"Because banks in the UK have more money than they did... they've started lending what might have been mezzanine finance instead," said Tom Bartlam, managing director of ICG.
Despite the warning, which some analysts said could have been stronger given the increasing competition, the interim dividend is being lifted by 12 per cent to 4.8p.
While banks were lending aggressively in Britain, Mr Bartlam said ICG's business was gradually growing in continental Europe. An office has been opened in Paris and, said Mr Bartlam, "if anybody wants to get mezzanine finance in France, they come to us first".
ICG has helped finance several management buyouts in the UK this year, such as Great Western Trains and HMSO, although the number of new loans executed during the year was relatively low because deals were taking longer than anticipated to arrange.
But, in the second half, ICG said new lending had been strong. As a result, fee income should be "significantly higher" which would have a positive impact on core income.
Core income - net interest and dividend income and fee income minus operating expenses - was 11 per cent higher at pounds 5.6m at the half-way stage.
ICG also manages money for investors and has pounds 100m under management, an amount Mr Bartlam would like to see increase even though only two-thirds of that money has been placed by ICG so far.Reuse content