The Group will significantly increase the remuneration to its shareholders over the time horizon covered by the Plan, for a total of up to €3.7bn to be distributed in 3Y (FY 2024, 2025, 2026), about 70% higher than the distributions made in the previous 4Y (FY 2020, 2021, 2022, 2023).
The increased distribution derives from the Group’s enhanced earnings generation capacity and the implementation of an asset growth policy focused on capital-light segments.
This new distribution policy will enable a CET1 FL of above ~14.5% to be maintained over the Plan horizon, which is sufficient to:
- Maintain one of the best ratings in the domestic market and consolidate Mediobanca as one of the best capitalized European banks, a differentiating factor in WM and CIB business;
- Maintain a buffer of approx. 100 bps for possible M&A opportunities to support the Group’s business development, calculated based on a minimum CET1 FL of 13.5%.
1) CET123 FL 15.4% including: ~100bps of permanent benefit from Danish Compromise, Arma acquisition, Revalea disposal
Over the three years, the Group will maintain a cash dividend payout ratio of 70% of earnings, and will introduce payment of an interim dividend starting from May 2024. These distributions will be complemented by share buyback and cancellation schemes involving a total of €1bn in 3Y, with the quantity to be decided annually. More specifically, subject to annual authorization by the ECB and approval by shareholders gathered in Annual General Meeting, and conditional upon CRR III Article 471 being approved definitively (under which application of the “Danish Compromise” will become permanent):
- Cash dividends worth a total of €2.7bn will be paid in 3Y, in application of a cash payout ratio of 70%; with the introduction of the interim dividend, part of the payment will be brought forward to May of each year (equal to 70% of the profits generated in the July-December period) with the balance to be paid in November (equal to 70% of the profits generated in the January-June period); overall, the dividends distributed in the FY 2024-26 three-year period will total €2.7bn, 40% higher than the €1.9bn distributed in the previous four-year period (FY 2020-23);
- A new share buyback and cancellation scheme will be implemented for a total amount of €1bn over the Plan time horizon, starting from October 2023, with the amount to be determined annually based on organic growth; while the share cancellation will involve approx. 80% of the acquired shares.
This distribution policy, subject to ECB monitoring and/or authorization, will be revised if the CET1 FL falls below 13.5%