Icap profits suffer an ‘extraordinarily tough year’

Broking giant Icap saw its profits tumble 20% last year and warned that despite a good April, market conditions remain “fragile and unpredictable”.

But founder and chief executive Michael Spencer said the business had cut costs and developed new products, which meant it should prosper when markets revive.

He said: “This has been an extraordinarily tough year in the wholesale financial markets. Trading activity across all asset classes was negatively affected by a combination of cyclical and structural factors, including the depressed global economy, a low interest rate environment and lack of clarity around some aspects of regulatory reform.”

Revenues for the year to end-March fell by 12% to £1.47 billion, while pre-tax profits fell by a fifth to £284 million, which was slightly better than the market expected. Icap shares gained 18.8p to 316.2p.

Spencer said that the firm had now achieved annualised cost savings of £80 million, which is £20 million more than its original target. Part of this came from the departure of almost 350 voice brokers, although net staff numbers were down only 147 at 4,976.

He said one employee remained suspended and three on administrative leave over ongoing regulator investigations into Libor-fixing.