Broker TP Icap finds it tough as low interest rates hit the banks

Steady and low interest rates might be good for homeowners, but they are a blow to the traders at TP Icap.

The interdealer broker was hit by low volatility in bond and interest rate markets over the past six months, which saw its major clients, the investment banks, cut trading.

It made a profit of £134 million, down by £5 million on a year ago.

Cost savings from the merger of TP and Icap two years ago are £1 million shy of the £75 million promised, but not for long, says chief executive Nicolas Breteau.

“We have delivered a resilient performance and maintained our operating margins despite a decline in trading amongst the investment banks and additional costs driven by increasing regulation and Brexit,” he added.

TP Icap said revenue at its biggest business, global broking, slumped 6% to £648 million due to a decrease in revenue across all asset classes.

Breteau replaced former Lehman Brothers banker John Phizackerley as chief executive.

Analysts say the merger of Icap with TP has proved tougher than expected.

Breteau says the company is in the final six months of the integration programme.

An interim dividend of 5.6p will be paid.