Read Icap's trading statement in full

Icap is expecting to reap more benefits from the "continuing disruption" across the global financial markets, as the world's largest interdealer broker said today that its full year pre-tax profits would reach the upper end of City forecasts.

Pre-tax profits at the group, which brokers bonds, derivatives and other financial instrument between banks and financial institutions, are forecast to reach between £289 million and £305 million for the year. This compares with £251.6 million last year.

Icap said that interim results were "anticipated to be at the upper end of analysts' current forecasts". Shares fell 2.91 per cent to 517.5p in early trading.

Daniel Garrod, analyst at Citi, noted that the shares have risen 17 per cent in the past month and a half. He has already pencilled in profits of £300 million. Mr Garrod has a price target of £6.10 on Icap and said he continued to believe the shares were undervalued.

Michael Spencer, Icap's chief executive and the Conservative Party treasurer, said: "A steeper yield curve, the higher price of credit risk and continuing disruption in the money markets suggest that this period of increased activity will continue for some time, though not necessarily at the very high levels of the last few months."

The company said that it had experienced record volumes of trading during the last six months, and said that its voice broking volumes had made strong gains, especially in interest rate derivatives, in the credit markets and in energy.

Icap's electronic broking business also thrived, with average daily foreign exchange volumes reaching $209 million (£103 million), a 54 per cent increase on last year.

Icap also boasted that it had completed the first derivative transaction based on the US Residential Property Index during the period.

Icap emerged early last month as one of the big winners of international market volatility, which boosts trading volumes in safe-haven investments such as Treasuries and Gilts. It also drives activity in hedging instruments such as derivatives and interest rate swaps.

On August 16, at the height of the market ferocity, Icap's fixed income trading platform traded a record $819 billion of securities. During the month, average daily volumes in fixed income reached $703 billion, some 42 per cent higher than August last year.

Icap joins stock exchanges and some specialist fund managers as beneficiaries of the credit crisis. The London Stock Exchange said last month that trading volumes on its SETS system had hit records.

Man Group, the world's largest hedge fund manager, also benefited, alongside investment houses such as Aberdeen Asset Managent that avoided sub-prime mortgages.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax