Bank recapitalisation & deleveraging, uncertainty over regulatory reform and even the London Olympics were cited by ICAP boss Michael Spencer as reasons for the inter-dealer broker's interim revenues and profits declining.
Headline profit before tax in the six months to the end of September fell 26% to £137m from £186m the year before, while statutory profit before tax halved to £50m from £101m. The statutory profit figure includes acquisition & disposal costs and other exceptional items.
Revenue fell 14% to £746m from £867m at the half-way point in 2011, in what the group's Chief Executive Officer, Michael Spencer, described as one of the toughest periods in his 36 year career in the wholesale financial markets.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"Trading volumes this year have fallen significantly across nearly all asset classes and geographies whether equities, futures, FX [foreign exchange], commodities, fixed income and also OTC [over the counter]," Spencer said, before listing a number of reasons for this, including global economic weakness, the continuing Eurozone crisis, quantitative easing and low interest rates.
"I do not believe this negative environment will continue indefinitely but equally I do not expect it to improve imminently. It has been a time to weather a hard storm and prepare thoroughly for financial regulatory reform," he declared.
The interim dividend has been bumped up by 10% to 6.6p.
JH
-
Which investment trusts could benefit from lower interest rates?As vehicles for long-term investments, many investment trusts were hit when interest rates rose in 2022. With interest rates expected to fall by the end of the year, could now be the time to invest in one of these unloved sectors?
-
How to protect your personal and financial data from cyber attacksM&S and the Co-op are the latest retailers to suffer from cyber hacks but consumers also need to be vigilant
