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London - Britain's Icap, the world's largest interdealer broker, reported a 4% fall in annual pretax profit on Wednesday, hit by the global investigation into the rigging of benchmark interest rates, deleveraging by banks and regulatory changes.
Profit in the year to March 31 was £272m, versus £284m a year earlier. That compared with analysts' average forecast for profit of £257.1m according to Thomson Reuters data.
Icap said revenue was £1.397bn, 5% lower than the year before.
Interdealer brokers, whose staff match buyers and sellers of currencies, bonds and other tradable instruments, have been hit hard in recent years, as new regulations led their traditional investment bank clients to cut back on risky trading activities such as fixed income, commodities and currencies.
Icap has also been hit by a global investigation into the manipulation of benchmark interest rates such as Libor. Last September US and British authorities fined Icap $87m and filed criminal charges against three former employees for rigging rates.
"Trading conditions have been and are likely to remain extremely difficult," said chief executive Michael Spencer.
"The trading operations of our bank customers, particularly their Ficc (fixed income, commodities and currencies) franchises, continue to be scaled back as balance sheets are de-levered in response to increased capital requirements."
However, Spencer said he was optimistic about Icap's drive to refocus on pre-trade, execution and post-trade services, and that the company could capitalise on a regulatory shift towards increased electronic trading of derivatives.
Icap proposed to keep its final dividend at 15.4 pence a share.
