not able to automate every single payoff and every single structure there is in terms of client products we are selling. The back-to-back approach allows us on a manualized, customized basis to essentially replicate what SHIP does, but in a non-automated way. The outcome is the same. With that, I'll pass on to Marco for the fee income question.
Thanks, Máté, for the question. As you know, there are multiple factors impacting the margins. Among others, we also mentioned volatility, the market turmoils, the funding levels, the amount of large tickets that we have, and as well the secondary market transactions that we execute, especially in the first half year 2020. We explicitly also mentioned that the increase is exceptional. Yes, definitely you can expect margins, or we expect margins to come down again. We always guided the margins to be roughly 60 to 70 basis points for partner products and slightly higher for Leonteq products. I would expect them to come down. Currently, we still see volatility levels higher than what they have been in 2019. Assuming those levels, I would expect margins not to drop immediately down to the 2019 levels, but still be slightly higher than that.
Nevertheless, please don't assume that the levels of margins will stay as they were in the first half year 2020.
Okay, very clear. Thank you very much for the detailed answers.
The next question is from Andreas Brun of Credit Suisse. Please go ahead.
Hi. As Máté said, turnover remained flat in H1. Can you give us your view, your outlook with regard to further growth going forward? Maybe you can even give a split, how much you expect from the new clients, their contribution, or from the underlying business, even if it's only in a qualitative way. Thank you.
Thank you very much, Andreas, and good morning to you. Look, the turnover remains flat. To answer the question, it suffices for you to look at your own trading patterns during the crisis. When markets are all over the place like they were during a few weeks of March and maybe April onwards, naturally human beings start being a little bit less active with regards to new engagements. What typically people do is they very proactively manage existing engagements, and that's really what you see also happening on our platform. The CHF 15.4 billion turnover number, whilst it looks flattish year-on-year, I think is a good number, because it really shows that there was a lot of activity on existing positions. We didn't see that much of new engagements by clients during these two months in particular.
Going forward, I would expect, again, clients to be a little bit more active. You obviously also wouldn't have in such markets trigger events like autocallables when products would automatically be repaid. That now looks also a little bit more promising with some markets being at all-time highs. I would expect turnover to grow from that number. You are so good in forecast that it would be wrong for me to do the work for you.
Thank you.
The next question is from Reto Brühwiler of ENPA. Please go ahead.
Hi. I've got a question on deferred revenues. Can you update on the deferred revenue line? I think you have given some indication end of last year in terms of equity plus deferred revenue, where do we stand here mid-year? The second question is on the cost side. In investment solutions, you had about CHF 5 million higher cost in H1 this year than in H1 last year on the personal expenses. Can you confirm that the personal expenses is largely related to or a big part is related to fee income in terms of sales, getting the clients to be active on your platform rather than trading book-related stuff where some revenue contributors or volume contributors cannot really influence that line?
Just to get a feel for how you occur for income for bonuses in H1 and what to expect maybe on that line for H2.
Well, look, on the deferred income slide, there is obviously slide 14, which gives you the details breakdown. For us, the deferred income is obviously money we have generated but not yet released through our accounts. We are therefore, for the purpose of our capital solidity, showing growth numbers. The CHF 740 million is the number management is focusing on. We have guided you in February that, as that number will further increase to a more round figure. We would gradually then also anticipate to change our dividend policy from a more conservative policy to a more progressive. Other than that, maybe you precise your question. I'm not sure what I should answer because I believe the answer to your question as asked is on that slide.
No, fine. I missed that part of the presentation. I think I was offline for a short period of time. Yeah, no, that's fine. I can do some math out of that.
Okay. Thank you. On the cost side, I let Marco maybe answer specifically, but I think what's very important for you to understand the production on the fee commission side with clients' activity and obviously our sales desk contributing to that number, it was in every regard outstanding compared to the past. It would be wrong for us as a firm thinking about the mid- and long-term future to not also wanting to compensate our staff, including obviously the sales for the extra efforts they produced during this period. We obviously have also more personnel on the payroll, so that's also having some effect. Again, I would say probably the number reflects a conscious decision by management and obviously also the board that we do not wish the COVID-19 crisis to fundamentally impact the firm with regard to our future potential.
A lot of the future potential lies with our staff, which means we'd like to be able to still pay them decently. It goes without saying that, of course, first half-year results will also have an absolute effect on everyone's compensation. It's not the message that only the shareholders has to take a negative impact. It would have been in every regard wrong, we believe, to essentially say, well, the number is such that we do not afford anyone getting a bonus. Marco?
I think, Reto, you're also right. It obviously relates to the strong performance of the fee income. Obviously, for the first half year, we do always estimate also on the variable compensation. These are not final numbers. As always, we try to come up with the best guess estimate. That has obviously to do with the increased number of personnel as well as the strong fee income performance in H1.
The next question is from Daniel Regli of Octavian. Please go ahead.
Good morning, and thank you for taking my questions. I have, let's say, four clusters of questions or four subjects I would like to ask a couple of questions on. I would propose to ask them subject by subject. I'll first ask a couple of questions on the fee income, and I would then ask the other questions later. First, can you give me some kind of a split between primary market fee income versus secondary market fee income, historically and for H1, and maybe also similarly for the turnover number, and what drives the turnover number? Or how you account for turnover, particularly for the secondary business. Then also maybe on the turnover, can you give us maybe the split or the year-on-year increases by quarter in the turnover? I would expect that the turnover has been much stronger in Q1 and then declined in Q2.
Yeah, this would be the question. Third, maybe also the split between primary and secondary fee market is potentially also driving the decline in deferred income, I assume. Can you confirm this? Does this decline in deferred income, this CHF 20.9 million you show on page 14, is driven by having more secondary market business and less primary markets business compared to the last period.
Okay. Thanks for the questions. On the first one, unfortunately, also the split between primary and secondary, we highlight to you that as part of the COVID crisis, we saw a significant number of secondary market transactions happening. We don't provide details on the amount, and split between primary and secondary and hope you appreciate that. Same is unfortunately true also for the turnover. We have guided you with the business update on the 9th of April that turnover has significantly increased. You can assume, looking at turnover being more or less stable, up 3% year-over-year, that it has been higher in the first quarter than in the second quarter, given that we have given this update on the 9th of April.
With regards to the deferred fee income, it's not correct because we basically the revenue recognition treatment that we do for primary and secondary transactions is the same. It doesn't matter if we issue a primary or secondary transaction on deferred fee income. Nevertheless, I refer you to also to the note eight of our half year report, where we also state that we did some revenue recognition model adjustments in terms of periods that, due to also increased competition that we see in the market. We started deferring. In the past, we deferred over 12 months period our fee income. Now we only defer it over nine months. That's an adjustment we do on a regular basis. We started the review in beginning of the year. Obviously, deferring over nine months period means also you get less deferral.
We still want to highlight that with the CHF 80 million deferred fee income, we have a substantial amount of deferred fee income, which is also much higher than what we had in the previous years.
I assume that the change in revenue recognition is what you show as CHF 5.1 million, but the CHF 20.9 million or the CHF 21 million, I assume, is because of a different mix between primary and secondary market. I assume that in the primary markets business, you defer the income and on the secondary markets not. Do you defer both fee income?
No, we defer also for secondary markets transactions. Basically, what you see as CHF 5.1 is the effect from previous years, so the retrospective effect that we had on our numbers. The CHF 20 million, part of it is obviously the prospective effect of changing the revenue recognition going forward starting 1st of January.
Okay. Maybe the second couple of questions is on the cost. I saw you had a release in the provision line of about CHF 4 million. Can you maybe explain to me what this was and why did this happen now? Secondly, is this included in your full year guidance already or can I deduct this from the full year guidance? Secondly, the Portugal office. Is this really an add-on, so you hire more people in Portugal, or is this also partly a replacement of people we have in Switzerland or operations we have in Switzerland or elsewhere?
Okay. On the release of the provision, also there you have the full details in note 12 of the half year report. It's related to basically a decision regarding VAT. That was a decision taken in December, which was then fully effective in March, so the release happened in March. You can assume that the CHF 200 million that we guide as cost base includes total cost, including provisions. It's CHF 200 million, including the CHF 5.1 million release of the VAT provision.
Okay.
Then on Portugal, the idea is not to add further headcounts to Portugal. Definitely in the beginning, we'll have to have headcounts basically over there, which are not replacements of headcounts which are here in Switzerland. Going forward, the idea is to basically have, through the natural fluctuation, move more and more people from Zurich to Portugal in Lisbon. Basically, the idea is someone resigns here, we assess if there is any possibility to hire that headcount going forward in Lisbon. It's also very clearly communicated that we do not plan to let go anyone here in Zurich just to move that headcount over to Lisbon. We have natural fluctuation, and through that natural fluctuation, we plan to just move over headcounts from Zurich to Lisbon. Definitely, yes, we plan still to grow.
The overall head count, you can assume they will be flat or slightly increasing over time. That's part of the move also from Zurich to Lisbon.
Okay. Thanks a lot. Maybe quickly on a couple of strategic topics. The first is SHIP. Obviously, you have already elaborated a bit. You want to have this 6% going up to a double-digit number. Just try to ask you whether you can be a little bit more concrete. To me, to be honest, this 6% was a bit of a disappointment. I hoped this volume would increase more significantly on SHIP. Can you maybe elaborate a bit what were the key challenges, why this number is not yet higher, and what do you plan to do to grow this number more into the area where you target?
Thank you for that question. Unfortunately, I can't give you more guidance, because as I said, we want to see a little bit more now developments given that it's SHIP up and running. In this context, I'm a bit surprised about your comment that you are disappointed. In February, I told you it will be in summer that we are up and running. Actually, you should see that number at more or less zero or 1%, as in the first half 2019. Maybe you say at 3%, as in the second half 2019. Whatever the number is, six is not the number for the future, and we want it to be higher. There is really not a big point in now guiding you to a number before we don't see a bit more effective results ourselves.
Mm-hmm. Can you maybe elaborate on the key challenges, which is, let's say, standing in the way of getting this number higher? What needs to be done that this number increases going forward?
What needed to be done was for SHIP to be up and running, which is the case now. I feel confident that we'll reach double digits, but obviously double digits starts at 10 and ends at 99%. Give us a bit of time, please, to maybe then be able to guide you.
Okay. Sorry to come back to this topic, and I know you have already elaborated on the trading income quite a bit on Máté and other analysts' questions. When I looked at this chart of the weekly revenues, obviously in this week where you have the oil price shock indicated, the bar is more like CHF 30 million. Can you maybe explain what was the additional CHF 10 million lost in this week? If you just could be a bit more concrete on your strategy. From your explanations, I assume you have locked in the losses after we have seen these drops, whereas others in the market potentially have let the positions run more openly and then were able to benefit from the recovery in stock markets, and the oil price. Am I wrong in this assumption?
Can you maybe just explain to me a bit what, in your opinion, have you been doing differently than others, which obviously also they saw interruptions, but not in a similar extent as you have?
Okay. You're asking a lot of question in one. It's always difficult for a CEO of a firm to comment on anyone else's production or numbers, because I don't know those companies and their numbers at all. I would just refer you to two of the market leaders, being BNP and Société Générale. They had announcements on the first quarter and will soon have announcements on the second quarter. I would be surprised if the direction was materially different to ours. Some other competitors have a lot of other businesses mixed into that business line. It's difficult to conclude. What I can tell you when it comes to transparency, I've looked long and hard to anyone I could possibly think selling structured products. I've not found on a global basis anyone giving the sort of visibility and details we are.
I've actually not found a single financial institution giving weekly numbers. It is inappropriate for us to comment further on this, because then we are all of a sudden debating with people what an event on a given date might have been. The only answer I can give you to your question on the week which you referred to, which was the week starting March 9th, was that was both the culmination of COVID-19-related first shockwave hitting investors really hard, and then obviously the oil price shock on top. In such markets, you have dislocations all across the place, and you obviously have also some positive effects. The number is what it is, but it's really not appropriate for me to comment.
What I can tell you also is the numbers we show here with a CHF 20 million number and CHF 38 is not suggested per se to explain that one week development. It's just trying to indicate what was the biggest driver. On the second part of your question, I don't think I can agree to what you say because your question assumes that Leonteq takes market views when it does hedging transactions. I certainly cannot comment what other people might do. Not taking market views means the oil price shock by definition, you take the loss and it's there. There's really nothing you can do about it. The dividends, you take the loss and it's there. The one comment I made is we had in relative trading impact, higher impact due to the market going up than due to the markets going down.
It wasn't driven by the delta moves on the underlying stock price. It's not because markets went up, we lost equity on short positions. We lost money on short positions because we don't run such positions. We do a lot of different hedging transactions. Those hedging transactions, when they don't materialize, costs you a premium, so you buy an insurance premium and then it doesn't pay. It was really not the view anyone at Leonteq would have taken, and it's not something we'll do in the future.
Okay. Thank you.
I hope we can continue. We have another analyst also in the queue to pose his final questions. Is that okay if we continue?
Yeah, of course.
Okay. Go ahead.
Could I just maybe use the occasion, Daniel, just to say one thing. Leonteq runs this firm within tight risk management limits. Aside of the fact that management has no intention to take market views, our risk management limits do not let us do the sort of things you referred to where you said, okay, maybe you had a loss, but then you locked in the loss and kept the position open and made the loss back. That's just not the way we run this business. We run this business by hedging client-related flow. Of course, when hedges become much more expensive, as they did on the back of these events, we pay much bigger bid-ask spreads to enter and exit these hedges. That's really the biggest driver of these effects, which we highlight here with increased hedging costs.
Okay, thanks a lot for the explanations. I'm looking forward to meeting you.
Me too.
The next question is from Reto Huber of Research Partners. Please go ahead.
Hello, everyone. Thanks for taking my last question. Basically, all of them have been answered, but nevertheless, there is one that remains. You also discussed it partly, but I still don't really understand. You said you continue to hedge, you continue your hedging program. I still wonder since platform trading in the secondary market and the level of the net fee income margin increases in extremely volatile times like the one we just saw, why do you still need your hedging program?
It's a good question. It has a lot to do with the fundamental philosophy we run here in this firm, both management and the board. The philosophy is no matter what happens, we always need to safeguard the interests of our clients. I mean, that's by far the highest good this firm has to protect. In order to do so, we obviously need to also safeguard the position of our capital and solidity of our financial situation. Now, I give you a concrete example. You have a reverse convertible on a stock, which gives you some Greek exposure. Say you have a Vega exposure on a stock which is a 2022 exposure. That Vega exposure has gone from 20 to 50 on the back of just abnormal markets. The client now says, "I want to sell." You basically buy at the fair value of that Vega.
We have other Greeks influencing the price. I take that as a parameter because it illustrates the example. You buy that product back with an implicit Vega assumption of 50. You go to your hedging markets, you find that all market participants simply do not want to take position. You find a bid-ask spread of 30 to 70. You can obviously say, "You know what? We are Leonteq. We understand that volatility will also come back again. That's just a silly price. We are now not going to sell at 70." Aside of the fact that we are locking in a loss compared to what we paid to the client, it's just an absurd price. Even if Vega stays at 70 for a few days, it will come back because it always does.
Look at any historic volatility chart, it can spike, but it will come back. That's a fundamental approach a firm can take. I would say that's a firm which takes market views and neutral position. The problem, obviously, if you take that approach is it can obviously come back, but before it comes back, it can go from 50 to 200 or 300. We saw this happening during the financial crisis when all of a sudden volatility on UBS went from 20 to 200. UBS has an underlying share. For a very short period of time, but it was there. Obviously, as any other regulated entity, we would mark to market all our positions. You can now take the view, which is at 50, with that sort of bid-ask spread 30 to 70 in the market, now to hedge. Now, Leonteq will never take this view.
We will go and hedge it at CHF 70. If it means that we have to lock in half a million CHF of a loss, we will take that loss. We have enough substance within this firm to take that loss. You can now do something else. You can say, "You know what?" Obviously, we see the market before the client transacts. We see the market is at CHF 30 to CHF 70, we ask the client CHF 90. Then we unwind at CHF 70, and everyone is happy except the client. That's the approach firms can take, but that's not an approach we will take. These clients have been good clients for the last 30 years, and hopefully they will remain good clients for the next 30 years.
Sometimes a firm needs to be prepared to take a loss to enable a client a better outcome and a better service. What makes it even a bit more difficult is that none of what I've just said is static. It can well be that by the time you have the client executing and you go back to the market, you don't have a 30/70 spread, but maybe a 20/50, and then you're fine. Worst case, it's a 50/80, and then you are less fine. The point is, Leonteq has, and will in the future, make sure that our procedural market risk is within our risk appetite, which is limited. It's limited because in a worst case scenario, you could face further losses. We just don't want to end up in that scenario. It's not in the interest of anyone.
Okay. Thank you very much. Also, congrats on your very precise landing and your strategic progress you made during the past year.
Thank you very much for your kind words. Sometimes you need to be lucky, obviously, with regard to the precision of the landing, we were reliant when we made the assumption the clients would actually repay us for the service and quality of platform approach we showed in the crisis. I'm pleased to say that this materialized subsequently.
Very good. With that, we thank everybody on this call for joining today and for their attention, and wish you all a good day. Thank you.