ICAP posted a 31% rise in annual pretax profit on Tuesday thanks to greater market volatility and said its was eyeing acquisitions.
“The current environment offers many attractive opportunities to acquire businesses,” Chief Executive Officer Michael Spencer says. “ICAP is well placed to make further acquisitions and fund the development of the group using its existing financial capacity.”
Spencer said the world’s top five interdealer brokers were unlikely to merge, but the firm has been engaged with discussions with several of the bank consortium interdealer projects. “But we’ve not got involved in any of them,” he added.
Eight banks including Morgan Stanley and UBS are investing in an interdealer business to offer over-the-counter interest rate and credit derivatives services. JP Morgan, Deutsche Bank and Goldman Sachs are also considering an electronic interdealer project.
Spencer said contributions from acquisitions made over the past three years accounted for one-fifth of ICAP’s revenue. ICAP had net cash of 365 million at 31 March, up 22%.
The London-based firm, which bought equity derivatives firm Link Asset and Securities in April, said pretax profit before amortisation and exceptionals rose to 330.2 million ($645.9 million) in the year to March from 251.6 million the previous year.
The result was above a consensus forecast of 320.7 million from 12 analysts.
ICAP, which offers voice and electronic broking services on rates, currencies and equities, has benefited from the global financial crisis as it takes a cut on every trade made through its systems amid booming trading volumes.