Baron Guy de Rothschild, who managed his family's French banking empire and saw it taken over first during the Nazi occupation and then by a Socialist government 40 years later, has died. He was 98.

Baron Guy de Rothschild, who managed his family's French banking empire and saw it taken over first during the Nazi occupation and then by a Socialist government 40 years later, has died. He was 98.

Guy Edouard Alphonse Paul de Rothschild, the son of Baron Edouard de Rothschild, was born in Paris in 1909. He was a great-great grandson of Mayer Amschel Rothschild, the moneylender who founded the family banking business at Frankfurt-am-Main.

Through Mayer Amschel's sons, Rothschild banks were also established in Vienna, Naples, Paris and London. "As long as you remain united," Mayer Amschel told his sons on his deathbed, "you will be strong and powerful; but the day you separate will mark the end of your prosperity." It was the youngest son, James, who founded the bank in Paris.

Guy de Rothschild grew up in an atmosphere of extraordinary opulence. His parents' house in Paris, at the corner of the rue de Rivoli and Place de la Concorde, had once been inhabited by Talleyrand. His father, a devotee of the Turf, also owned a manor at Chantilly and a stud at Meautry, near Deauville, but his principal country seat was the Château de Ferrières, some 25 miles north-east of Paris.

He started work at de Rothschild Frères, 19 rue Laffitte, in 1931 and two years later was appointed to the executive committee of the family's Compagnie du Chemin de Fer du Nord. The Rothschilds had had the foresight, after the Munich agreement with Hitler in 1938, to open an office away from Paris at La Bourboule, in what would become the Free Zone of France.

On the outbreak of the Second World War, Rothschild joined the 3rd Light Mechanised Division and became a company commander; after an engagement at Carvin, however, only three out of the 27 officers remained. He was evacuated to England from Dunkirk, where he was awarded the Croix de Guerre for his conduct on the beaches.

From Plymouth Rothschild sailed straight back to Brest. Trapped by German troops near Angoulême, he managed to escape and make his way to La Bourboule. With Alibert, the Vichy Minister of Justice, declaring his particular intention of using the anti-Jewish laws "to get at the Rothschilds," he sold off the assets. Astutely Rothschild secured options for future repurchase – if ever "the Rothschilds should see better days again".

After doing all he could for the bank, he proceeded via Spain and Portugal to join his parents in New York where he was obliged to wait a year before his enlistment with the Free French was arranged. When he finally embarked for Britain in March 1943 he was torpedoed and spent 12 hours in freezing conditions on a raft in mid-Atlantic. When he finally reached London his cousin Jimmy welcomed him with a bottle of 1895 Château Lafite.

In July 1944 he was assigned to the staff of General Koenig, and a few days later sent to Supreme Headquarters Allied Expeditionary Force. When Rothschild returned to Paris after the city's liberation in August 1944, he discovered scarcely a dozen people in the offices of de Rothschild Frères in the rue Laffitte. Having recovered the family investments, he set about making the Rothschilds once more a force in France.

Perhaps his shrewdest move was to employ Georges Pompidou, the future President of France. Within a very short time Pompidou was in charge of the business, where he remained until he became prime minister in 1962.

By 1968 the balance sheet was so healthy that Rothschild announced a grand restructuring of the business. De Rothschild Frères became the Banque de Rothschild, which took deposits and opened branches all over France. By the end of 1980 the banking sector boasted 70,000 clients, while the firm's industrial and commercial interests accounted for an annual turnover of Fr 26 billion.

So it was natural that Rothschild should feel it keenly when, in 1981, the country's Socialist government nationalised the entire structure – in exchange, as he put it, "for a total indemnity amounting to 80 per cent of the value of the building on the rue Laffitte". It was a bitter blow: "A Jew under Pétain, a pariah under Mitterrand," Rothschild wrote in a letter to Le Monde. "For me, it's enough. To rebuild on ruins twice in a lifetime is too much." He moved the base of his business operations to New York.

Later, his son David followed his father's example and began reconstructing the family banking network, which in 1987 became Rothschild & Cie Banque.