UPDATE 1-Tullett Prebon says 2013 revenue falls 6 percent

Tue Mar 4, 2014 2:49am EST

* Revenue 803.7 mln stg versus 2012's 850.8 mln

* Profit before tax down to 99.6 mln stg from 111.3 mln

* Dividend unchanged at 16.85 pence per share

LONDON, March 4 (Reuters) - Interdealer broker Tullett Prebon said its full year revenue fell 6 percent, just behind analysts' expectations, as low market volatility dampened market activity and new regulations for derivatives created uncertainty for clients.

The broker, which matches buyers and sellers of currencies, bonds and swaps, said on Tuesday that revenues for the year ending Dec. 31 were 803.7 million pounds ($1.34 billion), down from 850.8 million pounds a year earlier.

That compared with a consensus estimate compiled by Tullett for full-year revenue of 807 million pounds.

Pretax profit was 99.6 million pounds, down from 111.3 million in 2012 but slightly ahead of the 102 million expected by analysts.

Chief Executive Terry Smith said market conditions worsened over the course of 2013 and he expected them to continue to be challenging.

Revenue in the first two months of 2014 was 12 percent lower than the year before, stripping out the effect of currency fluctuations, he said.

Tullett, like rivals ICAP and BGC Partners, have faced sweeping reforms of the market for swaps - financial instruments used by companies to cover their exposure to changes in interest rates, foreign exchange rates and credit ratings.

Global regulators decided after the financial crisis that derivatives such as interest rate swaps and credit default swaps, previously bought and sold through dealers, should be traded on electronic platforms, centrally cleared and recorded, in the interest of improved clarity and lower risk.

Tullett said it has faced higher costs in complying with new regulations.

"We have taken action to strengthen the business and we believe that we are well positioned to benefit from an upturn in the level of activity in the financial markets," Smith said.

Tullett's board proposed a dividend of 16.85 pence per share, unchanged from a year earlier.

Shares in the FTSE 250 company are down more than 11 percent this year and closed at 327.5 pence on Monday.