Paris-based investment bank Rothschild & Co. (PIEJF) announced significantly stronger performance in both operating profit and revenue for the year to March and said it will continue to invest in its U.S. business to expand market share.
Rothschild said it planned to reinvest the euro 99 million ($112 million) it made on the disposal of its U.K. asset finance business during the course of last year.
It also reaffirmed plans to acquire French wealth manager Compagnie Financière Martin Maurel, which it said will lead to significant growth in its private wealth business. The merger is expected to close by the end of the current financial year.
Releasing its results after the Paris market closed, Rothschild said revenue was euro 1.59 billion, up 13% on last year's euro 1.4 billion, while operating profit was up 19% at euro 319 million.
Meanwhile the group's net profit was euro 232 million. This was up compared with the euro 144 million recorded in the year to March 2015, but the sale mainly reflected a profit on the sale of the U.K. business.
The bank will now focus on its three core businesses global advisory; private wealth and asset management; and merchant banking.
"In our global advisory business, we have gained market share thereby maintaining our position as the leading M&A adviser in Europe, in a particularly challenging market," said co-CEOs Nigel Higgins and Olivier Pécoux in a joint statement.
"We have also seen good progress in North America. In private wealth and asset management, our performance has been resilient thanks to an increase in net new assets, while merchant banking continues to increase its assets under management. The economic environment remains volatile and uncertain, but we are confident that we have the right strategy to develop our businesses over the next 12 months and in the future."
The global advisory business generated the vast majority of the group's revenue, at euro 1.04 billion, up 18% on the previous year, due largely to what it described as "strong outperformance of M&A advisory in Europe and North America. Rothschild said it ranked No. 6 globally for financial advisory revenue and was market leader in Europe.
Among the most significant mandates were Rothschild's advice to ChemChina on its acquisition of a controlling stake in Italian tire company Pirelli (PPAMF) for an enterprise value of €8.8 billion and British oil and gas company BG Group (BDGSF) on its GBP36 billion ($52.9 billion) acquisition by Royal Dutch Shell (RDS.A - Get Report) . It also advised chip company Intel (INTC - Get Report) on its $16.7 billion acquisition of Altera. Among deals still in the works are Technip (TKPPY) , (TNHPF) and its planned $13 billion tie-up with FMC Technologies (FTI - Get Report) , where Rothschild is advising Technip, and its continuing advice to Swedish specialty pharmaceutical company Meda (MDABF) , (MDABY) on its $9.9 billion sale to Mylan (MYL - Get Report) .
"In the U.S., we will continue to invest as there are interesting recruitment opportunities," the bank said. "Although this would dilute our global advisory profit margin, the strategy should be accretive to our profitability in the medium-term."
Rothschild said it will propose a dividend of €0.63 per share, an increase of 5%, at its annual shareholders' meeting on Sept. 29.
Rothschild's shares closed up 2.4% at euro 22.53.