GFI Group 2nd-qtr profit jumps

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

The New York-based company earned $23.6 million (11.9 million pounds), 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.