Interim financial statements at 31/12/15 approved

Price sensitive

Interim financial statements at 31/12/15 approved
 

Net profit up 23%, to €321m, ROTE up 1 pp to 8%

Growth in net interest income (up 10% to €604m) and fees (up 37% Q.o.Q.)

CET1 12.4%, SREP down to 8.75%

Mediobanca among the top-performing European banks for asset quality:
NPLs down for fourth quarter running (down 12% Y.o.Y, to €1.1bn), accounting for minimal percentage of CET1 (15%), with high coverage ratio (53%)

 

Business model enhanced: higher retail contribution, lower equity exposure

Foundations for growth broadened with acquisitions of Cairn and Barclays Italy 

  • The Mediobanca Group delivered an improved profit for the six months on the back of effective business diversification and high asset/liability quality. In particular:
    • Net interest income was up 10% to €604m, split equally between Q1 and Q2, driven by the RCB division in particular (NII up 14% to €456m) on higher volumes and margins
    • Fee income rebounded by 37% in Q2, driven by IB activity
    • Loan loss provisions fell by 25% to €224m, with the cost of risk down to 136 bps as a result of the continuing improvement in asset quality, with NPLs falling for the fourth quarter running (from €1,220m at end-Dec. 2014 to €1,075m at end-Dec. 2015), and down also as a percentage of total loans (to 3.3%) with the coverage ratio rising to 53%
    • Gross operating profit  rose 16% to €372m, despite the 7% rise in costs (to €420m) due to investments in distribution capacity and the launch of numerous projects, including the advanced internal rating-based (AIRB) model validation process
    • Net profit was up 23% to €321m (31/12/14: €261m), with the €93m gains on disposals of equity stakes worth €295m absorbed almost entirely by non-recurring charges totalling some €72m, chiefly attributable to contributions to the Bank Resolution Fund (€63m)
    • ROTE up from 7% to 8%
    • Capital ratios  reflect further strengthening and are stable at the very best sector levels:
      • CET1: 12.4% phased-in, 13.4% fully phased
      • Total capital: 16.1% phased-in, 16.6% fully phased
      • Leverage ratio: 11.0% phased-in, 11.8% fully phased
    • RCB: up from 10% to 30% of Group pre-tax profit, ROAC increasing from 10% to 16%
      • Consumer credit: net profit doubled to €66m and ROAC up to 18%. Lending volumes continue to grow (up 9% Y.o.Y.), as does net interest income (up 14%); asset quality continually improving, cost of risk down more than 100 bps (to 341 bps)
      • Retail banking: net profit of €5m (as compared with €8m loss at end-Dec. 2014), and ROAC 7%. Total funding up to €14bn, €3.6bn of which indirect funding (31/12/14: €2.1bn; 30/6/15: €2.9bn); fee income doubled to €21m
    • CIB: low asset/liability risk profile confirmed, healthy IB deal pipeline
      • Net profit down from €117m to €75m, following reduced contributions from net interest and trading income. Asset quality remains excellent (bad loans nil), with the cost of risk declining to 26 bps
      • Q2 also reflects a recovery in fee income, up 53% to €99m, driven by M&A and capital market business. Although the weak markets mean some deals might be postponed, the IB deal pipeline for the coming quarters continues to look healthy, as a result of the Group’s versatile business model and geographical diversification
    • PI: revenues growing and further equity stake disposals totalling €295m
      • Increased contribution from Assicurazioni Generali (up from €123m to €138m)
      • Stakes worth €295m sold (making a total of approx. €1.4bn since the 2014-16 Strategic Plan was approved), yielding gains on disposal of €93m
    • Group business model bolstered by recent acquisitions of Cairn Capital and Barclays Italy
      • Cairn Capital: acquisition of 51% of the asset manager specializing in institutional credit mandates was completed on 31 December 2015 and at present the company is consolidated only at the balance-sheet aggregate level, adding AUM of €13.6bn. Cairn Capital is the first step in the creation of the MAAM platform, a project which is synergistic with CIB, reflects low capital absorption and high growth potential
      • Barclays Italy: the acquisition of a selected perimeter of Barclays Bank plc retail business in Italy was announced on 3 December 2015. It represents an acceleration in the growth of CheBanca! and confirms the validity of its innovative, multi-channel business model
      • With these two acquisitions Mediobanca has gained increased visibility in the asset management industry, doubling the Group’s AUM/AUA to approx. €40bn.

Last update: 15/07/2016 - 12:09