Brokerage ICAP posted core profit down by a quarter in the first half and its chief Michael Spencer warned he saw no immediate improvement in poor market conditions.
“I do not believe the negative environment will continue indefinitely but equally I do not expect it to improve imminently,” Mr Spencer said, as ICAP warned full-year earnings would be at the low end of the range of analyst forecasts.
Brokerages such as ICAP and rival Tullett Prebon make money by matching buyers and sellers of bonds, currencies and swaps, but they have been hit by a drop in trading activity as investment banks cut back in the financial crisis.
“This has been one of the toughest periods in my 36 -year career in the wholesale financial markets,” Mr Spencer said. “Trading volumes this year have fallen significantly across nearly all asset classes.”
ICAP posted a 25 per cent drop in operating profit to £144m in the six months through September on revenue down 14 per cent at £746m.
The group also said profits for the year to end of March 2013 would be at the lower end of the analyst range of £300m to £332m. And some said the group may still struggle to match that expectation.
“It is going to take a strong pick-up at the start of next year for them to meet their profit guidance at the lower end of the analyst range,” said Richard Perrott, an analyst at Berenberg Bank.
ICAP pledged drastic cost cuts in June this year and said yesterday this plan was progressing well.