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Paris Orleans (PAOR), controlled by the Rothschild banking family, said net income fell 64 percent amid a slowdown in its core financial advisory business.
Net income dropped to 37.2 million euros ($46.2 million) in the year to March 31, from 102.4 million euros the previous year, which included gains tied to consolidating its Paris bank and selling part of a French asset-management unit, the company said in a statement today. The group is seeking to cut costs of about 20 million euros over two to three years, notably in support functions, and generate about 25 million euros of savings per year in financial advisory from March 31, 2013.
Revenue for global financial advisory and corporate banking, which accounts for 67 percent of net banking income at the group, fell 9 percent on the back of a slowdown in M&A, restructuring and capital markets advisory in all countries except for Germany and some emerging markets, the company said.
Takeovers in Europe fell 20 percent in the second quarter, while Asia eked out a gain of around 3 percent, according to data compiled by Bloomberg. North America was the best- performing market, with dealmaking rising 10 percent to almost $190 billion from the previous quarter.
Private equity revenue gained 37 percent in the period, while wealth and asset management revenue fell 5 percent. The group had 37.1 euros billion in assets under management versus 37.2 billion the previous year.
Paris Orleans agreed to a reorganization that will turn the company into a French limited partnership while minority holders in units like Rothschild & Cie. Banque get new ordinary shares in exchange for their stakes. The plans will simplify the structure, leave the French and U.K. branches of the bank unified, and tighten the family’s control over the firm, overseen by David de Rothschild.
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