Rothschild Financing Advisory Fees Rise to Mitigate M&A Dip

Rothschild & Co saw its financing advisory fees rise by a third in 2020 as companies sought to restructure and refinance during the pandemic.

Revenue from providing advice around liquidity and financing to corporations jumped to 380 million euros ($452 million) in 2020, the Paris-based investment bank said in a statement on Tuesday. The increase helped mitigate a slowdown in the bank’s merger advisory revenue, which slipped 13% to 766 million euros in 2020 as the pandemic froze M&A activity for part of the year.

“The M&A market was interrupted by the pandemic during the year but finished the year strongly,” Executive Chairman Alexandre de Rothschild said in the statement.

The two-century-old investment bank, an historical leader in French and European M&A that this year advised on deals including Bankia SA’s acquisition by CaixaBank SA., said in the statement it was “cautiously optimistic” that business would continue to pick up in 2021.

“We are cautious because a lot of uncertainties remain on the pace of the global recovery, but we are optimistic because we are starting off the year with a pipeline that is very high in global advisory,” Managing Partner Francois Perol said in a call with journalists Tuesday.

Rothschild shares rose 2% to 30 euros at 9:30 a.m. in Paris Wednesday. The stock has gained 16% so far this year.

Wealth Unit

Rothschild’s wealth and asset management revenues were broadly flat at 499 million euros. The business’s assets under management climbed to 78 billion euros, up 3% from a year earlier. The bank’s overall revenue slipped 4% to 1.8 billion euros.

The bank said it was continuing to hire senior bankers in the U.S. where it advised on $97 billion worth of deals in 2020, up from $45 billion in 2014.

Rothschild announced a dividend of 0.7 euros per share and said it also intended to pay an exceptional dividend of 1.04 euros to account for the missed payout after regulators issued a de facto ban on distributions in 2020. That will be paid “as and when the regulator so allows, which we currently expect to be in fourth quarter of 2021.”

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