Financial markets broker ICAP has cut its profits forecast for the current year due to weaker trading linked to the euro zone crisis.
ICAP, an inter-dealer broker in the bond, foreign exchange and swaps markets, said it now expects to make a profit of between £336m and £358m, down from its prediction in November of a profit in the range of £358m-390m.
"The continued uncertainty in the euro zone and constraints on market liquidity, together with customers reducing risk before the year-end, led to more subdued volumes," the company said.
ICAP said its trading volume in electronic markets was down seven per cent at $730bn in the fourth quarter of 2011, while its core voice broking business recorded lower activity overall.
"The numbers represent a sharp decline relative to ICAP's November expectations, but the market largely anticipated the weak trading outlook, and ICAP now expects to reach the high end of the analyst range," said Richard Perrott, an analyst at Berenberg Bank.
