Toronto-based investment dealer GMP Capital (TSE:GMP) Friday posted a second-quarter loss as revenues declined seven per cent due to investor caution in the current economic environment.
"Not surprisingly, the pace of client trading and equity underwriting activity has slowed considerably with the severity of this downturn," GMP CEO Harris Fricker said.
"Despite the unfavourable market conditions, we are pleased with the performance of our M&A franchise, which delivered solid results this quarter, and our new high yield business which continued to gain momentum as we married our raditionally strong origination ability with a first-rate distribution network via GMP Securities, LLC."
GMP said fees from client trading and capital underwriting have fallen due to Europe's debt crisis and a weak global economy.
GMP's net loss was $4.1 million or six cents per share, with $67.7 million in revenue. A year earlier, GMP's Q2 had $2.7 million of net income attributable to common shareholders or four cents per share.
Fricker added that GMP will focus on preserving its capital strength, monitoring and managing risk and limiting costs.
During the quarter, GMP Securities advised on seven M&A transactions announced in Canada valued at US$1.8 billion and participated in 47 underwriting transactions completed in Canada helping raise approximately $3.7 billion on behalf of clients.
The company's wealth management arm - Richardson GMP - posted a loss of $0.7 million due to lower client trading volumes as a result of the continued challenging market environment. At June 30, the wealth manager had $13.7 billion in assets under administration.