ICAP reported financial metrics for the first half of its fiscal year ending March 2016, which revealed a 14 percent increase in revenues generated by its EBS business. Overall, the Electronic Markets business division, along with Post-Trade Risk and Information accounted for a combined 77 percent of the firm’s operating profits.
EBS ADVs up 15%
In its statement, the markets operator and provider of post-trade risk mitigation and information services said that its EBS business, the electronic foreign exchange trading platform, also registered a 7 percent annual increase in revenues on a constant currency basis. The figure stood at £64 million, compared with £56 million for the year-earlier period.
This was largely due to a 15 percent improvement in average daily volumes on an annual basis, which reached $94 billion in the six-month period ending on the 31st of September.
Market volatility in emerging markets boosted FX trading performance
ICAP went on to add that trading volumes in the most actively traded currency pairs, the G7 majors, were somewhat mixed due to lack of market volatility. The slack was picked up by emerging market currencies where the results were much better than for the first half of 2014/15, as macroeconomic factors boosted market volatility.
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The brokerage revealed that trading volumes for some Asian currencies marked an annual increase of nearly 100 percent over the first half of 2014/15, fitting in with the company’s expansion strategy for emerging markets.
The USD/CNH pair was the most popular pair among emerging market currencies, with trading volumes rising 110 percent on the year, making it one of the most actively traded pairs on EBS. This was a result of the the devaluation of the yuan, which also helped EBS grab more market share from its peers Thomson Reuters, BATS Hotspot and Bloomberg Tradebook.
Total Revenues Decline
ICAP’s total revenues for the six-month period stood at £595 million ($901 million), a decline of 4 percent on an annual basis. Trading operating profits came in at £110 million ($167 million), up 10 percent on the year. Pre-tax earnings stood at £83 million ($126 million), a whopping 131 percent annual increase.
Revenues from all electronic markets totaled £131 million ($199 million), up 7 percent on the year. The operating result from the division was £40 million ($61 million), down 2 percent. In Post-Trade Risk and Information, revenues came in at £119 million ($180 million), up 10 percent from a year ago. The operating profits in this segment totaled £45 million (68 million), up 7 percent from £42 million.
In Global Broking, revenues came in at £345 million ($523 million), down 12 percent from £390 million a year previously. The operating profits totaled £25 million ($37 million), up 47 percent from the £17 million booked for April-September 2014.
ICAP announced earlier today that it has reached a final agreement with Tullett Prebon for the sale of part of its Global Brokering business. As Finance Magnates reported, the deal, which will see ICAP’s voice brokering and information operations become part of Tullett Prebon, is worth over £1.1 billion, making it the biggest deal in the broking industry since the start of 2015.