NYSE Euronext said a pick-up in European derivatives transactions helped the exchanges operator being bought by IntercontinentalExchange to report a 44 per cent increase in net profits.

The company, which runs the largest US stock exchange by volume, said the gains came amid a slowdown in its primary business of equity trading in both the US and Europe.

Net revenues from derivatives trading in Europe – increasingly one of its key drivers of profits – rose $27m to $201m on the back of higher trading volumes. The growth in the quarter came as investors have begun positioning for a change in interest rates. With the eurozone economy continuing to weaken, the European Central Bank is widely expected to cut interest rates on Thursday.

Net income for the first quarter rose from $87m to $126m year-on-year. The company reported $8m in merger expenses and exit costs for the period, compared with $31m a year ago. Revenues rose 1 per cent in the same period, to $963m. NYSE also took a $10m stock-based compensation charge in the quarter.

NYSE’s European derivatives business, known as NYSE Liffe, is the main asset sought by ICE as the two parties prepare to put their planned $8.2bn deal before antitrust authorities in Europe in coming weeks.

The cash-and-shares deal, in which the 14-year-old ICE will purchase the 221-year-old owner of the New York Stock Exchange, will create a rival to CME Group and Deutsche Börse as one of the world’s largest derivatives exchanges by contracts traded.

It will give ICE access to trading interest rate derivatives, the asset class most used by investors, banks and corporations to hedge risk and speculate. Both groups have scheduled a shareholder meeting in June to approve the deal.

“When you look at the combined business, you see a company with a completely different complexion than the one we have today,” said Duncan Niederauer, NYSE chief executive. “Almost 50 per cent of our net revenue will be generated from our derivatives business.”

He added: “This is a critical aspect of the transaction because of the relatively high margin and its impact on our overall valuation.”

The focus on derivatives markets comes as profits from equities transaction continue to slid, amid an industry wide downturn in volumes. NYSE said transactions from its European and US equities business fell 13 per cent respectively.

Alongside the ICE deal in December, NYSE agreed to move clearing of contracts traded on its Liffe derivatives exchange to ICE’s London-based clearing house, rather than build its own operations.

The move will allow NYSE to compete for business as new rules around derivatives markets come into force over the next 18 months. Bourses are looking to exploit a push by global regulators to move more of the over-the-counter derivatives market on to exchanges and through clearing houses.

Shares in NYSE Euronext, which have outperformed a broad measure of US stocks since the start of the year, rose 0.4 per cent to $38.81 on Tuesday in New York.

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