TP ICAP’s Q3 revenue rises 5% despite weak broking business
TP ICAP, the world’s largest inter-dealer broker, has announced a 5% increase in third-quarter revenue. The rise was largely fueled by a robust performance in its energy and commodities division, which helped balance the weaker results in its broking business.
After a challenging 2022 marked by geopolitical uncertainties and reduced trading volumes, energy markets have stabilized. The energy and commodities division of TP ICAP reported a notable 28% revenue growth for the three months ending September 30.
The total group revenue for the quarter stood at 512 million pounds ($622.13 million), with the company stating that its trading performance aligned with expectations for the year.
TP ICAP, which facilitates brokerage between institutional clients across commodities, shares, currencies, interest rate swaps, and bonds, often benefits from market volatility. However, the exceptional volatility-driven trading volumes witnessed last year cooled off in 2023, impacting TP ICAP’s Global Broking business. For the third quarter, spanning July 1 to September 30, this division saw a 2% decline in revenue for the quarter, when considering constant currency.
Overall, the group’s total revenue was up by 2%, reaching £1,644 million. This increase was partly due to favorable conditions in the energy market, where the Energy & Commodities (E&C) division capitalized on its leading market position. Despite the decline in Global Broking revenue, the E&C division saw a 16% revenue increase across various asset classes.
Liquidnet division, however, experienced a 3% decrease in revenue. Despite a strong performance in the Relative Value business, Equities declined in line with subdued block market activity. However, Liquidnet’s Dealer-to-Client Credit proposition showed progress. Parameta Solutions, another division of TP ICAP, reported a revenue increase of 5%.
The London-listed interdealer brokerage also expressed confidence in its future business, noting the expectation of higher interest rates throughout the year and the moderating effect of the recent strong US Dollar.
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.
