Greek Euro Exit Would Be ‘Almighty Relief,’ ICAP Chief Says
A Greek exit from the single currency is now inevitable and would open the door to a smaller bloc made up of fewer, stronger economies, Spencer said in an interview with Bloomberg Television’s Francine Lacqua in London. He declined to identify which other countries should leave the euro.
“The sooner we get back to a narrower euro the better,” Spencer, a former treasurer of the U.K.’s Conservative Party, said. “In the meantime, it certainly will be a difficult period but that is the right solution. I envisage a euro around a smaller number of much stronger economies.”
Spencer spoke after ICAP, the world’s largest broker of transactions between banks, posted a 27 percent decline in full- year profit for the year through March and said Europe’s sovereign debt crisis hurt market activity in April and May. Revenue slipped 3 percent to 1.68 billion pounds, missing the 1.7 billion-pound median estimate of 15 analysts surveyed by Bloomberg.
“The Greek, the euro situation goes from bad to worse with alarming regularity,” Spencer said. “I wish I could give some degree of comfort but it is difficult.”
Interdealer brokers such as London-based ICAP act as a go- between for banks that trade bonds, stocks, currencies, energy and derivatives.
ICAP closed 0.4 percent higher at 336.5 pence, for a market value of about 2.2 billion pounds ($3.5 billion). The stock has dropped 3 percent this year, after sliding 35 percent in 2011.
Net income for the year ended March 31 fell to 137 million pounds from 187 million pounds in the year-earlier period, the London-based firm said in a statement today. Profit was hurt by goodwill writedowns on its acquisitions of equity derivatives broker Link in 2008 and Brazilian broker Arkhe the next year.
ICAP cut operating expenses by 4 percent to 1.31 billion pounds for the year, and said it expects to save at least a further 50 million pounds annually by the end of March 2014.
The company will pay a final dividend of 16 pence a share.
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