ICAPexpects profit to fall

ICAP, the world&rsquo;s top interdealer broker, said it expected a six per cent increase in group revenues for the first half, although it warned interim pre-tax profits would be below last year&rsquo;s.<br /><br />Chief executive Michael Spencer said the group had &ldquo;made a solid start to the year across many markets ahead of a pronounced seasonal slowdown during the summer&rdquo;.<br /><br />He said the company&rsquo;s diversified business model had allowed it to benefit from short-term interest rates in many of its key markets, as well as steep yield curves and high volumes of government debt issuance.<br /><br />However, he said credit and equity derivatives were experiencing &ldquo;more difficult conditions&rdquo;, while electronic broking was also down, although that was being offset by cost reductions.<br /><br />Spencer, who is seen as one of the City&rsquo;s most influential figures, said the company&rsquo;s drive to cut costs by &pound;23m in 2009/10 was complete.<br /><br />However, he said investment in new business would see profit before tax for the half year fall slightly below that seen during the same period in the previous year.<br /><br />The group enjoyed record pre-tax profit for the full year 2008 of &pound;346m, netting Spencer &pound;23.5m on his holding in the company.<br /><br />Spencer said he welcomed international regulatory efforts to increase supervision and transparency in the over-the-counter derivatives market, saying it would increase market efficiency.