TP ICAP Commodity Brokers Save Company From a Dire Quarter

(Bloomberg) -- The world’s biggest interdealer broker was bailed out in its first quarter by the businesses that it hopes will secure the company’s future.

TP ICAP Plc’s bad quarter in its main broking business was offset by a 7% revenue increase in its energy and commodity operations, while its institutional services division, which matches trades for hedge funds, grew sales by 33%. Lower volatility and hence smaller volumes in rates and equities pulled revenue in global broking down 6% to 333 million pounds ($430 million).

“The uncertainty created by Brexit, the softening of the Fed’s interest-rate stance, and the potential for more quantitative easing in the eurozone has impacted our traditional banking customers’ first-quarter performance, weighing on market volatility and volumes,” Nicolas Breteau, TP ICAP’s CEO, said in the company’s statement.

TP ICAP’s overall revenue climbed 1% to 469 million pounds. The company’s shares fell 1% to 271.7 pence at 9:35 a.m. in London.

Breteau is seeking to revive the company’s fortunes after a profit warning last summer wiped more than a billion dollars from its market value. The energy and commodities arm, which deals with the world’s biggest oil producers as well as banks, and the institutional services division are key elements of Breteau’s plan to reduce its reliance on the banks.

London-based TC ICAP is the world’s biggest employer of voice brokers -- people who match complex trades between banks -- with 2,727 in 2018, according to its annual report.

©2019 Bloomberg L.P.