ICAP’s revenue for the first half of the financial year dropped by 14% compared to 2013, however the interdealer broker’s CEO has seen signs of a resurgence in recent weeks.
In a tough year for European IDBs, low interest rates and market volatility have hampered market activity, and subsequently their revenues during 2014.
During October though, many participants suggested the markets had turned a corner with volatility returning, backed by comments from ICAP’s chief executive Michael Spencer.
“Our first half results reflect a market environment that has remained relatively fragile; despite this, we are cautiously optimistic that we have started to see some welcome signs of activity and more positive sentiment returning in recent weeks,” he said.
“Having experienced multi-year lows over the past year, FX volatility recovered in September and continued into October with EBS recording its highest trading day in three years on 31 October with traded spot volume of US$250 billion.
“Meanwhile, in October BrokerTec had record single day US Treasury volumes of US$471 billion.”
Once again, ICAP’s post-trade business saw growth as participants are under increasing pressure through regulations to comply with new rules around reporting and compression.
TriOptima posted a 46% increase in its revenue, while the entire post-trade division grew 12% to £108m.
“We continue to deliver both new and enhanced product and technology solutions which are now producing strong results: TriResolve has nearly doubled its number of subscriber firms compared to a year ago,” added Spencer.
Other segments of ICAP’s post-trade offerings are coming under threat from incoming MiFID II regulations, as reported by theTRADEnews.com in October.
This includes the group’s TriOptima and Reset services, however TriResolve will be unaffected. Read more by clicking here.