ICAP third quarter revenues dip on difficult market conditions

ICAP’s third quarter revenues have dipped due to a drop in revenue from its electronic markets division.

The FTSE 250 markets operator and post trade risk mitigation and information service provider issued a trading update for the three months to 31 December 2015 on Tuesday.

Group revenues fell 5% compared to the previous year on both a constant currency and reported basis.

Revenue in its electronic markets division decreased by 10% on a constant currency basis (7% on a reported basis) as average daily volumes in US Treasuries on the BrokerTec platform fell 11% to $147bn against “demanding” comparables.

EBS average daily volumes also decreased by 35% to $78bn.

Global Broking revenues also fell 7% due to ongoing structural and cyclical factors including further deleveraging by investment banks.

However, revenue from the post trade risk and information division rose 8%, driven by continued demand for TriOptima's compression and reconciliation services.

Chief executive Michael Spencer said the business continues to perform well especially against difficult market conditions.

“The decision by the Fed to raise interest rates was very welcome, but we are still operating in an environment of ultra-low interest rates and we have some way to go before we return to more normal market conditions.

“Risk appetite remains subdued and I see few signs that this will pick up any time soon, even after markets began the year with a short burst of extreme volatility.”

ICAP also said the disposal of its global hybrid voice broking and information business to Tullett Prebon is on track and should be completed this year.