TP ICAP reports higher revenue for 2021, but net profit disappoints

abdelaziz Fathi

TP ICAP Plc, the world’s largest interdealer broker, reported an 8 percent increase in 2021 revenue, to £1.9 billion from £1.8 billion a year earlier.

TP ICAP

The revenue increase came despite an extremely volatile market last year due to the COVID-19 pandemic. Trading activity this year had returned to normal levels and was in line with the group’s forecasts, the company said.

The London-listed interdealer brokerage, however, posted an adjusted EBIT of £233 million, 9 percent lower than the prior year’s figure of £256 million. It also reported a pretax profit of £24 million compared with £129 million for 2020, citing significant expenses to fund disposals, acquisitions, restructuring and other related costs.

TP ICAP stuck to its full-year forecast of single-digit growth in revenue, excluding results for Liquidnet, an institutional trading and equities network that TP ICAP acquired last year. Liquidnet post-acquisition revenue was reported at £159 million, 6 percent lower form a year earlier, citing lower global equity market volumes in US, Europe and Asia.

Commenting on the results, Nicolas Breteau, CEO of TP ICAP Group plc, said: “Our performance naturally reflects the unusually quiet secondary markets that we experienced in 2021, particularly in the first half of the year. However, as market conditions started to improve in the second half, TP ICAP recovered most of the ground and grew overall market share. We continued to deliver double-digit revenue growth in Data & Analytics.”

TP ICAP, which earns its bread from making markets in different asset classes, employs thousands of brokers who negotiate trades in markets such as FX and commodities. The company’s broking customer base comprises mainly larger dealers, whereas exchange-traded volume reflects a more diverse participant mix.

TP ICAP was formed five years ago following Tullett Prebon’s acquisition of the voice-broking business from its former rival interdealer broker ICAP. TP ICAP’s data and analytics division is a provider of real-time price information from the global OTC financial and commodity markets, covering data from the wholesale inter-dealer brokered financial markets.

Most recently, TP ICAP launched its first roster of cryptocurrency exchange-traded products (ETPs) with fresh digital asset exposures to its European clients. The expansion of TP ICAP’s crypto offering is intended to appeal to a wider range of investors and comes at a time when interest in cryptocurrencies is growing.

“We took pre-emptive action to mitigate margin pressure, including greater operational efficiency, and delivered significant overall cost savings of £31 million. These measures helped to partly offset the impact of market conditions which shifted activity to lower margin asset classes within Global Broking. We are targeting a further £38m of incremental savings from 2022 to 2024,” the company’s statement further reads.

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