The Genevan wealth manager finished an operationally lukewarm 2019 with lower profit. The founding family is taking out a bigger dividend than the bank’s profit.  

Last year marked Edmond de Rothschild’s going-private as well as the integration of its French business. The Genevan wealth manager’s results showed it, according to an emailed statement on Tuesday.

Due to the changes, the bank, controlled by a branch of the eponymous family for the last 250 years, posted higher revenue. Without the restructuring, income edged four percent lower – as did spending, resulting in a 44 million Swiss franc ($47.5 million) net profit.

That is less than one-quarter of the 222 million francs from 2018, when Rothschild’s profits were inflated from selling the family silver (prime real estate). It’s also sharply off the 2017 profit of 76 million francs.

«An annual dividend of 50 million francs will be proposed to the general meeting,» according to the statement. In short, the owners – effectively Benjamin and his wife, CEO Ariane de Rothschild – are paying themselves more money than the bank turned a profit last year. Edmond de Rothschild’s conservative capital cushion likely facilitates this.

Mixed Client Interest

Operationally, Rothschild hasn’t yet demonstrated that its shift as an investment manager with wealth and asset management is working. Managed assets rose – thanks to favorable market swings – by 3 percent to 173 billion.

The private bank posted net inflows, though bled 2.4 billion francs in stock and so-called overlay programs (or one which uses derivatives to add an additional component – layer – to portfolio management). By contrast, a private infrastructure business soaked up 16 billion francs in client money. A property platform grew to 11.4 billion francs.