Post trade revenues declined 13% as a result of the expected reduction in interest on margin held in the clearing business from the unusually high levels last year.
A 9% decline in Q3 revenues mainly reflects the decline in UK cash equities trading levels and lower tariffs within the capital markets segment, together with a reduction in clearing revenues due to lower interest spreads on margins held compared to the unusually high levels in the same period last year.
According to Fidessa Fragmentation Index, an industry barometer, growing competition from new entrants such as BATS Europe and Chi-X have pushed LSE’s fees down and at the same time its share of FTSE 100 trading declined to 62% from 76% over the past one year.
However, there were good performances in primary markets operations and fixed income trading and the Information & Technology Services segment was resilient with the inclusion of revenues from MillenniumIT for the first time following completion of the acquisition in October 2009.
Xavier Rolet, CEO, said: “Market conditions have not been easy in the last quarter, particularly in cash equities, though the group has benefitted from the breadth of its activities, with good performances in primary markets and fixed income trading, and the Information & Technology Services division has also proven resilient.
“Market conditions are expected to remain testing in the current quarter. We continue to focus on improving the shape of the business, with actions clearly underway to reduce underlying operational costs, and improve business efficiency and our competitive position. The agreement to acquire Turquoise and the acquisition of MillenniumIT are good steps to enhancing our trading offering. We continue to work on ways to leverage the assets and develop opportunities across the Group to provide a platform for growth further ahead.”
