* Merchant bank weakness also depresses result
* Bank ranked in top 3 league table in France
* CEOs cite 'difficult environment' (Adds background, details)
PARIS, Nov 29 (Reuters) - Rothschild, the independent investment bank, reported a 14 percent drop in first half revenue, citing a weak mergers and acquisition market as well as fewer asset sales at its merchant bank.
Rothschild holding company Paris Orleans said revenue in its fiscal first half ended Sept. 30 fell to 510 million euros ($662 million) from 590.7 million euros in the year-ago period.
Net profit sagged 16 percent to 35.5 million euros.
Rothschild's concentration on corporate finance and M&A advice has allowed it to avoid some of the drastic job cuts that have swept banks with trading activities but it has been struggling to find new sources of revenue as acquisitions - especially in Europe - decrease.
"The first-half results reflect the difficult environment we're dealing with," group Chief Executives Nigel Higgins and Olivier Pecoux said in a prepared statement. "Still, we reinforced our market share during this period and our worldwide presence will put the group in a good position to seize the opportunities of any market rebound."
Advisory income fell 12 percent to 329.1 million euros while revenue from private banking and asset management slid 6.8 percent to 141.2 million and merchant banking income dropped 37 percent to 39.7 million.
Rothschild enjoys a top-three M&A ranking in its home market of France and ninth-place in Europe in the year to date. On a worldwide basis, Rothschild holds an 11th-place ranking in terms of deal value and is ranked number 10 in imputed fees, according to estimates from Thomson Reuters/Freeman Consulting.
In recent months it advised French utility GDF Suez on its 9.5 billion euro buyout of the minorities of the UK's International Power as well as Russia's Sberbank on its $3.5 billion takeover of Dexia's Turkish unit Denizbank.
Paris Orleans said it was target ting 25 million euros in cost cuts in the year ending March 31 on top of 20 million in reductions it expects to reap thanks to a previously announced merging of its operations in France and Britain.
($1 = 0.7705 euros) (Reporting by Christian Plumb; Editing by Anthony Barker)