Broker TP ICAP prepares for no-deal Brexit with extra staff in Paris
* Underlying profit helped by global broking unit
* Relocating iSwap to Amsterdam
* Has not moved brokers out of London yet
* Spent 3 mln stg to be Brexit ready
(Adds CEO, CFO comments, shares, details)
By Noor Zainab Hussain and Tanishaa Nadkar
March 19 (Reuters) - TP ICAP is putting extra
broking staff into its European offices outside London to help
clients deal with any disruptions if Britain exits the trading
bloc without a deal.
But TP ICAP, which has picked Paris as its European Union
hub for when Britain leaves, said it had not yet moved any jobs.
And the London-based firm, the world's largest interdealer
broker, said on Tuesday as it reported results that it expects
Britain to remain a major centre for financial, energy and
commodities markets for the foreseeable future despite Brexit.
TP ICAP said its pretax profit rose by 5.2 percent on an
underlying basis to 245 million pounds ($325 million) in 2018,
helped by its global broking and institutional services as well
as data and analytics businesses.
Equity market volatility brought on by Brexit and the trade
war between Beijing and Washington also helped, with the CBOE
Volatility Index, also known as Wall Street's "fear
gauge", jumping 130 percent in 2018.
TP ICAP shares, which slumped 43 percent in 2018, were 6.6
percent higher at 323.7 pence at 1130 GMT, taking them to the
top of London's midcap index.
The broker, which is awaiting approval from French
regulators for its new Paris business, said it has created a new
Amsterdam iSwap euro unit for trading interest rate derivatives
electronically as part of its Brexit preparations.
Fifteen of the 16 main users wanted to move trading to the
Dutch financial capital, Nicolas Breteau, who took over as TP
ICAP's CEO in July, said.
This mirrors similar moves by several platforms that trade
stocks, bonds and derivatives to avoid disruption from Brexit.
Breteau said he has not yet decided whether the listings of
swaps in London should also move to Amsterdam, while declining
to comment on the volume traded in London that could be moved.
He said the firm had beefed up some functions in Paris but
had not yet moved brokers out of London, adding it could
potentially move jobs over the next year and a half.
Chief Financial Officer Robin Stewart said TP ICAP had spent
3 million pounds on putting a structure together for Brexit.
The firm, the product of a merger in 2016 between Tullett
Prebon and ICAP, also took a 65 million pound non-cash charge
relating to the value of its assets after the costs of Brexit
and the European Union's MiFID II reforms led it to warn on
profit last year.
($1 = 0.7539 pounds)
(Reporting by Noor Zainab Hussain and Tanishaa Nadkar in
Bengaluru and Huw Jones in London; Editing by Anil D'Silva,
Saumyadeb Chakrabarty and Alexander Smith)
First Published: 2019-03-19 09:19:05
Updated 2019-03-19 13:34:32
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