The chief executive of London brokerage TP ICAP has left the company with immediate effect, as nearly 35 per cent was wiped from its share price in morning trading.
John Phizackerley is to be replaced by Nicolas Breteau, the head of the company’s global broking division.
The news comes after TP ICAP alerted investors that it was facing an extra £10 million in costs from security, regulations and Brexit fallout. These costs are expected to increase to £25 million next year.’
Out: John Phizackerley has been fired from TP ICAP
Chairman Rupert Robson said: ‘It has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process.
Tullet Prebon merged with ICAP Brokers in 2016 in a deal that was thought at the time to deliver savings from merging functions.
The cost of the merger, as well as the lowering of predicted savings has put pressure on the firm to make changes.
‘The company blames FX headwinds and increased broker compensation for undershooting profits expectations, but the profits warning itself was small fries compared to the announcement that the company was reducing its merger synergy targets from £100m to £75m by end of 2019,’ explained Artjom Hatsaturjants, research analyst at Accendo Markets
‘Brexit looms as another major cost centre for TP ICAP, with the company still saying precious little about potential plans to set up a Continental hub for its Europe-focused dealings (both TP and ICAP originally had their roots in London). Wherever TP ICAP decides to set up operations, it will have to negotiate with local regulators and spend more (on compliance, new hires and capex), further eroding any post-merger savings.’
The Financial Times reported that the company is in talks with European regulators in order to set up an EU base to oversee its European operations.
According to the paper it is in discussions with its customers about plans to open a Paris base in early 2019