Broker ICAP’s revenue dipped 5% in its third quarter amid what it described as “challenging market conditions.”

The FTSE 250 company, which matches buyers and sellers of bonds, swaps and currencies, said risk appetite had remained “subdued” among its clients as they continued to deleverage their balance sheets.

Despite a US rate rise, volatility remained “relatively benign” through the quarter before picking up at the start of the new calendar year, chief executive Michael Spencer said.

"We are still operating in an environment of ultra-low interest rates and we have some way to go before we return to more normal market conditions," he added.

Across ICAP's electronic markets division, the broker for interest rates derivatives, commodities, foreign exchange and fixed income products said revenue declined by 10% compared to the same period last year. 

Average daily volumes in US Treasuries on the BrokerTec platform were down 11% to $147 bn. 

In US repo average daily volumes fell 1% to $219bn and decreased in European repo by 3% to €168bn.

Performance improved across the firm’s post-trade business, with revenues increasing 8%, driven by continued demand for TriOptima's compression and reconciliation services.

ICAP also said its deal to merge its global hybrid voice broking business with Tullett Prebon is expected to take place during 2016.