How Mediobanca has changed
In 2003 we embarked on a period of profound change, transforming Mediobanca from an equity holding company to a group of highly specialized banking businesses. The 2016-19 strategic plan will complete this process, speeding up the disposal of equity investments to allow us to grow our banking activities further.
BANKING REVENUES DOUBLED
Since 2005 we have become more of a bank and less of a holding company. In this period:
- Banking revenues have doubled, from 0.9 billion to 2.1 billion euros
- The percentage of revenues generated by our investment portfolio has reduced substantially, from one-quarter in 2005 to about 12% today
- Corporate/retail diversification has improved considerably: the percentage of banking group revenues accounted for by retail activities has increased form 30% to more than 60%.
GROUP REVENUES BREAKDOWN (€bn)
FY18 BANKING REVENUES BREAKDOWN
Retails includes mortgages, private banking and consumer lending – Corporate includes wholesale and leasing.
EFFECTIVE CORPORATE/RETAIL DIVERSIFICATION
Since 2005, our group has diversified effectively into retail and consumer banking, as a result of growth by Compass Banca, the Linea acquisition, and the launch of CheBanca! (both of which in 2008). In particular:
- Retail and consumer banking revenues have trebled, from 0.3 to 1.5 bn euros, and account for around 80% of the group’s net interest income;
- In the past ten years, net interest income has doubled and now represents approx. 60% of our total income;
- Corporate and investment banking revenues have grown on the back of our international expansion and our solid income base. Fee-based activities are the most important part of our business.
GROWTH IN WEALTH MANAGEMENT
According to our 2016-19 strategic plan, consumer banking activities will be focused on consumer credit via Compass Banca, while CheBanca!, which is already well positioned in the affluent and premier client segment, will become one of the pillars of the new Wealth Management division.
GROUP REVENUES BY PRODUCT AND DIVISION (June 2018; €m, %)
Retails includes mortgages, private banking and consumer lending – Corporate includes wholesale and leasing
LENDING AND FUNDING LEVELS HAVE DOUBLED AND ARE WELL-BALANCED
Since 2005, due to the strong drive towards diversification in retail banking, lending and funding levels have doubled, and are much better balanced. In particular:
- Customer loans have doubled, to 41 million euros, and are equally split between corporate and retail, with the latter having grown by 25% over the period to reach 56% of the total
- Funding has also virtually doubled, to reach 49 billion euros
- The net stable funding ratio (NSFR) is comfortably over 100% and the Liquidity Ratio is at 8.8%.
Lending: Retails includes mortgages, private banking and consumer lending – Corporate includes wholesale and leasing
Funding: Retail includes MB bonds sold to retail investors, CheBanca! and PB bonds– Corporate includes MB bonds sold to institutional investors, ECB and interbank deposits
LENDING AND FUNDING BY DIVISION
From 2005 to the present:
- Retail loans (consumer credit) have grown consistently
- Consumer credit volumes have trebled to 12 billion euros, while mortgage loans stand at 8.1 million euros
- Corporate loans fell during the sovereign debt crisis
- On the funding side, bonds account for 19 billion euros (48% of which placed with retail investors); retail deposits now stand at 19 billion euros, and ECB funding at 4 billion euros (TLTRO)
LOAN BOOK BY DIVISION (€m, %)
FUNDING BREAKDOWN (JUNE 2018 €m, %)
Retail lending includes consumer credit, private banking and mortgage loans
Retail funding includes retail bonds, CB! deposits and PB deposits
ENDURING SOLIDITY OF KEY INDICATORS
Over the years we have succeeded in retaining our capital excellence, with asset quality indicators that are unparalleled in the Italian banking panorama and which compare well with the average of other European banks, while our capital solidity ratio has increased to 14% despite the harsher regulatory scenario.
Cost/income ratio stable despite significant outlays to grow business in recent years
NPLs/total loans: just 1/10 of the Italian banking system level*
* Source: ABI
Capital ratios solid even without rights issues (the most recent was in 1998), almost €4 billion euros returned to shareholders*
* Dividends and share buybacks starting from 2005 (including dividend for 2018 financial year)