BROKER Tullett Prebon yesterday tried to reassure investors worried about the effect of global market turmoil on the City by unveiling a series of cuts it carried out late last year.
The interdealer broker said last year’s efforts to slash costs – thought to include the loss of about 80 brokers in the US, Asia and Europe – would lead to a £10m charge for the 2011 results. More savings are set to follow in the first half of this year.
Tullett’s decision to break with tradition and make a pre-close statement comes against a gloomy backdrop for the industry, which has been hit as banks cut their appetite for risk.
Yesterday Tullett, which acts as a middleman in securities deals between investment banks, said: “The world’s financial markets have remained unsettled throughout the year. There have been periods of market volatility and heightened activity, although there have also been periods of more subdued activity.”
Numis analyst James Hamilton said the cost-cuts reflect the “very difficult operating environment” facing the broker and warned that an economic recovery and interest rate rises remained “distant” prospects.
The over-the-counter model, however, remains “robust”, it added.
Tullett, which was spun out of stockbroker Collins Stewart in 2006 and is led by Terry Smith, said last year’s sales are likely to be in line with the £908.5m reported for 2010.
Both Tullett and Icap, as well as rivals BGC Partners and GFI Group, which match the buyers and sellers of bonds and swaps, hope regulatory changes in the US and Europe will boost their businesses.
Shares in Tullett inched up 0.22 per cent last night to close at 271.8p. Its annual results will be published on 6 March.