(Reuters) - ICAP (LON:IAP) Plc, which matches buyers and sellers of bonds, swaps and currencies, said first-half trading pretax profit fell 7 percent, hurt mainly by a rise in net finance costs.
ICAP's trading performance was also hurt by historically low and negative interest rates, low levels of volatility and bank deleveraging, resulting in reduced risk appetite from bank customers, the company in a statement on Wednesday.
Britain's central bank said this month that interest rates could now move up or down, scrapping a definite plan to cut them, while the U.S. Federal Reserve set the stage for an interest rate hike in December.
"These are uncertain times for global financial markets as we try to understand the impact of both the Brexit vote and the very recent U.S. election," CEO Michael Spencer said.
ICAP said on Wednesday that the U.S. election had driven an increase in trading activity.
"It is, however, too early to assume that the prolonged period in which we have experienced subdued market conditions has come to an end," the company added.
ICAP, which has agreed to merge its global hybrid voice broking business with Tullett Prebon Plc (LON:TLPR), said continuing trading pretax profit was 51 million pounds ($63 million) for the six months ended Sept. 30, compared with 55 million pounds a year earlier.
Net finance costs rose 3 million pounds in the period, reflecting increased drawdowns on the revolving credit facility and an increase in the Japanese yen loan, the company said.
ICAP's continuing revenue rose 11 percent to 254 million pounds on a reported basis, and was unchanged on a constant-currency basis.
Electronic markets revenue fall 2 percent on a constant-currency basis and rose 8 percent on a reported basis to 139 million pounds, as a result of its dollar exposure, ICAP said.
Revenue from EBS - the main venue for banks and other major institutions to trade the euro, yen and Swiss franc against the dollar - fell 10 percent on a constant-currency basis and was flat on a reported basis at 64 million pounds.
Average daily volume fell 14 percent to $81 billion.
ICAP'S shares were down more than 3 percent at 515 pence at 0830 GMT on the London Stock Exchange.
($1 = 0.8006 pounds)
