At the end of a tense financial year in 2020, Rothschild & Co wants to be relatively ” optimistic “. The bank published a net profit of 173 million euros, down 26%, excluding exceptional items. After a 48% drop in profit over the first six months of last year, activity picked up at the end of the second half of the year, and a number of signals have now turned green, considers François Pérol, the co-chairman of the executive committee of Rothschild & Co. “The volume of deals in preparation is very high, net inflows are positive in private banking and the outlook is good in our investment businesses”, underlines the leader.
And the group intends to remain on the offensive, after the acquisition in mid-December of the Swiss private bank Pâris Bertrand. “We are targeting acquisitions of targeted size in private banking in Europe, particularly in Switzerland, France, Great Britain and Germany”, says François Pérol.
In M & A, the bank continued its investments, through senior recruitments in the United States, and “These are starting to bear fruit”, considers the leader.
However, this did not prevent the group’s profits from falling for the second consecutive year (-23% in 2019). Rothschild & Co attributes most of this decrease to unrealized capital losses realized on private equity investments, where the group manages 15.7 billion euros. “Our portfolio was less valued in 2020 given the health crisis. It is a transitional situation which does not call into question the very good prospects for this profession ”, estimates François Pérol, who underlines that the revenues drawn from the management commissions in the unlisted have on the other hand increased by 24%.
The other businesses have withstood the crisis well. M & A revenues were almost stable at 1.15 billion euros, with a sharp rebound over the last two quarters, and financial and restructuring advice saw strong activity. Rothschild & Co notably advised Abu Dhabi Power Corporation on its merger with TAQA ($ 55 billion) and funds for the takeover of the elevator business of ThyssenKrupp (€ 17.2 billion), one of the largest LBO in Europe.
In France, the bank was maneuvering with Ingenico as part of its merger with Worldline (21 billion), CVC for the sale of Elsan clinics (3.3 billion euros), and it has just completed the process of selling Aviva France (3.2 billion) to Macif. In debt restructuring, it has proved essential, with mandates with Rallye (over 3.6 billion), Technicolor (1.5 billion), Europcar (2 billion) or currently AccorInvest. As for asset management, it also performed relatively well, despite market volatility. Net inflows increased by 16% to 2.9 billion euros.