UK-based institutional brokerage and market operator ICAP said on Tuesday its consolidated revenue, both on a constant currency and on a reported basis, went down by 5% on the year in October-November 2015, or the thirds quarter of fiscal year (FY) 2016, ending 31 March this year. The company provided no figures.
The broker operates in three divisions – electronic markets, global broking, and post trade risk and information.
Revenue from continuing global broking businesses decreased by an annual 7% on a constant currency basis and on a reported basis during the third quarter of the fiscal year. ICAP’s Post Trade division, on the other hand, posted an increase of 8% on the year on a constant currency basis and on a reported basis, driven by strong demand for TriOptima, on of the group’s post-trade services.
Revenues from electronic operations posted a decline of 10% on a constant currency basis and of 7% on a reported basis in the October-December period. The markets in Asia Pacific and the Americas saw a strong revenue growth from electronic matching sessions in the period under review.
ICAP’s online forex trading via the EBS BrokerTec platform had an average daily trading volume of $78 billion in the third quarter of FY 2016, which represents a decrease of 35% on the year. Average daily volumes in US Treasuries via the platform fell 115 on the year to $147 billion in October-December. In US repo, the trading volume averaged $219 billion per business day in the quarter, while in European repo, the volume was €168 billion.
In December, ICAP launches a beta version of the EBS Direct service for forex outrights and swaps, which is a major part of the forex market to which EBS clients previously had no access.
Overall, the group performed well, despite the challenging market conditions globally.
“Against the backdrop of a difficult market, our business continues to perform well, particularly the Post Trade division which goes from strength to strength,” ICAP group CEO Michael Spencer said.
Investors seem cautious and with subdued appetite since they deleverage their balance sheets. However, even though markets were extremely volatile in the beginning of 2016, things seem to be picking up.
Meanwhile, ICAP also said the deal for the merger of its global hybrid voice broking and information business with Tullett Prebon goest as planned and is expected to be completed in 2016. Both companies are in the process of acquiring regulatory nod for the deal.
ICAP and Tullett Prebon entered in November 2015 announced their agreement yunder which Tullett Prebon would acquire ICAP’s Global Broking business, including ICAP’s associated technology and broking platforms, its associated information services businesses, and certain joint ventures and associates. ICAP would, on its turn, receive new shares in Tullett Prebon issued as consideration.
“The transaction to combine our global hybrid voice broking business with Tullett Prebon is proceeding well, and marks a defining moment in the transformation of the Group into a financial technology business,” Spencer said. “We have laid the foundations for our electronic and post trade businesses to deliver strong, cash generative returns for the future,” he added.