Good morning, everyone, and welcome to the press conference call of Leonteq's full year 2020 results. All presentation materials can be found in the Investor Relations section of our website. We have also provided a comparison of the analyst consensus summary versus our actual reported results. 2022 also marks Leonteq's 10th year as a listed company on SIX Swiss Exchange. We took this opportunity to significantly reconstruct our annual report design framework, and are presenting this year our online first reporting suite. It consists of our online report, the complete annual report as a smart PDF download, and the brochure for Leonteq's 10-year anniversary. 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 from 2022.
Marco then will present the financial performance of the company before then Lukas will go into an update on strategy and an outlook. I hand over to you, Lukas.
Thank you, Dominik. Dear ladies and gentlemen, dear shareholders, analysts, and media representatives, we would like to start this presentation by stating that 2022 was an exceptional year in many ways. We recorded a strong result underlying the resilience of our business model in extraordinary times. We demonstrated our ability to further improve earnings quality, thanks to our efforts to further diversify our offering. At the same time, we deliver tangible and measurable progress along our four strategic pillars and receive notable external recognition for our platform and sustainability efforts. This is also why we will continue to invest into our key growth initiatives with a view to further expand our ecosystem for investment solutions.
Our record results demonstrated the continued effectiveness of key initiatives that we have made over the past years, and that you will hear more about throughout our presentation today, beginning now on page four. We achieved a total operating income of CHF 456.4 million, up 9% year-over-year. We reported 11% growth in our profit before taxes to CHF 193.3 million. This is up from CHF 175 million in the prior year. In line with the guidance we provided in December of last year, we reported a group net profit of CHF 156.4 million in line with the record result from the prior year. In 2022, our earnings per share rose by 1% to CHF 8.58 per share.
We will also propose to our shareholders a 33% increase in our dividend to CHF 4. We expect to launch, in addition, a share buyback program of up to CHF 18 million, corresponding to a pro forma distribution of 1 Swiss franc per share in early April 2023. The dividend, together with the share buyback, therefore equals a total distribution to shareholders of 5 Swiss francs, and the payout ratio is accordingly 58%, in line with the communicated target of more than 50% of group net profits. At the same time, in view of the generally more challenging market environment for investors, we recorded subdued levels of client activity in most of our regions. While total group turnover was down by 20% compared to the prior year, turnover generated with Leonteq's own issued products remained relatively stable at CHF 13.6 billion.
Also our client franchise remained strong, as evidenced by roughly the same number of intermediaries entering into transactions with us in 2022 compared to 2021. Our capital base has been further strengthened to CHF 933 million, which is a 7% increase compared to the prior year. Return on equity, accordingly, was 19% for 2022, down 2 percentage points year-on-year. Looking at our quarterly economic revenue chart on page five, you can see that we have been able to continue on a solid track record of revenue growth since founding the company 15 years ago in 2007. Accordingly, our average quarterly earnings have increased by compound annual growth rate of 23%.
This chart also shows that whilst Leonteq is on a clear growth path, that path is not linear and that there are inherent volatility quarters in our business model and hence in our quarterly earnings. Of course, this was also very much true for our 2022 performance. Q1 2022 was a particularly strong quarter on the back of a strong net trading result, driven by the elevated and exceptional levels of overall market volatility during that period. Q4 2022 was a rather weak quarter where fee income continued to be subdued. However, stable on a month-to-month basis, whilst trading income did not provide the additional contributions we have seen in the prior quarters. Marco will now continue the presentation and go into more details about the drivers of our financial results.
Thank you, Lukas. Also good morning and warm welcome to all participants from my side. I would like to begin with highlighting three, from my point of view, important points. First of all, we have delivered again record results in a challenging market environment, and the results underscore the resilience of our business model. We made tangible progress in delivering our strategic initiatives, and will also further increase the investments in key growth initiatives in 2023. Last but not least, we propose to increase in line with our capital return policy, the dividend to CHF 4, and will on top launch a share buyback program of up to CHF 18 million. With that in mind, let's move into Leonteq's financial performance for 2022. This begins on page seven.
Looking at our financial results, we report a 9% growth in our total operating income to CHF 456.4 million, primarily reflecting the strong performance in our net trading result. Total operating expenses rose to CHF 263.1 million compared to CHF 243.3 million in 2021. This was mainly due to an increase in planned investments into our strategic initiatives. Demonstrating our operating leverage, profit before taxes increased by 11% to CHF 193.3 million in 2022. Lastly, in line with the guidance that we provided at the end of December 2022, you can see on the right-hand side charts that our group net profit reached CHF 156 million, which is in line with the record results of the prior year.
I will provide an in-depth look at both our top line and cost line development in the next slides. Let me spend now a few words on our tax rate. Leonteq's income taxes are driven by the amount of profits taxed either in Switzerland at statutory rate of 19.7%, or by the group's foreign operations, which are taxed at varying rates depending on the jurisdiction. In 2021, a significant portion of profits were subject to income taxes in jurisdictions where Leonteq was able to offset these profits with accumulated tax loss carryforwards. As disclosed in our annual report 2021, at the end of 2021, we did not have any unrecognized tax loss carryforward anymore.
In 2022, a significant portion of our profits, which are recorded in jurisdictions where we earn our trading income, are taxed at the local tax rate that is above the Swiss statutory tax rate of 19.7%. As a result of these factors, our tax line increased to CHF 37 million from CHF 7 million, and our tax rate increased from 11%- 19% year-on-year. Let's now discuss our top line on page eight. Our top line primarily comprises two components, net fee income and net trading result. Looking at our fee income development, we recorded subdued levels of client activity on the back of a challenging market environment. Despite these headwinds, Leonteq's franchise remains strong, as evidenced by the stable fee income on a monthly basis. We recorded different patterns across our offering.
Our new business initiatives were in fact less impacted by the reduced client flow compared to our traditional structured product business. This positive development is particularly thanks to our efforts to diversify our offering and investing in initiatives such as the asset management light, the pension savings, as well as the balance sheet light. From an issue perspective, we saw an above average demand for Leonteq products compared to our historic partner products. Leonteq products only reduced by 7% in turnover, where we saw a turnover reduction in historic partners by 38%. This reduced dependency as well as the positive development with our new business initiatives that we have achieved over the past years underpins improved earnings quality.
Looking at our trading income, as we have reported to you in the past, our fee and trading income are codependent of each other, but are typically negatively correlated. In positive equity markets with lower market volatility, we tend to see strong fee income and rather flat to slightly positive trading results. In more volatile markets, clients tend to be less active whilst we benefit on the hedging side, thus providing sort of a natural hedge to our fee business. Concretely for last year, we continued to focus on disciplined risk management and recorded a very strong net trading result of CHF 264 million. This was mainly driven by exceptional levels of market volatility, in particular in Q1 and Q3 of 2022. In this environment, we also benefited from exceptional fluctuations in share prices of selected large cap companies.
Our record results also underscore the resilience of our business model in extraordinary times. Let's now move on to our cost development. On page nine, you see that we reported total operating expenses of CHF 263 million in 2022, compared to CHF 198 million in 2020. You may notice that we are comparing the increase from two years ago. We are doing this because we want to give you the full picture that has developed over this time. Leonteq continued to significantly invest in growth initiatives in 2021 and 2022. Compared to 2020, we spent an additional amount of CHF 21 million for strategic initiatives. On the back of these initiatives, we also saw operating costs to increase by CHF 5 million in the last two years.
On the other hand, we also saw a benefit from our nearshoring initiatives in the amount of CHF 4 million in 2021, and an additional amount of CHF 5 million in 2022. This was also a reason why despite the significant growth in our headcount to almost 600 employees, our fixed compensation expenses remained relatively stable year-on-year. Taking all these factors together, our cost base before additional variable costs and provisions increased to CHF 250 million in 2022. You can see in the lower half of the slide our cost base has increased further due to the additional performance-driven variable costs, primarily in 2021 and less so in 2022. The provisions for legal cases and one-off expenses grew mainly in 2021.
Looking ahead to 2023, we expect our cost base before additional variable costs and provisions to further increase due to three key factors. First, we will increase our annual spend in key growth initiatives by 50%, so approximately CHF 11 million- CHF 32 million a year. Second, we anticipate certain impacts of overall cost inflation. Third, we will recognize in 2023 part of the deferred variable compensation committed in prior years. My key message here is we continue to tightly manage our cost base but make targeted investments in our key growth initiatives, which we are executing in a diligent manner. Let's now continue on to page 10 to look at our solid 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 40% of the proceeds from own issuance into high-quality investment portfolio, and the other 60% into hedging positions such as equity securities or indices or derivatives. Likewise, as a result of the issuance partner business, we mostly hedge for our partners their structured products exposure by purchasing into either the underlying securities of the product or options. We reported a decrease of 14% in total assets from CHF 14.4 billion in 2021 to CHF 12.4 billion in 2022. This was mainly driven by decrease in trading financial assets by CHF 2 billion, which reflect our hedge portfolio and which was impacted by the lower client flow. The delta exposure has reduced due to the market recovery in the second half of 2022.
Our high-quality investment portfolio amounted to CHF 2.88 billion at the end of 2022. We have a strong liquidity position with more than CHF 1.5 billion in excess liquidity and a strong shareholders' equity amounting to approximately CHF 900 million. Moving to page 11, our strong capital position. We define the capital base as the aggregate amount of shareholders' equity and deferred income. Shareholders' equity increased by 8% to CHF 870 million as of the 31st of December 2022, compared to CHF 802.1 million at the end of 2021. This was driven by the strong increase in retained earnings of CHF 156.4 million, partially offset by the distribution of CHF 55 million to shareholders.
We recorded a net impact of - CHF 19 million to our OCI, mainly driven by the net unrealized losses on debt instruments measured at fair value to other comprehensive income, which were recognized on the back of widening credit spreads. We recognized an additional - CHF 50 million for employee-related share plans. Together with deferred fee income of CHF 63 million, Leonteq's capital base was further strengthened to CHF 932.8 million as of the end of last year. Moving to the last page of my section, we show on page 12 our attractive returns for shareholders as well as new capital return policy. The board of directors will propose a dividend of CHF 4 for the financial year 2022 at the annual general meeting at the end of March 2023.
This is a 33% increase from CHF 3 per share for 2021. This distribution will be paid in equal amounts out of retained earnings and capital contribution reserves. Leonteq's board of directors has also approved the launch of a share buyback program to up to CHF 80 million, which is equivalent to a pro forma distribution of CHF 1 per share. The program is expected to be launched in early April of this year and to run until the end of December 2023. The execution of the program is subject to market conditions and regulatory approvals. The shares are planned to be bought via second trading line on the SIX Swiss Exchange.
Shares that will be repurchased under the program are expected to be canceled under the new Swiss capital band regime to be approved at the annual general meeting of 2023. The dividend of CHF 4, together with the share buyback, this corresponds to a total capital return of CHF 5 per share for the financial year 2022. This combined is a payout ratio of 58% of group net profit, which is in line with our previously announced target of more than 50%. Today, we also provide you transparency about our refined capital return policy. Leonteq's business has developed and performed strongly in recent years. Our refined policy takes these developments into account, and we want our shareholders to participate in our success.
From the financial year 2023 onward, Leonteq will continue to target a payout ratio of more than 50% of the group's net profit. We have the ambition to pay annual dividend of at least CHF 2 per share, and the intention to launch annual share buyback programs if financial results permit. Our strong capitalization further gives us the strategic flexibility to execute a larger direct share buyback if a sizable block of shares becomes available. The board of directors and the management team are convinced that this accretive approach will offer attractive returns for our shareholders over the years to come. Before I hand over to Lukas Ruflin, I also want to briefly touch on today's announcement regarding my own role. As you have read, I will step down as CFO of Leonteq in due course to pursue new opportunities.
When I started at Leonteq more than six years ago, we had a capital base of approximately CHF 400 million and were undergoing a significant restructuring exercise. Since then, we have massively transformed the business, strengthened our capital base to more than CHF 900 million, obtained investment-grade credit ratings, and we recently received considerable ESG rating upgrades. We have also now delivered record results in two consecutive years, I'm leaving the company with a well-defined strategic plan as well as a set up on the ESG side that the company can build on. It's a good time for me to move on, I have agreed with the company that I will step down by the end of August. I'm grateful to the board of directors for the trust they placed in me.
I had the privilege to work alongside Lukas and the other colleagues at the executive committee and reshape Leonteq over the past six years. I'm also thankful for a fantastic CFO management team and the entire CFO division staff who significantly contributed to the company's development during my tenure. With that, I hand it back over to you, Lukas.
Thank you, Marco. In addition to our solid overall financial track record and strong capital base, 2022 was the first year of our fiveyear strategic cycle. Let's take a look at our continued execution of this on page 14. The pandemic-related trends affecting end investor behavior, digitalization, and online connectivity has accelerated the growth opportunities for Leonteq in terms of product distribution and white-labelling offerings. Against this background, we defined our growth strategy 2026 based on four key dimensions: offering, platform, regions, and sustainability. As we continue to grow our activities beyond the traditional structured products business, we are focusing on further expanding and diversifying our offering across products, asset classes, and issuers. Through these expansions, we intend to further grow the revenue contribution from growth initiatives and/or activities with lower balance sheet intensity.
With our scalable technology platform, we want to stay at the forefront of digitalization and further automate processes and services across the entire value chain. We will continue to create innovative digital solutions for and with our clients and partners. We will do this with the aim to increase the number of client transactions processed. Additionally, while further strengthening our market-leading position in Switzerland, we are expanding our offering to an international client base. At the same time, we are taking targeted measures to strengthen our brand in Europe, Asia, and the Middle East, with the intention to increase our revenue contributions from offices outside of Switzerland. Lastly, underscoring our ambition to further integrate ESG aspects into our service offering and business activities, we are continuing to implement responsible investing opportunities for our clients and continuing to integrate best ESG practices for sustainable development of our company.
In this context, you will see here that we have added two new sustainability targets for 2026. The first target is to surpass a 72% Trust Index score from Great Place to Work. For the first time in 2022, Leonteq worked together with Great Place to Work. As part of this, Leonteq employees globally were asked to participate in an employee survey as a first step in the process to build a great company culture at Leonteq. Based on the survey results, Leonteq scored an average Trust Index score of 68%. We, as a company, intend to build on this by implementing further measures to improve this score, subsequently conduct such surveys every other year.
We therefore aim to improve our overall Trust Index score to over 72% by 2026. The second sustainability target is to increase the gender diversity of Leonteq's staff base to over 25% female representation. Leonteq is a diverse company already today in terms of nationalities, background, and skill set we hire. Over the past years, we have hovered around 18%-19% female representation at the company. This, of course, is in part due to the fact that many of Leonteq's functions are in areas where there are more male than female candidates available. We have, however, recognized this challenge and are or will be implementing various measures to improve these statistics because we believe and are convinced that gender diversity is important to the success of a workplace.
Let me share with you now some of the achievements we have made in 2022 along the four strategic pillars of our growth strategy. I ask you please to look at page 15. As part of our offering pillar, we have introduced a new innovative white-labelling issuance model, via structuringHUB, which is designed to reduce time to market and cost for banks. VP Bank became the first structuringHUB sponsor, we are seeing good progress since the go live of the cooperation back in July 2022. Swissquote joined Leonteq's multi-issuer platform in early 2022, offering investors access to yield enhancement payoffs from Switzerland's market leader in online banking. The second half of 2022, the product offering was expanded to include participation products such as actively managed certificates and capital protection products.
Regarding Leonteq's Smart Hedging Issuance Platform, SHIP, all hedging counterparties have successfully transitioned to the use of the new alternative reference rates. We have connected to an additional hedging counterparty last year. This brings us to now a total of nine counterparties, including Leonteq, that are connected to the platform. In 2022, Leonteq was also recognized as a third country administrator under the E.U. Benchmarks Regulation. This will enable us to offer products that reference a wide range of proprietary indices to our clients. Leonteq also maintained its leading position in offering crypto assets in a securitized format by increasing our universe available to a total of 30 crypto assets. We also debuted our ETP+ label, which uses a Switzerland-based custodian and collateral agent and provides for daily independent checks, which serve as a key mitigator of the issuer risk for end clients.
Leonteq was and still is the first issuer of ETP products in the Swiss market, which is licensed as a securities firm by FINMA. Together with our investment-grade rating, our strong capital base, and our proven track record spanning more than 15 years now, we clearly differentiate from existing ETP issuers, which tend to be special-purpose vehicles with limited track records, rating, or regulatory sub-supervision, and often only with minimum paid-in capital. Within our strategic pillar covering our platform development, 2022 was marked by the launch of a new range pricing feature on LynQs that allows parameters to be combined in accordance with individual investor demands, with metrics pricing results presented in the form of a heat map in a matter of seconds.
We also rolled out new LynQs module called Academy, which is an online education program that has been developed in collaboration with the International Institute for Management Development, IMD, based in Lausanne. This course offered as part of our Academy module provides a deep dive into the world of structured products. Our continued efforts in the development of LynQs also led to LynQs being named the best issuance platform by Structured Retail Products. These achievements and the accompanying marketing efforts led to a significant increase in the number of clients connected to LynQs, which grew by 37% to 890 financial intermediaries. 2022, we also started developing a crypto asset platform to support custody, trading, and settlement of digital assets. We continued the build-out of our SIGMA platform to enable pension savings solutions in a scalable manner.
Regionally, Leonteq maintained its strong position in its Swiss home market. Together with our platform partners, we remained the leading issuer of SIX listed yield enhancement products with a market share of 24%, and currently rank as the number three issuer of SIX listed structured investment products, excluding the leveraged range of products with a market share of 12%. Underscoring our strong client focus on the European market, we won five awards at the SRP Europe Awards in 2022.
We continued our progress on establishing a strong market position in Italy, being recognized also at the Italian Certificates Awards, where Leonteq won the category of Certificate of the Year. As part of our ambition to further expand our offering to serve an international client base, we strengthened our regional management team in Hong Kong and Dubai and launched Shari'a-compliant trust certificates with the aim to grow our business in the Middle East. Our service center in Lisbon also strengthened this year with by now total number of 72 employees. As part of our sustainability efforts, we worked on the expansion of our reporting framework, which includes today's publication of our sustainability report in accordance with the GRI standards.
Led by the sustainability committee, which is positioned at the executive committee level, we defined a clear set of key performance and key risk indicators to monitor and report progress against our sustainability strategy defined by our board of directors. Among the measures implemented in 2022 is the publication of Leonteq's Code of Conduct and Ethics, the publication of the Supplier Code of Conduct, and the establishment of a global escalation whistleblowing policy and integrity line. We have now looked at our strategic progress for 2022. Let's now please also see how we are measuring our progress on the next page. A year ago, we told you that we would measure our progress along the four strategic pillars against a clear set of KPIs defined and communicated to you in early 2022.
While these are KPIs that we measure over five years, we want to be absolutely transparent about where Leonteq stands today. Here on page 16, you can see four progress bars. Reflecting Leonteq's increasingly diversified business offering that goes beyond the traditional structured products business by now, revenues from new business activities contributed 51% of overall revenues in 2022. This is an increase of 7 percentage points from the prior year period and demonstrates our ability to improve our earnings credit quality, thanks to our efforts to diversify the offerings. On the other hand, client transaction decreased from over 260,000 in 2021 to just above 170,000 in 2022.
Remaining above the pre-pandemic level of around 164,000 transactions recorded in 2019, reflecting Leonteq's continued business expansion and of course, also taking account of the fact that client activity last year was lower across the industry. On the back of heightened market uncertainty, Leonteq registered reduced activity in most of its regions throughout 2022, which you see on the chart three. Switzerland's net fee income was less affected due to positive contribution from our pension savings business in Switzerland and also the transfer of sales coverage for the Nordics region from Europe to Switzerland. As a result, net fee income in Switzerland totaled CHF 96 million in 2022. Operations in Europe generated net fee income of CHF 83 million, and net fee income in the Asia region, which includes in our definition, the Middle East, was circa CHF 24 million.
Our efforts in further embedding ESG considerations and sustainability practices into our business activities and reporting transparently on our progress each year has been recognized. In 2022, Leonteq received rating upgrades from a number of ESG rating agencies. MSCI, the world's largest ESG provider, assigned Leonteq a data rating upgrade to A from BB. In Sustainalytics, another leading ESG research firm, upgraded Leonteq's rating from the category medium risk to the category low risk. By these four progress reports, you can see that like in any other business, progress is not always made in a linear fashion. Although I'm less pleased about the fact that today we can only see two out of four check marks on this slide, I'm confident in Leonteq's capabilities to continue to diligently execute on its key priorities in the next four years.
I'm convinced that these efforts will eventually lead to positive progress marks in each of the areas highlighted. I would like to now pivot slightly and speak about Leonteq's ecosystem for investment solution. You can find this on page 17. Before elaborating on this slide, I would like to briefly pause and highlight to you that with this year's full year 2022 results, Leonteq is also celebrating our 10 years anniversary on the SIX Swiss Exchange. As part of the special edition of our annual report, in this context, we have highlighted how Leonteq has expanded its ecosystem for investment solution over the past 10 years. Gives you a good overview of the accomplishments made over the past decade.
I would kindly invite you to have a good look at our annual report, where we have also received testimonials from partners and ecosystem contributors, for which we are very grateful. Now going to specifically the slide on page 17, which shows to you the progress made in 2022. Our white-labelling partners on the left side to our 27 third-party issuers just below that, you can see directly across our main client types with whom we interact on a regular basis. On the bottom right, we have highlighted our SHIP hedging counterparties. Content, product, and technology enhancers are shown on the right-hand side in the middle. In this case, we work with different experts from various industries and disciplines in the pursuit of delivering high-quality solutions for our clients.
The ecosystem is then complemented by our digital solutions and connectivity to various marketplace and stock exchanges, among others, features for which, as mentioned before, we have also won various awards. Taking you to page 18 and highlighting for a moment the various awards. We aim at Leonteq to provide excellent service to our client and partners, therefore, we are particularly proud to have again received this year's Swiss Derivative Award, which has recognized now for the 12th consecutive year Leonteq as a top service provider in the market for structured products in Switzerland. We do not take this recognition lightly. We remain honored and grateful to our clients for this recognition, and we will continue to put our best efforts in servicing our clients and partners to their expectation.
We are, of course, also very pleased in the context of one of our strategic pillars defined, that the ESG rating agency start to recognize our efforts in this area. I've referred to before to the rating upgrade, particularly from MSCI and Sustainalytics, but would also refer to the other ESG providers listed on the page. Of course, we will continue our active engagement with all rating agencies on the back of today's, now for the first time, published part of the sustainability report as we strive to further improve our ESG ratings. On to page 19. Reflecting on the progress and recognition we have made and received during the first five years of our five year growth strategy cycle, we fully intend to continue investing in key initiatives going forward.
You can see on page 19 that we are increasing our yearly investments into these initiatives to CHF 32 million. We are expanding our product offering by further building out our EMC systematic indices and fund derivatives, including QIS businesses. We are expanding our crypto offering and investing platform capabilities for crypto assets. We are expanding our balance sheet light business. We are investing in an automated flow trading platform and intends to newly offer a large range of securitised leverage products in due course. We also plan to expand our issuer universe by building out our existing setups, including our recently launched innovative solution with structuringHUB and adding new white-labelling partners to this in due course. We will accelerate our digital solutions by the continued rollout of our white-labelling features to clients, and we'll continue to add new feature and functionalities on LynQs.
Our new pension savings offering will launch as a new innovative product concept for the voluntary retirement savings market in Switzerland. This is the so-called Pillar 3a pension saving foreseen by Swiss legal and pension laws and frameworks. We are also continuing to build out our SIGMA platform to enable saving solutions on an automated and scalable basis. Throughout Europe, Asia, and the Middle East, we will invest in marketing activities to strengthen our brand. We are continuing to integrate ESG aspects into our business activities. As a result of all of this, we will be guided by our strategy.
We have defined our key initiatives. We will work as a company towards our diligent execution of our growth strategy. Before we end today's call, I would like to now move on to summarize the full year 2022 and provide an outlook for 2023 on page 21. Leonteq recorded a record result in 2022 for the second year in a row. Our results were driven by a strong trading result on the back of high levels of market volatility. In this environment, client activity was reduced, but our franchise remained strong. The results demonstrate both the resilience of our business model and our ability to further improve the quality of our earnings. With our now refined capital return policy, we are providing attractive capital returns to shareholders, while being conscious and transparent about the inherent volatility in terms of quarterly performance of our business.
We are focused on executing on our growth strategy 2026, of which tangible progress on key initiatives has been made in 2022. Now looking ahead, we have built a solid and diversified foundation for the company to build on, and we are increasing our annual investments in key growth initiatives starting this year. Following two record financial years in a row, supported by unprecedented market condition, Leonteq expects to deliver more normalized profitability levels with profit before taxes of CHF 70 million-CHF 100 million for the full year 2023. Thank you for your attention. I hand back over to you, Dominik.
Thank you, Lukas. Thank you, Marco, for the presentation. We are now happy to start with the Q&A session, and we'll take the first question.
Sir, the first question is from Daniel Regli of Credit Suisse.
Good morning. Thank you for taking my question. I actually have, about six questions. Shall I just run through all the questions or shall I ask them one by one, and you want to answer them one by one?
Run all the questions, but then we answer them.
Quickly, one small question on page 16, where you show the revenues from new growth initiatives. I remember historically in the crypto business was included in this number. I'm just wondering, can you maybe talk a little bit about the composition of these numbers, particularly between 2021 and 2022? The 2022 result was obviously largely driven by the CHF 264 million net trading result. CHF 44 million of this was driven by the treasury result. Can you give me some color around what was driving this treasury result, and in particular, what do you expect going forward from the treasury result? Is this kind of also a result of the change in the rates environment we have seen during 2022? One question about your guidance for 2023.
Can you give a bit more color about the moving parts with regards to this guidance? In particular, what have you assumed with regards to treasury result and hedging synergies, but also with regards to costs? When I just ran through your cost details and guidance, is it fair to assume that you expect a cost base of around CHF 230 million for 2023? Then maybe quickly on the tax rate. I remember you have said something about the tax rate in 2022 and being driven by the locations. Can you explain to me what this means for the tax rate in 2023? Or what have you in mind about expectations for the tax rate in 2023? Then one question about the payout policy.
Should we now expect kind of a dividend of CHF 2 plus more significant share buyback? Or is it the ambition to keep the CHF 4 dividend more or less flat, and then complement this by additional share buybacks? Just about what is kind of your idea about the mix between dividend and share buybacks. Last but not least, a more general question. Have you seen any impact on demand for yield enhancement products from the current change or the change in rates and the rate environment? Thanks. This was it.
Thank you, Daniel. As you appreciate, we'll try to avoid to make this a detailed financial modeling Q&A session. We'll split the answer. Marco will briefly address your questions around crypto and 21 versus 22. He will talk about the treasury and the rates environment, and he will also refer to the tax rate, and I'll take on the rest. Marco.
Going to your first question, then the composition of the revenues from growth initiatives. I think we have clearly disclosed what is composed here in the number of the growth initiatives. You have there the crypto business, you have the asset management light business, you have the treasury, the pension solutions business. I think that transparency disclosed. With regards to crypto business. I think you will appreciate that we have disclosed the number in 2021, which was obviously a very solid number coming or in terms of revenues from the crypto business. You can assume, and I hope this is also not a surprise, that this number has gone down in 2022.
We have nevertheless seen a very good and solid resistance of these new initiatives despite the very challenging market environment that we have seen in 2022. That's one of the main reasons you also see there an increase that I think the initiatives and the spending that we did in these growth initiatives have also paid off in terms of resilience of our business model.
If I may add, Daniel, from my side, the asset management-like business actually has really proved to be rather stable, with a stable contribution year-on-year, also then clearly reflecting the slightly recurring, more recurring nature of that, revenue stream. Same is also true on the pension saving business. I think that has benefited from the, increased rates environment. Also there, we see positive contribution to that 7 percentage point increase from 44%-51%.
The second question, Daniel, with regards to treasury. You see the number of CHF 48.9 million, which has increased and is in line with the first with the results that we achieved in the first half year, which is also mainly on the back of the increase in interest rates. Nevertheless, I've mentioned that already in the presentation for the first half year results presentation. You need to be careful when you look at that number isolated because there is an impact also that is recognized not to PNL, but to the other comprehensive income which is transparently disclosed. On top you also have some sort of other, if you want, treasury, like impacts which are recognized under fee expenses as well as the interest expenses.
I'm happy to guide you through when we meet in a one-to-one meeting to just show you all the effects which probably are linked to treasury. The pure treasury income is correct, it's CHF 48.9 million. The last question with regard to tax rate, it's... As I mentioned during my presentation, the tax rate 2021 was positively impacted by the fact that we had the loss carry forward in one of the jurisdictions, which we could offset in 2021. We have used all of those tax loss carry forwards during the year 2021. This is transparently disclosed also in our annual report 2021.
For 2022, the tax rate was sort of negatively impacted by the fact that we did not have those loss carry forwards anymore, but also due to the fact that some of the profits were generated by the trading results and were generated in jurisdictions outside of Switzerland, where we have a tax rate which is higher than the statutory tax rate of 19.7% in Switzerland. Going forward, I think the safe assumption or very good guidance and you will appreciate it for us, very difficult to give you some sort of guidance on a tax rate. That's the reason why we also guide for 2023 a pre-tax profit of CHF 70 million-CHF 100 million.
It will much depend where we generate the earnings and revenues, if that's from trading or from fee income and in which jurisdiction this will fall. I think also looking at some sort of a range, I think something in the range of 50% tax rate is a safe assumption to take. That's also to be taken with extreme prudence because it's very difficult to give you a precise guidance.
I would probably complement that range by saying 15%-20% for the reasons Marco highlighted, Daniel. On to your other three questions which are about the guidance for the year, the dividend, and also for the general client demand for yield enhancement products. Look, on the guidance, we have gone a very large step towards our shareholder as a stakeholder group by giving a pre-tax guidance. It would be inappropriate to now comment on the cost line because then de facto you would have everything from top line to cost line to pre-tax. That is inopportune because we would try to do your job at which you are much better than we, Daniel.
What I can say as a general comment on the costs, we have had a very good, and I would say also to some extent, very diligent execution of our strategy. We were certainly a beneficiary of unexpected market events which you cannot at all plan, but you need to be able to capture those opportunities when they arise. As a result, on the back of a difficult 2022, we had very solid financial performances in the last two years. Now, that puts us in a somewhat comforting position with regard to our investment plans. I've highlighted on page 19 all the areas we want to invest into. As you certainly have noted, as I was leading you through them, it's quite a mouthful which highlights the diversity of the investments. Of course, with these investments come cost.
We have highlighted it. We increased the expenditure budget by about 50%. That's a very big step in a market which is, you know, still a bit uncertain in terms of the outlook, but it's both a reflection on our side of the opportunities we have in front of us and certainly also of the capabilities we have to finance those. Now, these extra investments come, of course, at the price of a lower net profit during the key build-up and investment phases. Therefore, our guidance takes into account these extra investments. That's the first message there. With regard, that brings me to your second question then, our ability to have an even more attractive policy in terms of shareholder return.
The clear message of today's communication with regard to the board decision in terms of proposal to the 2023 AGM relating to the 2022 financial results is that we deliver exactly what we have promised to our shareholders. We have said we will go to an increased payout ratio of more than 50%. Cash equivalent per share on a pro forma basis, taking into account the share buyback, is CHF 5. That reflects very much also the result of an extensive shareholder and stakeholder survey we did last year, where we got a very clear input from large institutional and other shareholders that it would be opportune to start a share buyback program, ideally on a rolling basis, taking account of what many believe is a relatively low share price in terms of the outlook potential.
Therefore, as a transition, now there is this CHF 4 cash dividend and CHF 1 equivalent of share buyback. That starts and will be executed this year. With regard to the outlook, the message is as follows: The firm has the ambition to pay a cash dividend of CHF 2. That's an ambition level. It cannot be committed because we will always want to retain financial flexibility. Given our financial profile, it's an ambition we feel all confident we should, expecting normal market circumstances be able to meet. We also expect if you, for example, look at our guidance for next year to have extra earnings capability, which we do not need to use to reinvest.
There the message is we intend to supplement a minimum dividend of CHF 2, I stress here minimum, with an annual share buyback program. Of course, we can discuss all potential scenarios, including a scenario where financial performance is more difficult, say, 2020 as an illustration. There you should assume we would prioritize the cash dividend and only in a second step do the share buyback. The message with regard to share buyback beyond the hard numbers is the following: To the extent our financial results permit, the company intends to start on an annual basis share buyback programs. You certainly have noted our very strong capitalization. We want to maintain that to obviously through retained earnings, also increase it over time.
That will give us the flexibility to also on an opportunistically basis step in and do a larger share buyback if a block becomes available in the market. From a demand point of view, we are positioned. Of course, you can only do transaction when there is also the offer. We are not aware of a block that being available in the market, but should it become so, you could expect an extra effort by Leonteq. That takes me to the last part of your question, yield enhancement products. They have both the elements of derivative, but also zero bonds. The higher interest rate environment is very beneficial with regard to the terms and conditions of products issued with regard to the zero bonds. You have now an embedded coupon there, which before usually used to be negative, depending on the currency.
It's now positive. It's also a function of the attractiveness of, for example, a put option the investor would sell to us, which will be driven by various input parameters, including, for example, volatility parameter. What we have seen fairly consistently in our history that when volatility is lower and markets are quiet, we see an increase of client demand. When the reverse happens, we see less client demand, but also, usually assuming no political risk events occur, we have additional hedging contribution. That's really what you have seen last year, to some extent the year before. That's what I would expect happens in 2023.
Either there will be fairly calm markets, in which case I would expect client demand to pick up on a year-to-year basis, or there will be very volatile markets, in which case I would expect client demand to remain subdued. Of course, hedging contributions would be larger. I refrain from detailing our budget assumptions with regard to the various input parameters driving the top line, but as said we feel confident about the pre-tax items, and that should really let you very confidently guide your forecast model for the year to come.
May I follow up quickly with two points? Just, I mean, historically, you always said you budget for a zero hedging contribution. Is this still valid, or is this no longer valid? Secondly, can you just give, quickly, a little bit an indication how you started into the year with regards to both turnover as well as hedging contributions?
Daniel. Again, thank you for the question. I'd try to answer high level, but I'd like to re-stress again that with the pre-tax profit guidance for this year, we have de facto already given you the output of what your questions are trying to lead to in terms of our assessment. Look, it's very simple. What do we guide in terms of additional hedging contributions? I will not give you the number, but it would be unreasonable to expect hedging contribution to drop to zero because January one came, when they were positive during the entire year before. You should not assume it's just zero, but it's to some extent not that relevant for the reasons I've mentioned before.
If they were zero, we probably would have a higher fee income contribution than budgeted, and if they are according to budget, that's because that's part, right. If it's lower than budgeted or if it's higher than budgeted, you would obviously have higher market volatility and pretty much a continuation of what we saw in 2022. With regard to the start of the year, it's again a bit irrelevant because it's only a few weeks, and we have, based on yesterday's assessment, given you the guidance range. I stress again that this range, of course, also takes account of the fact that we are going to invest a decent higher amount of money into some growth initiatives than the year before.
Based on the starting to the year, we feel confident with this guidance, and I could now give you a five-minute debrief of various input parameters you had beginning of the year, less volatility. You know what that means for us. In the last 10 days, a little bit more activity in terms of market moves. You know what that means for us. It's to some extent quite irrelevant because it's just the beginning of the next 12 months period, and the sum of all of what we expect to come brings us to this pre-tax profit guidance.
Okay. Thanks so much, Friedrich.
I'll to the extent there are no questions, I'd like maybe to conclude with one last remark. You have obviously noted, Marco referred to this, about the news about his eventual departure. First, it's too early to say goodbye, Marco. We'll continue together with the management team to guide and steer the Leonteq ship through the next six months. We are obviously immensely grateful to him for all his outstanding contributions since he joined. He joined at a difficult point in time for Leonteq, very successfully helped us reposition the firm, was instrumental in many of the key points I was speaking about today. He's also the chairman of the sustainability committee at EC level, the results, again, speak for themselves.
We, as I said before, are not yet at the stage where it's time to say goodbye, and he will also present with us the half-year numbers. He and I are available in the coming days, either individually or together for the upcoming roadshow meetings, and we are very happy to take on the questions you might also have in this regard, if you have more specific questions. I'd like to thank everyone for their attention and we look forward to being personally in touch with you in due course. Thank you.