TP Icap Revenues Hit by Trading Slowdown

The comparative slowdown in trading, compared to the first half of 2020, which was fuelled by the outbreak of the pandemic, has been felt by inter-dealer and market structure firm TP Icap, which has seen a 5.5% decline in revenues for H1 2021 at £936 million, and a 35.3% decline in profits to £88 million.

The group blamed a combination of quiet secondary markets compared to 2020, and the ongoing disruption caused by the pandemic – namely that many clients continue to work from home with reduced risk limits. The upside of this is the firm seeing its electronic platforms gain more traction, “This further underlines the importance of our strategy to aggregate our liquidity, electronify our business and diversify our revenue streams,” it says.

Subdued market volumes saw the Global Broking division – the company’s biggest – report revenues of £575 million, down 7% in constant currency terms and 11% in reported terms. Rates (-18% on reported terms) and Credit (-14%) both saw declines, while equities actually rose by 11% to £117 million. FX and money markets revenue was down 12% at £86 million, while emerging markets was down 11% at £92 million,

The firm says that its recently launched FX benchmark matching platform, launched in June, “has a significant number of large banks onboarded and using the platform”.

Energy and commodities revenues were down 9% to £187 million, the firm says it remains “well-positioned” to capture the benefits of the transformation to a less carbon-intensive world, with its revenues from “positive, transitional or neutral” products steady in H1 and responsible for about 40% of the energy and commodities business revenue stream.

After buying Liquidnet earlier this year, the business contributed £55 million to the overall revenue stream, this led to an 84% increase in agency execution revenues to £103 million, however taking out Liquidnet, revenues decline by 14%.

The firm’s Parameta Solutions business saw revenues dip very slightly by less than 1% at £82 million – data and analytics grew by 3% to £72 million, while post-trade services fell sharply by 23% to £10 million.