Brexit fallout: Currency market bloodbath was a boon for broker Icap

Jessica Morris
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ICAP Brokers Continue To Trade During Financial Turmoil
Icap is changing its name to Nex Group (Source: Getty)

The market turmoil that followed Britain's shock decision to leave the European Union was a boon for broker Icap - but that wasn't enough to offset the wider difficulties facing its electronic trading division.

The firm, which will soon be called Nex Group, said today that currency trading volume jumped to $200bn on 24 June. It came after Britons confounded polls by voting to Brexit, sending sterling to its lowest level against the dollar since 1985.

But headwinds such as record low interest rates meant its electronic markets revenue still slumped three per cent year-on year in the three months to 30 June. Icap matches buyers and sellers of bonds, swaps and currencies.

Read more: Britain's bright Brexit future - a trader's perspective

Post trade risk and information revenue jumped 12 per cent, helping the group's total revenue swell seven per cent during this period. The company's shares fell 0.18 per cent to 451.6p per share this morning.

But Icap said the referendum could prove problematic over the longer-term, as it will delay the return to more normal market conditions. The already slow crawl back began when the US Federal Reserve raised interest rates back in December.

Read more: Why Brexit won't be a disaster

Michael Spencer, chief executive of Icap, said: "This journey looks more uncertain now although the subsequent decline in sterling in the foreign exchange markets does provide us with a significant windfall benefit."

It added that the potential merger of its global hybrid voice broking business with peer Tullett Prebon "remains on track", while it is "cautiously confident" despite the uncertain economic outlook for the UK.

"The referendum result was a tremendous shock to global financial markets but our platforms demonstrated resilience," Spencer added.

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