Tullett Prebon says trading still challenging as revenues decline

City A.M. Reporter
TULLETT Prebon reported a three per cent drop in first-half revenue yesterday, as challenging market conditions and subdued trading weighed on the interdealer broker’s business.

The brokerage said revenue reached £439.8m in the six months through June, down from £455.1m a year earlier. The fall came despite a late surge in trading volumes in May and June, triggered by a rise in benchmark bond yields.

Terry Smith, Tullett’s chief executive, said it was “still too early to tell” whether the uptick in trading would translate into a more sustainable recovery.

A big downturn in client activity since the financial crisis has hit brokers, forcing many to cut costs and let staff go.

“A significant recovery is not likely to materially manifest itself until there is the prospect of an increase in US interest rates,” analysts at brokerage Numis said in a note.

Tullett also said that regulatory costs continued to rise and that the final design and impact of new rules to govern over-the-counter products remained unclear.