Mediobanca achieves record results and raises estimates for the year: “We will beat the plan’s objectives”

MILAN. At the halfway point of the first six months, Mediobanca puts the turbo into action, revenues leap by 14% to 1.66 billion, profit goes up 6% to 555 million euro and the profitability expressed by the return on tangible equity settles down 14 %. Numbers above estimates and at the “highest level ever reached”, says CEO Alberto Nagel. The objectives set in 2019 for the three-year period which ends, together with the financial year, on 30 June are one step away: «When the plan was launched it was considered very aggressive on revenues, in the meantime there were Covid and the war in Ukraine and despite this we will close well above the target» which, in terms of revenues, «is 3 billion», recalls Nagel. Even in terms of profits, continues the banker, “we are going beyond the plan”. The rate hikes by the ECB gave fuel, it is no coincidence that the interest margin soars in the six months (+15% to 843 million) with a particular momentum in the second quarter (+19% to 450 million). But Mediobanca is also accelerating in digital: 30% of new loans aimed at consumer credit by Compass come from the online channel, plus there is a boost from the two recent acquisitions in fintech. Commissions also performed well, rising by 7% to 472 million in the six months and by 9% (260 million) in the quarter thanks to the “record results” of investment banking. The contribution of Generali (13% stake) also grew by 4% to 194.4 million, with a leap to 107 million in the quarter. The fact is, recalls Nagel, “in my memory, a quarter with 900 million in revenues has never been recorded”, up by 20%, and with profits of 293 million, +11%. Now it is already time to think about the future with the new plan which will be presented «by 2023». The idea is to focus on digital and ESG, «maintain a very high and convincing dividend policy, grow with mergers and acquisitions and also restart any buybacks». In the meantime, the banker adjusts his estimates for the year upwards: no longer a 4% increase in revenues. «After such positive six months» the bar rises to +10%. “We also believe that net interest income should be revised to 18-20% year-over-year growth.” As for the coupon, the payout of 70% is confirmed, «already at the maximum levels of the system», but with more profits, the total dividend will grow. In the spring, then, the construction site for the renewal of the board of directors will open, destined to close at the end of the summer with the list of the outgoing board of directors. “I’m at the bank’s service and therefore I will do what the stakeholders deem appropriate,” says Nagel, while the moves of the large partners Delfin and Caltagirone remain unknown.

The scenery
As for the scenario the bank will face, Nagel observes that the banking system “not only in Italy, is much more solid and therefore there are less incentives for mergers and acquisitions”. In short, risk can wait because “as the banks do better, and the difference between the book value and the multiple at which they trade decreases, there may be less convenience for consolidation operations”.