Money broker Icap today told investors a shakeup of its struggling cash equities operations was under way as it emerged that its chief executive, Michael Spencer, will step down as Conservative party treasurer in the autumn.
Spencer is expected to leave at around the time of the Tory party conference, after overseeing fundraising through the election and helping find a new treasurer.
Following speculation at the weekend that the world's largest interbroker might wind down, sell or find a partner for the struggling businesses, the company said a review would look at all the options.
"Icap confirms that the group is conducting a broad-ranging strategic review of some of its cash equities businesses. A further announcement will be made once the review is completed," the company said. A spokesman said the review would take two to three months.
The move comes a week after Icap issued a profit warning, partly due to the disappointing performance of its cash equity operations, which it has been expanding over the last two years. With new businesses in Brazil and shipping also taking longer than expected to become profitable and lower activity levels than last year, Icap said profits will be between £295m and £315m in the year to the end of March. This disappointed analysts, who had been looking for more than £330m.
Icap has blamed US president Barack Obama's planned crackdown on the banking sector for a fall in trading volumes. While Icap estimates that little more than 5% of its revenue is generated from banks using their own money to trade, market activity had slowed since the US plan to put a stop to such dealing was announced in January.
However, the profit warning, which wiped almost £80m off the value of the company, came only weeks after Spencer, the company's founder and chief executive, sold 8% of his total holding in the broker for £45m. If he had sold the shares after the profit warning, he would have received £15m less.
Despite reassurances from the company that Spencer only sold the shares on 11 January after consultation with the chairman and finance director and followed stock exchange rules, he faced calls from the Liberal Democrats to resign immediately as Conservative party treasurer.
The shares, which Spencer sold at 440p, were partly held in his own name and partly through a family trust, IPGL.
Icap shares slumped to 294p after the profit warning, but by yesterday had recovered slightly to 326p.