IAP.L Regulatory News (IAP)

ICAP plc Interim Management Statement

- Double digit revenue growth in the Post Trade Risk and Information division

- Record volumes on EBS Direct and US Dollar i-Swap

- Tough market conditions continue to impact trading activity in Global Broking and EBS Market

- Cost savings programme remains on track to deliver annualised savings of £60m

London, 16 July 2014 - ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, is issuing this Interim Management Statement in relation to the period from 1 April 2014 to 15 July 2014. It will be delivered to shareholders attending ICAP's Annual General Meeting today.

Group revenue for the quarter was 14% behind the same period last year on a constant currency basis (19% on a reported basis). Management continues to focus on enhancing the efficiency and cost effectiveness of the organisation.

Double digit revenue growth achieved by the Post Trade Risk and Information division in the first quarter demonstrated the positive return from the ongoing investment in the business to meet its customers' changing needs in the new regulatory environment. Unprecedented demand for TriOptima's compression (triReduce) and portfolio reconciliation (triResolve) services together with an encouraging upturn in activity on Reset were the primary drivers of revenue growth during the period.

Combined average daily electronic volumes for the BrokerTec and EBS platforms in the first quarter were $707 billion, a decrease of 10% on the previous year. Activity levels on EBS Market remains muted reflecting multi-year lows in volatility in EBS's major currency pairs and continued internalisation of bank flow. The comparative prior year volumes reflected exceptional levels of trading activity on both platforms caused by external stimuli; specifically increased speculation around the future of quantitative easing (BrokerTec) and change in Japanese monetary policy (EBS).

Average daily volume on EBS Direct, the relationship-based disclosed liquidity service, continued to grow during the period, averaging $11 billion per day in June, including a record single day high of $13 billion. EBS Direct continues to generate new incremental revenue for the Group, with more than one third of the volume transacted on platform in sterling, Canadian dollars and Australian dollars, currencies in which EBS has historically not been a primary trading venue.

In June, both the number of trades (557) and the notional value ($25 billion) of US Dollar interest rate swaps (USD IRS) transacted on i-Swap, the electronic arm of the ICAP SEF, achieved record highs. The number of electronic trades represented 31% of all USD IRS trades via ICAP, up from 23% in May and 2% in January. During the period, i-Swap on-boarded additional new customers and saw an increase in market share.

The trading performance of the Global Broking division (which contributes less than 30% of total Group profits) continues to be adversely impacted by a combination of both structural and cyclical factors including bank deleveraging, ongoing regulatory uncertainty and lack of interest rate and FX volatility. These factors represent a significant drag on trading activity as evidenced by the continuing decline in the reported FICC revenues of the major dealer banks. Against the backdrop of challenging market conditions, Global Broking revenue declined by 19% on a constant currency basis (25% on a reported basis). The Group remains focused on protecting the division's ongoing profitability.

The cost savings programme remains on track to deliver the annualised target of at least £60 million for the current year. Since announcing FY results in mid-May, over £28 million of annualised cost savings have been identified partly through a reduction in broker headcount, the one-off costs of which will be treated as an exceptional item. These savings are in addition to the £125 million of cost savings delivered over the past three years.

Michael Spencer, Group Chief Executive Officer of ICAP said:

"Our post trade businesses are growing strongly, supported by accelerating demand for risk reduction services. During the quarter we have made further progress with our growth initiatives. Volumes on EBS Direct and on i-Swap in US dollar reached new highs, in addition to a record number of compressions within triReduce and further expansion of triResolve's customer base.

"In Global Broking, conditions are still very difficult, and we continue to mitigate these challenges by increasing the flexibility of our operating model, focusing on priorities and delivering cost efficiencies. The Group is in the process of progressing a number of multi-year structural projects to enhance the efficiency and cost effectiveness of the organisation which will result in a more efficient corporate structure and more variability in its cost base. These will enable ICAP to continue to invest in products and services to drive future growth across the Group."

Ends

Investors & Analysts Conference Call:

This will be hosted by Michael Spencer at 08:00am on Wednesday 16 July 2014:Dial in number: +44 (0)20 3003 2666Access Code: ICAPA recording of this call will be available at www.icap.com

Contacts

Serra Balls Group Head of Communications +44 (0) 20 7050 7103

Alex Dee Head of Investor Relations +44 (0) 20 7050 7123

Notes:

The closing exchange rates at 30 June 2014 were $1.71/£ and €1.25/£. The average exchange rates for the three months ending 30 June were $1.69/£ and €1.23/£.

If the closing rates remain constant for the rest of FY2014/15 then the average exchange rates for FY2014/15 would be $1.70/£ (FY2013/14: $1.59/£) and €1.24/£ (FY2013/14: €1.19/£). The estimated year-on-year impact on FY2014/15 is £21m operating profit reduction from translational and transactional exposures.

Each 1 cent change in US dollar and euro average exchange rates would impact operating profit by £2m and £1m respectively. For FY2014/15, current hedges represent hedged 74% of $/£ and 78% of €/£ forecast transactional exposures.

About ICAP ICAP is a leading markets operator and provider of post trade risk mitigation and information services. The Group matches buyers and sellers in the wholesale markets in interest rates, credit, commodities, FX, emerging markets and equity derivatives through voice and electronic networks. Through our post trade risk and information services we help our customers manage and mitigate risks in their portfolios. For more information, please go to www.icap.com.