LONDON (Reuters) - British investment bank Panmure Gordon (>> Panmure Gordon & Co. Plc) said it expected business from new share listings to expand in 2013, as a stock market rally encourages previously cautious companies to consider going public.

The 137-year-old bank, which completed four initial public offerings (IPOs) in 2012, said it had seen interest from British and Asian companies wanting to float in London.

"IPOs are one area where we see opportunity to build on strengths," chief executive Phillip Wale told Reuters on Thursday.

"That's the area (in which) I see most expansion in 2013, markets willing," he said.

Subdued activity due to the financial crisis has hit small brokers hard in recent years, but London is seeing an upturn in business, particularly of companies seeking to sell shares as the benchmark FTSE-100 index <.FTSE> rises to five-year highs.

The pick-up in stock markets has encouraged companies to test investor appetite for IPOs, with recently floated Crest Nicholson (>> Crest Nicholson Holdings PLC) and Countrywide set to be joined by esure on the London stock exchange this year.

Panmure most recently acted as broker to nanotechnology firm Graphene Nanochem, formed following a reverse takeover by AIM-listed Biofutures (>> Biofutures International Plc).

Panmure posted a pretax profit from continuing operations of 0.6 million pounds ($907,900) in 2012, compared with a loss of 6.3 million the previous year.

British investment banking boutique Shore Capital (>> Shore Capital Group Limited) also reported a jump in 2012 pretax profit earlier this week.

Panmure said it remained cautious about the fragile economic outlook, but Wale said there was still demand from investors.

Panmure said it had restored bonus payments to key staff. It is not recommending a dividend.

(Editing by Rosalba O'Brien and Helen Massy-Beresford)

By Alice Baghdjian