ICAPexpects profit to fall
ICAP, the world’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’s.
Chief executive Michael Spencer said the group had “made a solid start to the year across many markets ahead of a pronounced seasonal slowdown during the summer”.
He said the company’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.
However, he said credit and equity derivatives were experiencing “more difficult conditions”, while electronic broking was also down, although that was being offset by cost reductions.
Spencer, who is seen as one of the City’s most influential figures, said the company’s drive to cut costs by £23m in 2009/10 was complete.
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.
The group enjoyed record pre-tax profit for the full year 2008 of £346m, netting Spencer £23.5m on his holding in the company.
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.