125 / 204
Rothschild & Co | Annual Report 2017
123
1. Overview
4. Financial statements
3.
Management report
2. Business review
I Highlights
Merger with Compagnie Financière Martin Maurel
On 6 June 2016, Rothschild & Co and Compagnie Financière Martin Maurel (CFMM) announced a plan to merge, with a view to combining their French
activities in private banking and asset management to create one of France’s leading independent private banks.
Following consultation processes with work councils from both groups, the merger proposals were approved by general meetings of CFMM and R&Co in
September 2016. Once it had received the approval of the French anti-trust authority, the ACPR and the European Central Bank, as well as meeting other
conditions precedent, the transaction was completed on 2 January 2017.
On 1 July 2017, and following the grant of necessary regulatory approvals, Rothschild & Cie Banque (RCB) and Banque Martin Maurel (BMM) were
operationally integrated. This integration was implemented through the contribution by BMM of its banking activities to RCB and the merger of Martin
Maurel Gestion (MMG) into RCB, after Rothschild & Cie Gestion contributed its private banking business operations to MMG. These transactions created
a combined group operating under the new corporate name “Rothschild Martin Maurel”.
Change of financial year end
On 21 March 2017, the Company announced that it would change its financial year end from 31 March to 31 December. This change was approved at
the general meeting of shareholders on 28 September 2017, and will allow the Company’s subsidiaries to be aligned with the financial year end required
for its banking regulated entities in France. The period being reported on for these financial statements is the nine months to 31 December 2017. The next
financial statements to be published will be the half-year results for the six months to 30 June 2018.
To aid comparison between reporting periods, further consolidated income statement data has been prepared in summarised form comparing the
12 months to December 2017 to the 12 months to December 2016. This is set out below.
In thousands of euro
01/01/17
31/12/17
(12 months)
01/01/16
31/12/16
(12 months)
Net banking income
1,910,156 1,712,570
- Staff costs
(1,087,064)
(1,013,386)
- Administrative expenses
(319,758)
(268,214)
- Amortisation, depreciation and impairment of tangible and intangible fixed assets
(33,938)
(31,757)
Gross operating income
469,396
399,213
+/- Cost of risk
(13,448)
(12,822)
Operating income
455,948
386,391
+/- Net income from companies accounted for by the equity method
12,268
355
+/- Income from negative goodwill
–
1,381
+/- Net income/(expense) from other assets
9,101
5,143
Profit before tax
477,317
393,270
- Income tax expense
(65,308)
(62,108)
CONSOLIDATED NET INCOME
412,009
331,162
Non-controlling interests
(1)
175,643
151,886
NET INCOME – GROUP SHARE
236,366
179,276
Earnings per share in euro – Group share (basic)
3.18
2.60
Earnings per share in euro – Group share (diluted)
3.12
2.56
(1) Non-controlling interests include amounts charged of €155.8 million (2016: €130.3 million) in respect of preferred shares and €14.3 million (2016: €13.7 million) in respect of perpetual
subordinated debt. Note 18 to the consolidated financial statements provides further information concerning non-controlling interests.
Notes to the consolidated financial statements