Lower volatility hits TP ICAP's Q1 revenues

Revenues rose 1% to £469m on a reported basis and 2% lower at constant exchange rates, after global broking saw a 6% reduction in revenues to £333m due to lower volatility in rates and equities, weakness across European markets and particularly challenging market conditions in credit, forex and money markets.

Chief executive Nicolas Breteau said Brexit uncertainties, a softening of the US Federal Reserve's interest rate stance, and the potential for more quantitative easing in the Eurozone hit the company's banking customers, "weighing on market volatility and volumes".

Revenue in the energy and commodities division grew 7% to £93m, as it benefited from investments in the business as well as better market conditions in the Americas and Asia-Pacific regions, while the institutional services division saw a 33% increase in revenues to £12m, after an increase in new clients.

The the roll-out of new data sets helped the data & analytics division grow by 11% to £31m.

Analysts from Shore Capital acknowledged that the business has had to fight both structural and cyclical headwinds since the credit crisis, though added that 2018 had seen the easing of the cyclical aspect due to US rate rises.

"However, the curve has flattened again and we had also started to question exactly what constitutes good trading conditions for TP ICAP when it failed to report much of an improvement in the significant period of volatility seen in October 2018," said analysts.

TP ICAP's shares were down 0.45% at 273.18p at 0822 BST.