BROKER Icap said clients have rediscovered their appetite for risk amid the spring rally in equity markets.
The world’s largest interdealer broker, run by Conservative donor and Downing Street guest Michael Spencer, said profit for the year ending 31 March would be at the upper end of analysts’ expectations of £336m to £358m.
The figures are still substantially down on November 2011 predictions of £358m to £390m profit.
Yesterday Spencer, the founder and chief executive, said: “Icap is on track for a robust performance for the year despite the demanding economic environment.
“In the last three months we have seen an improvement in risk appetite in some markets. We expect to see a slow move towards more normalised markets as the year progresses.”
The firm, which works in the bond, foreign exchange and swaps market, said its oil and gas arms had performed strongly in its final quarter. Shares dipped 3.5 per cent to 394.6p, however, on analysts’ concerns over credit markets and whether banks’ foreign exchange arms can match trades themselves rather than use an external venue such as Icap’s EBS.
It has reduced expenditure by £20m during the current financial year, partly by cutting jobs and bonuses in less profitable areas.
Spencer, a former Tory treasurer, was this week named as one of the City grandees who have attended dinners at Prime Minister David Cameron’s official residences. Last month Icap bought European biofuels dealer Sun Commodities although it did not declare the value of the deal.