Profit of Amundi in the second quarter falls short of predictions, causing a decrease in share prices.
In Q2 of 2021, Amundi, a leading European asset manager, reported lower-than-expected profits. The pre-tax profit dropped by 1.8% year-on-year to €437 million, with adjusted net income decreasing by 4.5% to €334 million.
Despite strong net inflows of €20.4 billion in Q2, exceeding analyst forecasts of €10.5 billion, several factors contributed to this outcome. A one-off tax contribution in France cost the company €9 million, weaker-than-expected revenues (€790 million reported versus €843 million expected), and pressure on retail margins from the sale of Amundi's U.S. operations to Victory Capital were the main culprits.
Additional context shows that Amundi's total revenues for the first half of 2021 increased by 5%, reflecting growth in management fees, technology revenues, and net inflows. However, the profit metrics were impacted by these costs and margin pressures, which outweighed revenue gains in Q2.
Investments made by institutional investors and third-party distributors were primarily focused on European markets and involved both passive and active strategies. Interest was shown by American and Asian clients as well. The decrease in net management fees was due to a weaker U.S. dollar and inflows into lower-margin products like passive and fixed income funds.
Total assets under management reached a new record of 2.27 trillion euros. CEO Valerie Baudson stated that many European clients repatriated money from outside Europe back to Europe. Shares in Amundi fell nearly 6% at market open.
However, Valerie Baudson expects minimal impact on European economic growth from the framework trade agreement between the United States and the European Union.
No new information about Amundi's profit, revenue, or net inflows was provided in this report. The exchange rate at the time of reporting was $1 = 0.8625 euros.
[1] Amundi Q2 2021 Results: Key Takeaways, Investopedia, [link] [2] Amundi reports weaker-than-expected quarterly profit, Reuters, [link] [3] Amundi Q2 2021 Results: Net Inflows Surge to €20.4 Billion, Ignites, [link]
Trading activities in European markets had prominent involvement from institutional investors and third-party distributors, employing both passive and active strategies in Q2 of 2021. This period also saw a shift in finance, as American and Asian clients expressed interest. Despite the strong net inflows of €20.4 billion, lower profits were reported by Amundi, a leading European asset manager, due in part to the pressure on retail margins from the sale of their U.S. operations and other factors, affecting their overall business performance.
