Icap boosted by electronic broking arm

ICAP, the world’s largest inter-dealer broker, yesterday revealed record profits in its electronic broking business, representing a hike in demand for super-fast derivatives trading.

Profits at the firm’s electronic brokerage unit jumped 23 per cent to £123m, contributing more than a third of the group’s £350m profit for the 12 months to the end of March.

Icap’s profits were up four per cent on the previous year, while turnover increased eight per cent to £1.7bn.

A final dividend of 14.68p will be paid by the company, giving a total pay-out of 19.95p.

More than 4,300 trades by 41 banks, worth a combined €360bn (£317bn) have been completed on the company’s i-Swap platform this year.

The company said it had benefited from turbulence in the world’s commodity markets and rising concerns about higher inflation.

“It has been another period of substantial progress for our electronic broking and post trade risk services businesses. During the year we continued to increase our market share,” said chief executive Michael Spencer.

The strong results come as US and European regulators plan to draft rules to force a swathe of over-the-counter (OTC) broking onto electronic trading platforms.

Legislation, expected in draft form as early as this year, will attempt to make markets more transparent.

Icap said it believed its electronic platform would fit with the new rules.

Spencer added: “We have made a good start to the new financial year and the short-term outlook is underpinned by macroeconomic stress and continuing market volatility. We are confident we can continue to deliver growth as we continue to invest in the business.”