Broker TP ICAP's shares plunge to lowest since Nov after first-half profit slide

By Aby Jose Koilparambil

(Reuters) - TP ICAP, the world's largest inter-dealer broker, reported on Tuesday a 35% plunge in half-year profit as trading in its global broking and energy and commodities businesses tailed off from highs seen during the height of the pandemic.

Shares of the firm slipped as much as 7.5% to 182.34 pence, their lowest level since November last year.

Trading-related firms across most asset classes have seen activity on their platforms fall from 2020 levels when the onset of the COVID-19 pandemic saw decades-high levels of market volatility globally.

TP ICAP, which brings together buyers and sellers in the financial, energy and commodity markets, said its adjusted pretax profit was 88 million pounds ($121.72 million) for the six months ended June 30, compared with 136 million pounds a year earlier.

"Secondary markets in the first half of 2021 continued to be uncommonly quiet," said Chief Executive Nicolas Breteau in a statement.

The company warned the strengthening of the British pound against the dollar and investment spending will mean a lower full-year operating margin than last year.

TP ICAP, which in March completed the $700 million purchase of institutional trading network Liquidnet, said activity could pick up again if clients rebalance their portfolios "in response to inflation".

Breteau told Reuters that the company had seen a big pickup in activity on its inflation desks and that that would continue for the rest of this year.

The company said it expects to launch its crypto trading platform for institutional investors in the fourth quarter, pending approval from the UK Financial Conduct Authority.

"We have seen a lot of demand from our dealer clients for a wholesale platform where they can transact in these instruments themselves. We already do with the futures side of the crypto world, and what we really need to add, based on demand from our clients, is the spot," Joanna Nader, head of strategy, told Reuters.

The firm said it expects to have "the required number of brokers" based in the European Union before the end of the year as it adjusts to Britain's exit from the bloc. In January it said it had to stop serving some EU clients because it did not have enough staff in its new Paris hub to meet French regulatory requirements.

($1 = 0.7230 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru and Rachel Armstrong; Editing by Sherry Jacob-Phillips, Lawrence White and Susan Fenton)