Interdealer broker ICAP has axed its integrated full-service agency cash equities offering in Europe and Asia following a strategic review of the business.
However, the company will retain its London-based execution-only cash equities business and continue to run its BlockCross pan-European non-displayed multilateral trading facility.
ICAP will also continue to develop the full-services equities business in Brazil and its equities execution business in the US.
Before the review, ICAP had been building up its full-service equities business globally and had hired around 212 people in the 18 months to November last year – 150 of which joined the Europe and Asia divisions. The company said its decision to discontinue the European and Asian full-service businesses would affect 114 staff.
“While a number of our cash equities businesses are performing well, the expansion into full-service agency cash equities in Europe and Asia has failed to match up to our expectations,” said Michael Spencer, CEO of ICAP, in a statement. “After a thorough review we have therefore decided to withdraw from the full-service offering.”
ICAP will take a pre-tax charge of £51 million in relation to closing the relevant elements of the cash equities business, which will be treated as an exceptional item in the broker’s financial statements for the year ending 31 March 2010.
New business lines, which include ICAP’s full-service cash equities operations, made an operating loss of £7 million in the six months ended 30 September 2009.