TP ICAP shares plummeted by more than 30% after the interdealer broker announced the departure of chief executive John Phizackerley and increased costs as a result of Brexit and new regulation.
Phizackerley has left the firm with immediate effect and is to be replaced by Nicolas Breteau, who currently heads up TP ICAP’s global broking business, subject to approval by the Financial Conduct Authority.
TP ICAP, which rebranded from Tullett Prebon following its acquisition of ICAP for $1.6 billion in December 2016, detailed that its underlying operating profit would be impacted by “ongoing cost headwinds of around £10 million, relating to Brexit, MIFID II, regulatory and legal costs and IT security”.
As a result, the broker has revised its cost saving target from £100 million to £75 million annually by the end of 2019.
TP ICAP chairman, Rupert Robson, pointed to increased costs as a result of the “evolving landscape” caused by the UK’s planned departure from the European Union, as well as new regulatory pressures following the introduction of MiFID II.
“The acquisition of ICAP has given us greater scale to withstand this pressure,” said Robson. “The potential for these combined businesses remains extremely compelling and this will be evidenced in the coming years. However, it has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process.”