TP ICAP said business had picked up as it reported annual profit below market expectations amid low market volatility, which the interdealer relies on for client business.

Underlying pre-tax profit for the year to the end of December was little changed at £233m from £232m a year earlier. On average analysts had expected pre-tax profit of £244m.

Underlying pre-tax profit excludes acquisition, disposal and integration costs related to Tullett Prebon's acquisition of ICAP's voice-broker business in December 2016. ICAP'S contribution is included.

Including acquisition, disposal and integration costs and exceptional items, pre-tax profit for the combined businesses fell to £72m from £167m.

Paul McGinnis, an analyst at Shore Capital with a 'sell' rating on TP ICAP, said the company had produced “a relatively weak set of final results”. The company's shares fell 7% to 501p at 09:31 GMT.

Interdealer brokers make money by carrying out customer orders for banks, hedge funds and other traders in financial assets. They perform best in volatile markets that spur high trading volumes. 2017 was a year of weak volatility but business is picking up, the company said.

John Phizackerley, the company's chief executive, said: “Last year was a good first year for TP ICAP, and saw us benefit from the diversity of our product portfolio and geographic footprint by delivering a resilient performance in a low volatility environment.

“So far in 2018 we have seen an encouraging start to the year, with a pick-up in volatility and interest rates. Although it is too early to tell whether these conditions are sustainable, our diversified business model and position as the world's largest interdealer broker leave us well-placed for future growth.”

TP ICAP said it was talking to regulators in European markets about where to base its European hub if necessary after Brexit. The company said its preparations for Britain leaving the EU had been hampered by political uncertainty and that it was forced to prepare without a full understanding of the impact on its business.

“During the coming year, we will need to do what is necessary to ensure we can provide uninterrupted service to our clients after Brexit in March 2019, and seek to avoid any consequential reductions in trading volumes.”