UPDATE 2-GFI Group 2nd-qtr profit jumps 24 pct

(Adds details)

July 31 (Reuters) - Inter-dealer broker GFI Group Inc GFIG.O, which earlier confirmed that it was in merger talks with British rival Tullett Prebon Plc (TLPR.L), said quarterly profit rose 24 percent, helped by higher brokerage revenue.

The New York-based company earned $23.6 million, or 20 cents a share, in the second quarter ended June 30, compared with $19.1 million, or 16 cents, last year.

Excluding items, the provider of brokerage services to institutional clients earned 22 cents a share.

Analysts had expected a profit of 22 cents a share, before special items, according to Reuters Estimates.

Brokerage revenue rose 11 percent to $245.6 million. Total revenue for the quarter rose 15 percent to $261.5 million. Analysts had expected revenue of $276.4 million.

Rise in trading volumes, amid increased equity market volatility driven by the turmoil in credit markets, have helped inter-dealer brokers to post higher revenue.

However, GFI faced lower trading volume in structured credit products in May and June, from the deleveraging by banks and investment banks, as well as due to staff defections from its credit team in New York to a competitor.

"Despite these challenges, our total revenues from credit products rose 5 percent year over year," Chief Executive Michael Gooch said, adding the company has re-staffed a significant portion of its credit team.

Compensation and employee benefits expense was 60.7 percent of total revenue in the second quarter and GFI had 1,065 brokerage personnel at the end of the quarter.

The company expects third-quarter brokerage revenue to rise by 5-7 percent and total revenue by 7 to 10 percent from a year ago.

Shares of GFI closed up 11 percent at $10.09 Thursday on Nasdaq, after the company and Tullett Prebon, the second-largest interdealer broker, confirmed they are in talks for a possible merger. [nL1558454]

If a merger goes ahead the new group would overtake ICAP (IAP.L) as the world's biggest interdealer broker by headcount. (Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by Deepak Kannan and Gopakumar Warrier)