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 plan 2019-2023 sees further growth for the Group and higher returns for all its stakeholders, on the strength of our highly effective and distinctive business model, factors will enable us to outperform despite what is expected to be a challenging economic and regulatory scenario for the whole financial sector.

 

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 2.2 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)

 

FY19 BANKING REVENUES BREAKDOWN

 

reve 1
 
 
 
 

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 1.6 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 2019; €m, %)

 

reve 2
 
 
 

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 44 million euros, and are equally split between corporate and retail, with the latter having grown from 25% to 55% of the total
  • Funding has also virtually doubled, to reach 51 billion euros
  • The net stable funding ratio (NSFR) is comfortably over 100% and the Leverage Ratio is at 8.4%.
loan 1
 
 
 
 
 

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 13 billion euros, while mortgage loans stand at 9 million euros
  • Corporate loans fell during the sovereign debt crisis
  • On the funding side, bonds account for 19 billion euros (47% of which placed with retail investors); retail deposits now stand at 22 billion euros, and ECB funding at 4 billion euros (TLTRO)

 

loan by division
 

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

 

cost income
 
 
 

NPLs/total loans: just 1/10 of the Italian banking system level*

 
bad loan
 
 
 
 
 

* Source: ABI


         Capital ratios solid even without rights issues (the most recent was in 1998), almost €4 billion euros returned to    shareholders*

 

capital ratio
 
 
 
 
 

* Dividends and share buybacks starting from 2005 (including dividend for 2018 financial year)

 

Last update: 13/11/2019