ICAP Sees Profit at Lower End of Guidance, Revenue Falling 13%
ICAP Plc (IAP), the world’s largest broker of transactions between banks, said it expects full-year profit will be at the lower end of the guidance it gave last month after trading in March faltered.
Pretax profit for the year through March will be about 280 million pounds ($424 million), the London-based firm said in a statement today. Full-year revenue will probably be 13 percent down on the previous year.
“While we had a better start to the fourth quarter, we are not yet seeing a sustained upturn, with market activity remaining fragile and unpredictable,” Chief Executive Officer Michael Spencer said in the statement. The “increased activity levels seen in January and February have not continued at the same rate in March,” the company said.
ICAP has been seeking ways to bolster earnings as the financial crisis hurt transactions on its foreign-exchange and fixed-income trading platforms. The company said it “remains on track” to achieve cost-cuts of at least 60 million pounds by the year-end.
Interdealer brokers such as ICAP act as a go-between for banks that trade bonds, stocks, currencies, energy and derivatives. They profit when prices fluctuate because more traders use the products they trade.
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