Posted Feb 28 2022 at 7:30 PM
After a historic year marked by the boom in mergers and acquisitions, Rothschild & Co fears a slowdown in activity against the backdrop of the Ukrainian crisis. “It is far too early to know what its impacts will be, but obviously this creates a level of uncertainty which is higher”, declares to “Echos” François Pérol, co-chairman of the executive committee of the family bank.
“Who says uncertainty in the financial advisory profession potentially means projects that could be postponed, decision-makers may be more cautious, companies that may hesitate before studying or launching such and such a project. So far, the year had started very well, with a “pipeline”, that is to say a number of operations not yet public but under discussion, at a record level.
Faced with a possible slowdown scenario, also linked to monetary tightening, Rothschild wants to be dynamic. “We adapt our recruitment to the activity, resumes François Pérol. In 2021, we recruited a lot and we will see, depending on the activity, what will happen in 2022. ” Last year, the group’s workforce fell from 3,600 to 3,940 people, against the backdrop of a war for talent in the profession. .
Revenue up 63%
This sudden change of context could mark the end of a historic cycle for the profession of M&A consulting, the queen discipline of Rothschild, of which it presents itself as the European leader in terms of income. M&A hit an all-time high of $5.815 billion globally last year, up 63% from 2020, according to Refinitiv figures.
In this environment, Rothschild recorded unprecedented results: revenues up 63%, to 2.93 billion euros; net income group share up by… 343%, at 766 million. “Our three businesses delivered solid performances thanks to a long-term strategy and the quality of the relationship with our customers in very favorable market conditions,” said Alexandre de Rothschild, Executive Chairman.
The bank notably advised Alstom on the acquisition of Bombardier and the American distribution giant Walmart on the sale of Asda. In addition to financial advice, which accounts for two-thirds of revenue and just over a third of pre-tax income, the bank is present in two other businesses: private banking and asset management on the one hand, and “merchant banking” or private equity on the other hand.
The bank listed on the stock exchange but controlled by the Rothschild family and its associates wants to pamper its shareholders. It announced a total dividend of 3.79 euros per share, including an exceptional dividend of 1.60 euros.