Zurich-based Rothschild Bank posts a significant jump in profit with the acquisition of the Geneva-based Pâris Bertrand but warns against excessive exuberance.
Zurich-based Rothschild & Co Bank posted a profit of around $100 million US dollars in 2021, up from roughly $19 million francs a year earlier, according to an annual report published on Wednesday. Much of the improvement was due to the acquisition of Geneva-based financial boutique Pâris Bertrand in December 2020, which finews.com reported on at the time.
Without buying the boutique, profit would have been a much more modest $23 million, the figures indicate although a number of additional restructuring measures also helped performance.
High Inflows of New Money
Assets under management (AuM) were up by almost half at $34 billion francs, with the integration of Banque Pâris Bertrand increasing the overall base by almost $8 billion, and market performance contributing $1.5 billion francs.
The high inflow of net new money, at $2.2 billion, was striking as it was equivalent to 9.4 percent of assets under management. Total client assets under management, custody and administration were $58 billion, up 42 percent from 2020.
Rapid Integration
Bank Pâris Bertrand was fully integrated in October 2021. The boutique's co-founder, Olivier Bertrand, has been serving as executive vice-chair and member of the executive board, as well as being responsible for the subsidiary in Luxembourg. Rothschild Bank also opened a branch in Madrid, Spain, last summer.
Ambitious Targets in Switzerland
Looking ahead to the current year, Laurent Gagnebin expressed in an interview with finews.com that the bank is pursuing clearly defined goals.
«After the acquisition of Bank Pâris Bertrand, which has strengthened us, especially in the French-speaking part of Switzerland, we have just hired Andreas Feller to drive our growth in the German-speaking part of Switzerland. In addition, we want to further expand our Global Advisory business in Switzerland in close cooperation with Wealth Management. We are also expanding our presence in Zurich,» Gagnebin said.
Tightening of Monetary Policy
Nevertheless, in the annual report, cairman Gary Powell warned against overly high expectations. «With inflation rising strongly and unemployment lower than expected, we are already seeing a tightening of monetary policy in the U.S. and U.K. We expect further rate hikes in all major currencies in 2022 – into next year. This will increase volatility on the stock markets and probably have a negative impact on stock prices,» he indicated in the latest annual report.
