Rothschild profits drop as banker bonuses eat into higher deal fees
Long-awaited M&A recovery lifts revenues but also pushes up pay at UK investment banking arm
Rothschild’s UK investment bank paid out higher bonuses last year, eating into fees it generated in a recovering deals market and dragging profits lower.
NM Rothschild & Sons, the UK investment banking arm of Rothschild & Co, reported an 18 per cent drop in pre-tax profits to £84.9mn in 2025 despite an increase in revenues, according to accounts filed at Companies House.
Global advisory fees at the British arm of the two-century-old bank rose 8 per cent to £456.7mn in the period.
But the increase in revenues was outstripped by a 12 per cent jump in expenses, which the bank attributed to higher variable compensation that it said was “largely due to the strong revenue performance”.
The results highlight how the long-awaited recovery in mergers and acquisitions has begun to lift revenues for investment banks, while also pushing up pay as firms compete to retain and reward dealmakers.
NM Rothschild advised on a £5.3bn deal in which Czech billionaire Daniel Křetínský bought Royal Mail and which completed in 2025. It also represented Spectris, the London-listed engineering group, in its £4.8bn takeover by US private equity firm KKR last year.
The deals followed a prolonged period in which UK dealmaking was subdued by higher interest rates and economic uncertainty.
NM Rothschild employed 945 staff on average during 2025, meaning average pay per employee was equivalent to about £312,000, including bonuses.
Staff costs at the UK investment bank climbed almost a tenth last year to £364.1mn, with the bank paying out £294.9mn in fixed and variable remuneration during the period.
The group said its banker remuneration package includes deferred bonuses, which are typically paid up to three years after they are awarded on the condition that bankers remain employed at Rothschild.
Boutique advisers such as Rothschild, Centerview and Evercore have cemented their position in the UK M&A market, competing successfully with larger Wall Street and City of London rivals to win mandates on some of the country’s biggest deals.
NM Rothschild, which is led by chief executive Robert Leitão who also sits on the board of Manchester United football club, was founded in 1811 by Nathan Mayer Rothschild, becoming the British arm of the banking dynasty.
The bank said in its annual report that it expected the dealmaking momentum seen during the second half of last year to continue into the first six months of 2026.
While a surge in large deals drove a record $2.8tn in global dealmaking in the first half, the number of smaller acquisitions fell as the US-Iran war created market volatility and AI threatened to disrupt companies’ business models.
Rothschild’s mandates so far this year have included acting as the lead financial adviser to Associated British Foods on its plan to demerge Primark from its food business, breaking up its conglomerate structure after 65 years.
Rothschild & Co declined to comment.