ICAP’s Sales From Electronic Markets Drop Despite Brexit Spike

Updated on
  • EBS average daily volume declines 15% to $83 billion
  • ICAP plans to complete sale of broking business this year

ICAP Plc, soon to be named NEX Group Plc, said revenue from electronic markets declined 2 percent as the boost from Brexit-induced trading failed to outweigh headwinds from low interest rates and bank deleveraging.

Average daily volume on ICAP’s EBS currency-trading platform fell 15 percent to $83 billion in the period from April 1 to June 30, according to a statement Wednesday. Volume on the venue jumped to $200 billion on June 24, following the U.K.’s decision to leave the European Union. ICAP’s sales from post-trade risk management services rose 6 percent on a constant currency basis.

The company’s overall revenue increased 2 percent compared with a year earlier.

“Prior to the U.K. referendum, we were looking towards a long and slow journey on the road to more normal market conditions following the decision by the Fed to raise interest rates back in December,” Spencer said in the statement. “This journey looks more uncertain now although the subsequent decline in sterling in the FX markets does provide us with a significant windfall benefit.”

ICAP will focus on electronic markets and post-trade services once it completes the sale of its voice-broking business to Tullett Prebon Plc later this year. The 1.1 billion-pound ($1.4 billion) deal includes the sale of ICAP’s name. The transaction will give Tullett more than 3,000 voice brokers, leaving ICAP Chief Executive Officer Michael Spencer in charge of a collection of electronic businesses.