Zurich-based Rothschild & Co Bank also took the opportunity to hire client-facing staff from what was once Switzerland's second-largest bank. They have only had a limited impact on net new money inflows to date even though profit is up significantly.
Profit increased substantially in the 55th year of Rothschild & Co Bank's existence. That is something that puts them at the forefront of a list of domestic private banks that have been able to master 2023's turbulent markets and mixed economic developments, according to the annual report published Thursday made available to finews.com.
Profit rose 40 percent to 46.8 million francs from 33.3 million a year earlier. Still, performance was impacted by costs related to the integration of Geneva's Banque Pâris Bertrand, which it took over in 2021. Without that, the profit would have been 51.5 million francs, representing a like-for-like gain of 35 percent.
Client Restraint
The interest income business made a significant contribution, rising 60 percent to 87.9 million francs. That was a sharp contrast to commissions and service income, which fell 0.6 percent to 118.4 million francs. Trading income dropped even more steeply than that, declining 5.5 percent to 18.6 million francs as many clients decided to rein in their risk appetite.
Personnel costs were up a significant 14.4 percent, mostly due to the hiring of additional client-facing staff and bankers in 2023.
Hiring from Credit Suisse
At the start of 2023, the bank hired an onshore team for the Swiss market, some of them from Credit Suisse, which was rescued by UBS in March last year at government and regulatory behest. It also hired away an entire team from what was once Switzerland's second-largest bank headed by Gerold Reiser for clients resident in Central and Eastern Europe (CEE), something that finews.com reported on at the time.
Beyond that, Rothschild & Co opened a branch in Hamburg last year, its third in Germany after Frankfurt and Dusseldorf. Out of Switzerland, the bank employed 447 people at the end of 2023.
Modest Inflows
Assets under management rose by 2.9 percent to 29.9 billion francs at end-2023, up from 29.1 billion a year earlier. When 1.4 billion in custody assets are included, total client assets were 31.3 billion at the end of last year, representing a 4.8 percent year-on-year increase.
Inflows of net new money totaled 873 million francs last year, down from 1 billion francs a year earlier. Most of the inflows were from new clients, something that prompted an almost 10 percent increase in the number of accounts.
Net new money performance was below expectations given that inflows were as high as 2 billion francs in 2021. Given that, the new employees at Rothschild & Co Bank have significant room for improvement.
