Mediobanca, in the new plan 3.7 billion to shareholders in three years - Corriere.it
with the One Brand-One Culture plan that Mediobanca is projecting today into the next three years. It does so by setting ambitious goals that emerge from the plan approved yesterday by the board of directors. A project that focuses however on capital-light assets to achieve the best returns in the sector, associated with a low risk profile aiming to achieve the best returns in the sector, associated with a low risk profile and a significant increase in the remuneration of the shareholders, immediately underlined the CEO Alberto Nagel engaged in the presentation of the plan to the market supported by his team: the general manager Francesco Saverio Vinci, Giuseppe Baldelli head of Corporate and investment banking, Gian Luca Sichel, head of Consumer finance , and Emanuele Frappini at the head of the corporate functions. This exciting journey will be accomplished while remaining anchored to the "school of responsible banking" firmly rooted in the Bank's DNA, added the CEO.
Remuneration to shareholders
In the plan to 2026 Mediobanca aims to remunerate shareholders with 3.7 billion in three years (+70%) with a payout of 70% and dividends of 2.7 billion also through the buyback and cancellation of treasury shares for 1 billion . An interim dividend will be introduced (interim dividend in May, balance in November). A one billion buyback is also planned with the cancellation of 80% of the repurchased securities. Revenues will rise to 3.8 billion in June 2026 (+6% annual average), when Mediobanca closes the year, with earnings per share up to 1.8 euro from 1.15 (+15% annual average), also thanks to the cancellation of 80% of the securities repurchased. These are some of the objectives of the new One Brand-One Culture 2023-2026 Plan with which Mediobanca intends to achieve the priority objective of leadership in wealth management.
The four pillars of the plan
The high capital creation will allow Mediobanca to finance organic growth, the distribution policy described above will make it possible to maintain a CET1 above 14.5% over the period of the plan, based on a minimum FL CET1 of 13.5%, and maintain a buffer of about 100 basis points of capital to be used for potential external growth operations, explains the bank that is looking at the m&a.
There are four pillars of the plan, which then represent the four core activities of Mediobanca on which Nagel and his bankers are betting. Firstly, Wealth Management will become the number one driver of revenue growth: it will grow in revenues and profitability, becoming the second largest contributor to group revenues and the largest contributor in terms of fees. The sales force is expected to grow by 25% to over 1,500 professionals, of which 1,350 (+25%) in the Premier segment and 170 (+15%) in the Private segment. It will grow at higher rates than the system in assets (to 115 billion, CAGR +11% against +8% of the market), revenues (greater than 1 billion), profitability (RORWA +110 basis points to 4.0%). And it will become a leader in Italy, comparable in size and profitability to the current best assets.
The corporate activity
Corporate and investment banking (CIB) will grow in revenues (to around 900 million) and profitability (RORWA +60bp to 1.6%). And it will become a stronger, broader, more diversified European platform, with higher non-domestic revenues (from 40% to 55%) and capital-light (from 28% to 40%), making the advisory the primary product by contribution and growth of CIB revenues. It will strengthen its leadership by leveraging the Private & Investment Banking model and the evident intra-group potential (in particular with Private Banking, MA and Arma Partners), confirming itself as the privileged interlocutor of medium/large companies in the reference countries (Italy, France, Spain ); o It will be the first source of capital optimization for the Group (RWA -13% in the three years to €17bn) and the second for growth in revenues and commissions.
The role of the stake in Generali
Mediobanca's insurance division, almost entirely represented by 13% in Assicurazioni Generali, will continue to contribute positively to the creation of revenues (expected to reach 500 million in 2026, with an average annual growth of 6%) and profits of the group, improving its stability and visibility. This can be read in the note on the new plan to 2026. The value of the investment lies in the excellent and growing profitability (Rorwa from 2.7% to 3.2%), further strengthened by the continued application of the Danish Compromise, in the decorrelation compared to the macro trend, in the production of high cash flow and, if necessary, it will be able to ensure the Mediobanca group available resources that can be activated in the event of external growth operations.
Consumer Finance with Compass
Then, Consumer finance. The Italian market offers significant development opportunities: less mature than other European economies - says the bank - and with market shares that can be attacked by the progressive reduction of the presence of traditional banking networks. Building on its distinctive trait (market leadership, high scoring and pricing capabilities, solid asset quality), through an important expansion of direct and digital distribution, and the development of innovative products (especially for e-commerce and BNPL) Compass: o Growth in revenues (to €1.3bn) while maintaining high profitability (RORWA at 2.9%); o Achieve an upgrade of its leadership in Italy as a multi-channel platform;
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May 24, 2023
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