LCH.Clearnet, Europe's newly merged clearing house, has seen administration costs climb 20% since its €1bn ($1.2bn) launch last year while profits for the first full quarter of operations remained flat.

An increase in IT and staff costs drove total administration costs up from €46.5m to €55.8m in the three months to March 2004 - the first quarter since the merger of London Clearing House and Clearnet in November last year. This was partly offset by an increase in turnover from €152.7m to €156.6m, helping net profits remain static at €17.2m.