Rothschild & Co Bank reports a first-half profit drop, while client assets under management shrank, research by finews.com shows. Still, the private bank sees itself well equipped to master difficult times through subsidiaries abroad and its Swiss business.

Zurich-based Rothschild & Co Bank booked a 9.6 million Swiss francs ($10.1 billion) profit in the first half, a 5 percent decline compared with last year's figure in the same period of 10.1 million. At the same time, the operating profit also shrank by 5 percent to 11.8 million francs, according to internally reported results Tuesday.

The main contributors were value adjustments on investments and write-downs on real assets such as real estate totaling 7.5 million francs, compared with 3.7 million francs a year ago. The impairments in participations are mainly due to the integration of Banque Paris Bertrand in Geneva which Rothschild Bank acquired the institution last year.

Higher Personnel Costs

Although the expansion of the Geneva branch following the acquisition led to higher personnel costs and goodwill amortization, it has reportedly further strengthened the bank in the Swiss market and attracted new talent, particularly in the front office.

Despite financial market challenges in the first half, the bank was able to attract 845 million francs in new money during the first six months of the year. Total assets under management fell to 26.9 billion Swiss francs at the end of June from 31.4 billion francs at the end of 2021, with the decline largely market-related.

Expansion of Germany Business

Consolidated commission income increased significantly year-on-year from 47.1 million to 62 million francs at the end of June. Interest rate hikes by central banks positively impacted net interest income, boosting it by 7.2 million francs to 18.2 million francs.

The bank further reported that it was able to significantly improve the profitability of its German business and expand assets under management. Management expects subsidiaries in Madrid and Luxembourg as well as the just-opened representative office in Israel will make a positive contribution to the earnings pot in the near future.