On a sunny Friday in March, Ariane de Rothschild assembled staff from her bank in a glass-roofed park pavilion in central Paris. The chief executive told the dozens of private bankers and fund managers that business at the Swiss bank was strong.

As she spoke, French police arrived at the bank’s townhouse office a short walk away. They had orders to search the property as part of an investigation into a diplomat who used to work at the bank and was an associate of the late Jeffrey Epstein . After the event, the CEO went to meet them.

The raid came after the Justice Department’s release of millions of Epstein files had put a harsh spotlight on the sex offender’s elite network of associates—influential people like Ariane, a billionaire baroness through her marriage into the Rothschild dynasty. The DOJ files showed she visited Epstein’s island, sought his advice about complex family relationships and had her bank pay him a $25 million fee for consulting.

A few blocks away, members of another branch of the House of Rothschild were bristling over the reputational knock. Their Rothschild & Co. bank, tracing to 1809, for years had been trying to distance itself from Ariane and her Geneva-headquartered Edmond de Rothschild bank.

The Paris offices of Rothschild & Co., a bank that was formed from the French and British branches of the family. Benjamin Malapris for WSJ

Now, the Epstein headlines were a concern for clients. Not to mention, it was personally unpleasant for family members to read Ariane’s unvarnished thoughts. In a 2017 email to Epstein that had just been made public, she called the cousins at Rothschild & Co. “a dead breed.”

Alexandre de Rothschild , one of those cousins and the young CEO of Rothschild & Co., had a simple message for his teams, according to people familiar with the matter. Relationship managers should tell concerned patrons: Not us. The other ones.

Across eight generations, the Rothschild dynasty has survived wars, financial crises and persecution. The Epstein scandal threatens to deepen a divide among the descendants at a time when the two remaining banks bearing the family name are increasingly in competition.

In a statement, Edmond de Rothschild said “the Group has not seen any significant adverse impact since the release of the DOJ files and its commercial position is extremely strong.”

Neither the bank nor Ariane de Rothschild “knew of Epstein’s heinous crimes nor are they party to any proceedings whatsoever in connection with Epstein’s actions,” the bank said.

French prosecutors said the raid at the bank’s Paris office was part of a preliminary investigation into possible corruption charges targeting the former diplomat following revelations in the Epstein files.

Executives at rival Swiss private banks said they have heard from some of the bank’s wealthy clients who are concerned about the Epstein revelations, and some are wondering whether there might be a reunification between the Rothschild banking branches.

Edmond de Rothschild said it isn’t contemplating a merger or sale. “To suggest that one branch would seek to derive economic benefit from the Epstein matter would be to misunderstand those ties and to insult the decision-makers involved,” it said.

The Rothschilds trace their lineage back to Mayer Amschel Rothschild, who rose from his birth in the Jewish ghetto of Frankfurt to build an international banking empire. At its peak, the family was among the wealthiest in the world.

Over the centuries, the Rothschild fortune—and name—has been divided among dozens of descendants in England, France and elsewhere. What remains today of the banking business has coalesced around two banks that share the family’s five arrows motif.

The Swiss private bank is run by Ariane, a former trader who married into the clan in 1999 and later took the helm of Edmond de Rothschild from her husband. The French-British investment bank is run by Alexandre, a banker and seventh-generation Rothschild who inherited the CEO role from his father in 2018.

Both banks can trace their lineage to Mayer’s youngest son, James, who gilded the Rothschild legend with his palatial office-home in central Paris, and leapt into society hosting luminaries such as Honoré de Balzac and Giacomo Puccini.

Before the Epstein revelations, old tensions were rising. The two banks once had very different business models—Rothschild & Co. is best known for deal advice to global companies and governments, and Edmond de Rothschild for private banking and asset management—but increasingly they overlap. They co-maintain a website, rothschild.com, to redirect uncertain visitors.

After absorbing the family’s British bank and recent expansion into wealth management, Rothschild & Co. now manages around $200 billion, to Edmond de Rothschild’s $250 billion. Edmond de Rothschild, meanwhile, has been hiring more deals bankers, and advised on around 60 transactions last year, to its rival’s 694.

Last year, Rothschild & Co. hired two of Ariane’s seasoned private bankers in Switzerland, after they had left. One managed some family accounts and was a trustee at her Edmond de Rothschild charitable foundation in the U.S.

The Geneva bank traces its origins to Edmond, a fifth generation heir who started an investment company with inherited money. After World War II, his cousins in Paris rebuilt. Edmond helped financially when France nationalized their bank in the early 1980s. But the Rothschild banks largely went their own way.

Edmond died in 1997 and the founder’s son Benjamin, then in his 30s, was named chairman of the Swiss bank. A collector of Ferrari Formula One cars and yachts, Benjamin had met Ariane a few years before at a business meeting. They married in 1999.

Ariane was the daughter of a German executive and French mother. She grew up in exotic locales, went to business school in New York and worked at AIG, where she traded currencies. She plunged into Rothschild life, telling an interviewer she identified with their risk-taking and stretching limits.

In 2009, Ariane became her husband’s No. 2 at the Swiss bank, to the alarm of some culture bearers. Mayer excluded female relatives from inheritance, although many married cousins.

“A woman could be a Rothschild and make wine, but having a hand in banking and pure finance was simply not done,” Ariane said in a 2011 interview with Terrafemina, a women’s magazine.

Ariane united a sprawl of Edmond de Rothschild banks and offices across the continent. “It was already difficult enough for people to understand who does what among the different branches of the Rothschild family,” she told Le Point, a French news magazine, in 2014.

In June 2013, Ariane met Epstein at lunch with a Norwegian diplomat and a political hire from her bank. In a follow-up message, Epstein referred to time he’d spent with Edmond learning business. He proposed meeting again to give her some uncensored advice. “Deal !” Ariane replied, according to emails released by the Justice Department.

Their correspondence was intimate, with Epstein asking her to help him find a new female assistant and Ariane griping about Benjamin and his estranged mother, Nadine, who in a pique moved her money out of the bank her husband started. Ariane and Nadine are still in a dispute about Edmond’s art collection.

Ariane caught flights on Epstein’s private plane and helped him furnish his homes. In November 2014, Epstein hosted Ariane and three of her teenage daughters on his private island in the Caribbean, the files show.

Early in 2015, Epstein’s face was splashed across front pages and television after Virginia Roberts filed an affidavit in a civil suit in Florida alleging she’d been forced to have sex with Epstein, Prince Andrew and others from the age of 17. Andrew Mountbatten-Windsor, who was stripped of his royal titles last year, has denied wrongdoing in relation to his dealings with Epstein.

“I wondered if I should have addressed my horrible press directly with your daughters,” Epstein emailed Ariane after an afternoon meetup in Paris that March.

The next month, David, the patriarch in Paris who unified the U.K. and French banking businesses, announced his company would change its name to Rothschild & Co. from Paris Orleans, a relic from starting over after nationalization.

Ariane strategized with Epstein on pushing back, and thrust the matter into public view by filing a lawsuit in 2015 to control using the name in finance. “He’s getting wipped in the open by a woman non Jewish, non family born, non banker-born ,” Ariane wrote to Epstein . “He s also finding out that he s not all powerful in Paris.”

That year, Epstein introduced Ariane to one of his legal associates and helped Edmond de Rothschild negotiate a Justice Department settlement over hidden American accounts, part of action against dozens of Swiss banks to halt tax evasion.

The settlement came in at $45 million. Epstein got a $25 million payout. “Deep thks for your amazing help,” Ariane wrote to him.

The Paris and Geneva families settled their dispute in 2018 , agreeing to add prefixes or additional names in marketing. In a joint statement, the two sides invoked the family motto, “Concordia, Integritas, Industria,” which means Harmony, Integrity and Industry. But they also said they were unwinding their historic minority shareholdings in each other.

Late that year, Epstein made headlines again, when the Miami Herald published a series that revisited his abuse of teenage girls and the lenient plea deal he received.

In February 2019, Epstein asked Ariane if the bad press was causing her concern. “Not at all – didn t see the press here 😬 and journalists write a lot of nonsense anyways,” she replied.

The Paris offices of Edmond de Rothschild bank, which has its headquarters in Geneva. Benjamin Malapris for WSJ

The next month, they got together in Paris. Epstein was arrested a few months later and died in August 2019 while in jail.

After Epstein’s arrest, Edmond de Rothschild denied it had any Epstein ties. The bank told Bloomberg that Ariane had never met Epstein and that the bank had no business links with him.

In 2023, when The Wall Street Journal reported on her meetings and communications with Epstein, the bank said Ariane met with Epstein as part of her normal duties between 2013 and 2019, and she was unaware of legal proceedings against him or “any questions regarding his personal conduct.”

Ariane came out fighting when her Epstein connections resurfaced this year. She wrote to some clients in February, saying she had no knowledge of Epstein’s crimes and expressed compassion for his victims.

In her letter to clients, Ariane also said that some elements in the Justice Department files were clearly false or altered. She said the association didn’t reflect on her or the bank’s integrity.

Ariane’s situation is complicated because her husband’s death in 2021 left her as Edmond de Rothschild’s main owner, CEO and face of the bank to customers, bank analysts said. She can’t neatly step aside, and there isn’t a clear successor.

Andreas Venditti, a banking analyst at Vontobel in Zurich, said two things matter to wealth management clients: “It’s about trust and it’s about reputation.”

Write to Margot Patrick at margot.patrick@wsj.com