Bloomberg News

Edmond de Rothschild Declines After Profit Slumps

August 23, 2012

Banque Privee Edmond de Rothschild, the Geneva-based wealth manager founded in 1953, traded near a seven-year low after first-half profit declined 44 percent.

The bank’s shares, which exchange hands at an average of just five units per day, fell 0.9 percent to 16,350 francs ($17,098) as of 9:08 a.m. in Zurich trading. The stock has dropped 35 percent since this year’s high on April 13.

Profit fell to 40.3 million francs, the bank said in an e- mailed statement after the close of trading yesterday. Assets under management rose 5.3 percent to 96.2 billion francs during the first half after net inflows of 3.9 billion francs.

Edmond de Rothschild stock slumped 64 percent from 45,555 francs a share in 2007 as a global crackdown on tax evasion cuts margins for Swiss private banks. Baron Benjamin de Rothschild, the sixth generation since Mayer Amschel Rothschild and his five sons bankrolled European governments in the 19th century, is chairman of the firm’s board and holds a controlling stake.

Edmond de Rothschild’s return on assets, a measure of profitability, fell by half to 0.6 percent in the six-month period compared with a year earlier.

Bank executives have sold 620 Edmond de Rothschild shares this year, including the sale of 13.5 million francs of stock on May 8, according to notices published by the Zurich stock exchange. The exchange isn’t obliged to disclose the seller’s identity.

Backing Wellington

Other members of the Rothschild family, which financed the Suez Canal and Wellington’s victory at Waterloo, also own stakes in the bank that first floated shares on the Zurich stock exchange in 1987.

Claude Messulam was replaced as chief executive officer of Edmond de Rothschild in April by Christoph De Backer, the former CEO of HSBC Holdings Plc’s French unit. Sylvain Roditi, head of private banking, leaves next month to run his own wealth management company.

About 75 percent of the firm’s assets under management are from private, mainly European, clients, the bank said in April. Edmond de Rothschild has opened offices in Hong Kong and Dubai to try to lure new customers from emerging markets.

To contact the reporter on this story: Giles Broom in Geneva at gbroom@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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