Leading global interdealer broker Icap has announced strong growth in revenues and profits for the six months to the end of September.
Leading global interdealer broker Icap has announced strong growth in revenues and profits for the six months to the end of September. Group revenue rose by 15 per cent to GBP626.2m and pre-tax profits were up 36 per cent at GBP141.1m.
Average daily electronic trading volume grew 27 per cent to USD818bn and electronic trading revenue increased by 46 per cent to GBP125.9m, following significant investment in the group’s electronic broking systems.
‘Icap delivered outstanding results in busy markets during most of the first half to the year, despite significantly adverse exchange rates, benefiting from higher volatility in the interest rate, foreign exchange, energy, emerging and credit markets,’ says chief executive Michael Spencer.
‘The increased activity in July and August, initially as a result of the instability in the sub-prime mortgage market in the US, was particularly noticeable as those months had been slow in 2006. Both electronic and voice broking businesses felt the positive impact of the higher levels of activity, and we benefited from the substantial operating leverage in the electronic business.’
Spencer notes that the newer areas that the group has been focusing on, energy, credit derivatives, emerging markets, equity derivatives and transport, all grew faster than Icap’s business overall.
‘The new markets and businesses that Icap has introduced during the past three years together accounted for 19 per cent of group revenue during the first half of the year,’ he says.
‘Icap’s markets continue to display strong, long-term structural growth. We currently estimate that the underlying rate of growth of industry revenues, in the medium term, may be 10 per cent or possibly higher, though there are periods when volatility and consequently volumes in our markets can be high.
‘Post-trade services are an area where technology innovation is creating exciting new business opportunities for Icap, and the new acquisition of Traiana will help capitalise on significant potential growth.
‘During the past eight years we have built a strong competitive position in our markets; both voice and electronic. We have the resources, both people and financial, to drive further significant organic growth for our business and make appropriate acquisitions.’
