Market Volatility Boosts TP Icap
Posted by Colin Lambert. Last updated: August 10, 2022
As might be expected with a broking-based business, TP Icap has released strong first half financial results thanks largely to the increased volatility seen in markets that has driven higher volumes.
The firm unveiled H1 revenue of £1.08 billion, up 12% from the same period in 2021, with global broking revenues increasing 8% with all asset classes contributing year-on-year. Brokerage head count was reduced by 5%, thus broking revenue per broker was up 14%.
Credit markets led the way in performance terms with a 15% increase to £61 million, however Rates remains the core of the firm’s broking operations, producing £286 million, a 10% increase from H1 2021. FX and money markets revenues grew 12% to £149 million.
Parameta Solutions, the firm’s data and analytics division, provided revenues of £91 million, up 11% year-on-year; while agency execution services earned £168 million, a 63% increase, helped largely by the firm’s acquisition of Liquidnet during the financial year.
TP Icap says it plans to extend the roll out of its Fusion platform, which launched in 2021 to cover Rates and FX to credit. The firm says that around 55% of its global broking revenue is in scope for Fusion and that work begins on the credit market roll out in 2023. The firm stresses that Fusion is delivering tangible benefits, revealing a Rates desk had a matching session in the first half encompassing more that 250 orders from more than 30 different traders. “This would not have been possible in the traditional voice market,” TP Icap states. “More broadly, in EMEA Rates, we saw a significant outperformance for Fusion conducted business compared to desks operating without this platform.”
The firm is also planning, subject to regulatory approval, to add its nascent digital assets business to Fusion. It says it is making “good progress”, and recently hired Tom Flanagan from 360T as head of platform trading for digital assets in New York. Trading will initially be in Bitcoin, with Ethereum to follow in Q3 and TP Icap stresses the platform will be used by institutional clients only. “Our partnership with custodians, including Fidelity Digital Assets, Zodia, BitGo and Komainu combines our market infrastructure expertise with their track record of protecting and storing assets, and settling trades,” it states. “We are also working closely with a range of market makers including Virtu Financial, Flow Traders, Jane Street, Susquehanna and Hudson River Trading. These combinations provide liquidity and peace of mind for clients as they extend their participation in this emerging asset class.
“For us, there may well be opportunities to broaden our entry into this asset class to the tokenisation of a number of financial and physical assets over time,” it adds.
Elsewhere, TP Icap is on track to launch its one-month Asian NDF platform, with a matching engine in London registered as a SEF, and an off-exchange market in Singapore.
“We have delivered high single digit revenue growth,” says Nicolas Breteau, CEO of TP Icap. “We have also grown revenue across all our asset classes and increased our market share. A strong performance from Rates, helped deliver an uplift in profitability.
“Volatility has continued across many markets,” he adds. “Our core franchise, the depth of our liquidity pools, and our ongoing focus on our transformation mean we are well positioned in these market conditions.”