Posted on Jul 31, 2020 at 6:00 p.m.Updated Jul 31, 2020 6:20 p.m.
The interest of having a diversified activity. With the coronavirus pandemic which has severely slowed down buyout operations between companies, Lazard intends to take advantage of its expertise in financial restructuring to run its store. In the second quarter, the consulting activity “ in mergers and acquisitions has fallen but that in restructurings has risen sharply Lazard CFO Evan Russo said Friday at a conference with financial analysts.
The bank, which advises bankrupt Lebanon and has just completed the gigantic restructuring of the Californian energy supplier PG & E, is now intervening on bankruptcy deposits accelerated by the pandemic, from fashion (Macy’s, JC Penney, etc.) to oil sector (Pioneer Energy, Premier Oil, etc.). ” Historically, restructuring activity represents a range of 10% to 40% in periods of deep recessions. We’re ready to be in the top of that range », Explained Evan Russo.
In asset management, the other major pillar of activity alongside financial advice, “ the diversification of our investment platforms and clients globally continues to provide a solid foundation for long-term growth “, Assures his side the CEO of the bank, Ken Jacobs.
Overall, the pandemic has nonetheless dented income. In the second quarter, marked by a decline in US GDP of 9.5% in the United States and 12.1% in the euro area, Lazard’s operating revenues fell 14% year-on-year to $ 543 million , for adjusted net income of $ 75 million, down 12%.
For the first half of the year, operating revenue fell 12% from the first half of last year to $ 1.1 billion, and net income fell 26% to $ 142 million.
While financing is available in markets reassured by the intervention of central banks, activity in mergers and acquisitions ” will depend on confidence in the outlook Of the sectors concerned, now believes Ken Jacobs. In mergers and acquisitions, operations interrupted at the start of containment have resumed, and new operations have started in recent weeks, he said.
And if he is ” difficult to generalize trends from a few weeks or months of activity », Europe could restart more quickly than the United States, whose management of the health crisis is more erratic. While employees have returned to work in the office in Europe, those stationed in the United States are still mostly working remotely.