In the space of less than a decade, the banking sector worldwide and in Europe in particular, has had to tackle a financial crisis, which then trickled down to the real economy, which has been unprecedented in its severity.
The European regulators, in drafting regulations to prevent such phenomena from being repeated in years to come, have required banks to increase their provision of capital, a fact which, along with the current macroeconomic conditions, has made it hard for banks to achieve levels of profitability comparable to those delivered in the past. For this reason, the sector as a whole has embarked on a revision of strategy, with a view to concentrating operations on those businesses which, in the current regulatory scenario, offer the best opportunities to achieve profits on a reduced allocation of capital.
Against this backdrop, with the approval of its 2014-16 strategic plan on 20 June 2013, the Mediobanca Group targeted the gradual disposal of its equity investments (which use up huge amounts of capital and generate volatility in earnings), directing growth towards highly specialized, low capital absorption and high revenue-generating banking businesses.
The plan was not so much an abrupt change in terms of strategy for the Mediobanca Group as rather the fulfilment of the process of development launched in 2003.
Even then the current management team had promoted the growth of its banking businesses by:
- Enhancing the international dimension of its CIB operations: with branch offices opened in Paris (2004), New York (2006), Madrid (2007), Frankfurt (2007), London (2008) and Istanbul (2013)
- Developing the retail and consumer credit businesses: the acquisition of Linea in 2008 doubled Compass’s balance sheet, helping it to become one of the three leading operators in Italy; the same year saw the launch of CheBanca!, the multichannel bank which rapidly acquired a prominent position in the domestic market.
Mediobanca aims to be: