February 7, 2013 / 7:14 AM / 7 years ago

UK broker ICAP starts 2013 on trading high

LONDON (Reuters) - ICAP IAP.L, the world’s largest broker, lifted trading levels at the start of the year after a dip at the end of 2012 and forecast annual profit in line with expectations, giving a boost to a company under investigation over Libor fixing.

London-based ICAP said on Thursday its foreign exchange trading last month was up 22 percent from January 2012 while bond trading rose 16 percent.

In the three months to the end of December, currency and bond trading fell 9 percent to a daily average of $664 billion (423.6 billion pounds).

The broker, which acts as an electronic intermediary between the world’s largest investment banks, said it expected pre-tax profit for the year to March 31, 2013 to be within the current analyst range of 280 million to 305 million pounds.

“While December was even slower than expected, we’ve seen a marked improvement in trading volumes since the beginning of January across our entire business, although it is premature to tell if this is the start of a more sustained upturn,” said ICAP Chief Executive Michael Spencer.

ICAP also said a cost reduction programme was progressing well and would deliver 50 million pounds of savings in this financial year and another 60 million pounds by the end of 2013.

Shares in the company were down 2 percent to 349.1 pence at 0815 GMT having traded up about 6 percent this week from 326 pence a share on Monday.

ICAP said two weeks ago one of its subsidiaries was under investigation by the Financial Services Authority in connection with the fixing of interest rates.

Royal Bank of Scotland (RBS.L) was fined $612 million by U.S. and British authorities on Wednesday to settle allegations it manipulated benchmark interest rates.

Switzerland’s UBS AG UBSN.VX agreed in December to pay penalties of $1.5 billion and Britain’s Barclays (BARC.L) paid regulators $453 million in fines last summer.

More than a dozen banks and brokerages, including JP Morgan (JPM.N), Deutsche Bank AG (DBKGn.DE) and Citigroup (C.N), are being probed by regulators over the manipulation of rates such as the London interbank offered rate, known as Libor, which is used to price trillions of dollars of loans.

ICAP does not contribute to the Libor setting process but regulators have called into question the role that individual brokers, at ICAP and rival firms, may have played as conduits to manipulation by traders working at investment banks.

Editing by Tom Pfeiffer

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