Broker ICAP’s revenues hit by US swaps rules
ICAP has said this morning that its revenues were down six per cent year-on-year in the last three months of 2013 due to bank deleveraging and stronger regulatory controls.
The UK-based broker said that “challenging market conditions” pushed earnings lower, but that its cost savings programme remains on track.
Management said profit before tax expectations remain unchanged but warned that other factors such as ongoing bank deleveraging and the potential effect on financial markets of the new swaps rules could impact performance in global brooking over the final quarter.
The new SEF regulatory environment – SEFs are regulated platforms for swap trading – swap execution facilities – and are mandated in the US – had a “disruptive consequence”, said ICAP.
It added that reduced activity by investment banks could also impact performance.
Michael Spencer, Group Chief Executive Officer, said:
Trading activity across many markets was down in the third quarter, compared to the prior year, with a slower December than we anticipated.
Although market conditions remain difficult, we saw a modest improvement in activity in January as the on-going debate about the Federal Reserve quantitative easing programme continued.
Shares are up over one per cent this morning:
(Google)