Edmond de Rothschild: Family Takes 50 Million Francs
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.
Family Takes Rothschild Private
Edmond de Rothschild is folding its French unit into a Swiss one, delisting its shares, and replacing its CEO. The founding family is taking back control amid a slide in client assets.
The Genevan private bank said it will radically alter its structure by meshing a French Edmond de Rothschild unit into the Rothschild Suisse entity and seek to delist its shares from Switzerland’s stock exchange.
Benjamin de Rotschild, the son of the founder, remains chairman of a holding company, while his wife, Ariane de Rothschild, will continue to oversee the Swiss bank. Edmond de Rothschild has appointed Vincent Taupin as the new CEO of the group. Emmanuel Fiévet, who has led the Swiss business, will leave the company. Taupin has been the head of Rothschild’s French unit before.
Rothschild’s board is also being shuffled: ex-Credit Suisse executive Klaus Jenny won’t stand for reelection. The founding family is taking back control of the Swiss bank amid a roughly 7 percent drop in client assets on the year to 128 billion Swiss francs ($127 billion). Rothschild said the fall was due to poor fourth-quarter markets as well as withdrawals due to reorganizing.