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TP ICAP plc Uncertainty created by Brexit impacted traditional banking customers’ Q1 performance

TP ICAP plc (LON:TCAP)  issued a scheduled trading update in relation to the three month period from 1 January 2019 to 31 March 2019 ahead of its AGM to be held later today. Commentary on year on year performance is included at constant exchange rates unless otherwise stated.

Business Update

Revenue in the three months to March 2019 of £469m was 1% higher than the prior year on a reported basis and 2% lower at constant exchange rates. There was contrasting performance in the business divisions, with good growth in Energy & Commodities, Institutional Services and Data & Analytics, offset by Global Broking which was impacted by a weak market environment that saw sustained periods of lower volatility and volumes.

Global Broking saw a 6% reduction in revenues to £333m. This was primarily driven by lower volatility in Rates and Equities compared with the prior year, and particularly challenging market conditions in Credit and FX & Money Markets as well as weakness across European markets during the quarter.

Revenue in the Energy & Commodities division grew 7% to £93m, as the division benefitted from recent investments made in the business as well as improving market conditions in a number of products, particularly power and gas, in the Americas and APAC regions.

The Institutional Services division saw a 33% increase in revenues to £12m, with the business benefitting from increased hiring compared with the prior year as well as an increase in the number of new clients being onboarded.

The Data & Analytics division grew by 11% to £31m as it continues to benefit from the roll-out of new data sets as part of its organic growth strategy.

CEO’s Statement

Nicolas Breteau, TP ICAP CEO, said: “The uncertainty created by Brexit, the softening of the Fed’s interest rate stance, and the potential for more QE in the Eurozone has impacted our traditional banking customers’ Q1 performance, weighing on market volatility and volumes. I am pleased with the performance of our Energy & Commodities division and the strong growth in both our Institutional Services and Data and Analytics businesses.”

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