Icap feels the City's pain as profits take a nosedive

Further signs of the extent of the strife in the City emerged yesterday with some dire results from Icap.

The interdealer broker – it trades on behalf of big banks only – saw half-year profits slump 26 per cent to £137m.

With even the biggest investors reluctant to place bets while they await clarity from the eurozone confusion, trading revenues are down across the Square Mile and redundancies are high.

Michael Spencer, the chief executive and 16 per cent shareholder, said: "T his has been one of the toughest periods in my 36-year career in the wholesale financial markets. Trading volumes have fallen significantly across nearly all asset classes."

Mr Spencer, who also owns the spread-betting house City Index and is a significant benefactor to the Conservative party, had few words of comfort for the immediate future.

"I do not believe the negative environment will continue indefinitely, but equally I do not expect it to improve imminently," he said.

Icap warned that full-year earnings would be at the low end of the range of analyst forecasts. That sent Icap shares down more than 9 per cent, or 28.5p, to 281.4p.