An extraordinarily tough year in the wholesale financial markets Michael Spencers words hit ICAP, the interdealer brokerage giant that he started in the 1980s, particularly hard. For the year ended March 31, the London-based firm reported declines of 12 percent in revenue, to £1.47 billion ($2.29 billion), and 20 percent in pretax profit, to £284 million. But if any capital markets CEO has placed a long-term strategic bet based on technology, scale and diversification, Spencer has, and his chips are still on the table. For more than a decade, he has been pushing e-brokering through acquisitions like foreign exchange platform EBS and innovative launches like i-Swap, a three-year-old joint venture with major banks for trading interest rate swaps. The 58-year-old also seeks to capitalize on demand for posttrade and risk mitigation services spurred by market-structure and regulatory changes. Although ICAPs electronic, posttrade risk and information businesses accounted for 66 percent of operating profit, up from 59 percent the previous year, sluggish over-the-counter trading and what Spencer termed in his May earnings commentary lack of clarity around some aspects of regulatory reform hurt those bottom lines. But, he noted, ICAP has cut costs, and we are a more efficient and collaborative business than we were a year ago.
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