ICAP profits fall as investment banks cut back
INTERDEALER broker ICAP reported falling incomes in the past six months as bank deleveraging hit its business volumes.
Group revenue fell six per cent in the third quarter, compared with the same period of 2012 the broker said.
The introduction of new rules in the swaps market also hit incomes.
However, the start of tapering by the US Federal Reserve increased some volumes, supporting revenues.
“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,” said chief executive Michael Spencer.
“Innovation is vital for our success and our strong cash generation allows us to continue to invest in our future growth. The launch of the ICAP swap execution facility was a very important project.”
Analyst James Hamilton at Numis warned the firm is facing regulatory investigations.
“We believe the investigations into ICAP to date and the consequent £55m of fines demonstrate substantial operational risk which the Financial Conduct Authority may wish to address,” he said.