Strong growth in profits to 789 million euros, compared to 600 a year ago that had been impacted by the first wave of Covid: the market estimate (the so-called consensus) for Mediobanca’s annual accounts that will be approved on 29 July by Advise. A round figure, the result of the strategy carried out in recent years by the ceo Alberto Nagel at the helm of Piazzetta Cuccia since 2008. A period of time that has seen the sector experience strong discontinuities and which has led Mediobanca itself to retain its identity by expanding for the strategic mix. so that being in line with the forecasts of the 2019-2023 business plan will allow for a substantial dividend to be paid to shareholders, old and new.
The new strong partners
The green light of the ECB for the return of the coupons is triggered at the beginning of October, in time for the month-end meeting of Piazzetta Cuccia, which will establish their amount.
According to Intermonte’s calculations, it should be 0.62 per share, equal to 70% of profit. The new strong partners, Leonardo Del Vecchio with 19%, and Francesco Gaetano Caltagirone, just up to 3% – whatever their strategies on the bank (and cascade on Generali) -, will benefit from the investment in Piazzetta Cuccia (they will collect 102 and 15 million respectively) as well as the institutional funds which represent approximately 40% of the capital and the historical shareholders of the consultation agreement (Doris, Benetton, Ferrero and a few others). ‘11%. In addition to this, there is the trend on the Stock Exchange: in one year Mediobanca’s rise was 54%, well over the + 30% of the FtseMib index, and also of that of Italian (+ 35%) and European banks ( + 49%). Today the stock is worth 8.8 billion and is approaching the 10 euro threshold, a breath away from the highs of the last five years (10.85 euro in October 2019).
The business of wealth management
the wealth management business to drive growth, especially in commissions which today account for a third of total revenues (464 million in the nine months with 74 million in profits, + 11%). A taste was had yesterday with the accounts of CheBanca !: profits jumped by 52.7% to 48.7 million thanks to volumes increased by 17.2%, revenues by 13% to 358 million, interest margin of 7% to 229 million and commissions of 24% to 127 million). Mediobanca evaluates external opportunities in the sector. According to a UBS report yesterday, Piazzetta Cuccia is considering taking over the network of promoters from Deutsche Bank Italia, the former Finance and Future. A path that would allow for an increase in the masses, which currently stand at 32.5 billion managed by CheBanca! (in total over 70 billion are managed by the group). Significant growth even though Mediobanca is looking for an opportunity for the transaction that would change its face, as for example in the acquisition of Banca Generali discussed in recent months. The analysts of the Swiss bank favorably view a larger operation, which again involves the subsidiary of the Leone di Trieste or Banca Mediolanum or Fineco.
The other branches
Nagel’s objective is to equal the investment bank (Cib) in terms of contribution to revenues, a historic activity that in the first nine months made an all-time high (537 million with 232 million net profits).
In the first six months of 2021, Mediobanca was at the top of the Refinitiv rankings for announced and completed transactions. Here, too, the CEO’s strategy was to focus on the medium-sized business segment, simultaneously serving entrepreneurs with private banking. Then there is the second historical branch of Mediobanca, the consumer credit of Compass, which has been strengthened in the online and in the territory.: Covid had slowed down both customer spending and physical access in Compass agencies (-5% revenues to 764 million in nine months) but the reopening led to a recovery of pre-Covid levels. a unique mix of business and strategic vision – highlighted Citi in an analysis at the end of June. Report which also underlined the positive aspect of governance, however representative of both the board list and Assogestioni. Hence the forecast of a sustained return for shareholders. Mediobanca has solid fundamentals thanks to a high capital with a Cet 1 of 16.3% – continues Citi -, with a buffer of around 670 basis points compared to the Srep, a high potential for return on capital, an above-average profitability supported by higher revenue growth, strong liquidity and better asset quality than competitors, as well as lower moratoriums. Translated into figures for the stock market, shares are currently trading at around 6-6.5% dividend yield on 2022-2024, 8% including buy-back, and this is better than the industry average. We expect the payout to be above management’s target in 2022-2023.