(hooly-news.com) – The private banking and asset management activities of Rothschild & Co recorded a 14% increase in operating income to 43.9 million euros in the first half. They show a margin of 17.4% against 16.1% a year earlier. They generated record revenues of 252 million euros, up 5%, reflecting the strong growth in assets under management during 2019 and the high level of transaction volumes.
Assets under management were down 6% to € 71.3 billion as of June 30, 2020 (€ 76 billion as of December 31, 2019) due to weak market conditions. They amount to 49.9 billion euros in Private banking and 21.4 billion in asset management.
“However, the sharp drops in the first quarter at the start of the crisis were partially corrected by the rebound in the second quarter,” commented the financial group.
Net inflows came to 0.3 billion euros thanks to Private Banking (1.8 billion euros in inflows) partially offset by an outflow of 1.5 billion euros within Asset Management .
“Asset Management recorded a net outflow due in large part to North America (1.4 billion euros) for which our value-oriented investment philosophy has proved difficult in the current context “, explained the group.
However, this business recently won a major sub-advisory mandate, with Transamerica AM, a new distribution partner, for approximately $ 2.1 billion, as of December 2020.
Regarding the outlook for Private Banking and Asset Management, Rothschild & Co expects a drop in revenues in the second half of 2020, mainly due to the expected decrease in transaction volumes and the interest rate environment. interest, in particular following recent rate cuts in US dollars and pounds sterling.
Net inflows should improve in Asset Management, but the group warns that it could prove difficult to maintain current levels of private banking inflows given the restrictions imposed by Covid-19 and the reduced activity of mergers and acquisitions which is a major source of clients.