Icap profits up on electronic boom

UK interdealer broker Icap reported rising revenues and profits this morning, after a successful year for its growing electronic broking business.

Revenue was up 13% to £919 million, and pre-tax profit rose 16% to £204 million, the company said. Following investment in the electronic broking business, operating profit for electronic broking rose to a record 30%.

Chief executive Michael Spencer said the company would further expand its electronic arm: "We will continue to further extend our electronic broking business into an increasing number of markets with highly liquid, commoditised products and grow our voice-broking business into more structured products," said Spencer.

Icap expects growth in particular in FX, energy, credit and equity derivatives, and in emerging markets and structured products generally. Electronic broking would mean lower transaction costs and more efficient trading, which would also drive additional growth in more commoditised markets.

Icap also announced a management shakeup. In April, the broker agreed the takeover of the currency broker EBS for $775 million. After the merger, Icap said, Icap's and EBS' electronic broking arms will be merged under Jack Jeffery, at present chief executive of EBS; his deputy will be David Rutter, now chief executive of Icap Electronic Broking in North America. The integration will be overseen by executive director Steve McDermott.

Icap said its estimated market share is 28-29%. Its goal is to have at least 35% of the market, the company said.