Mediobanca Board of Directors’ meeting - Financial statements for six months ended 31 December 2012 approved

Price sensitive

Financial statements for
six months ended 31/12/12 approved

Net profit doubled to reach €124m

Core tier 1 ratio 11.8%


  • Net profit for the six months totalled €124m, almost twice the €63m reported last year, but still impacted by impairment charges (€95m in respect of Telco)

  • The result reflects, on the one hand, the marked slowdown in the economic scenario and in business levels towards households and companies, and, on the other, the Group’s prudent lending policy and its ongoing commitment to cost discipline and to maintaining high asset quality ratios. The following performances contributed to the above result:
    • revenues were down 6% Y.o.Y. to €911m: the contribution from trading activity was stable, at €106m, compared with €112m; and the higher profits from equity investments (up from €72m to €86m) partly offset the declines in net interest income (down 7% Y.o.Y.) and net fee and commission income (down 14% Y.o.Y.);

    • operating costs were down 6% Y.o.Y. to €376m, due to a 3% reduction in labour costs and an 8% decrease in administrative expenses;

    • the coverage ratios of doubtful loans showed improvement (NPLs from 61% to 68% and bad loans generally from 39% to 43%), and the cost of risk was stable at 129 bps;

    • the core tier 1 ratio grew from 11.5% at end-September 2011 to reach 11.8%;

    • ordinary ROTE stood at 7%.
  • Divisional results reflect the following performances:
    • good diversification between corporate and retail: net interest income was stable at the Group level over the past six months, with growth on the retail side offsetting the reduction in corporate business; costs progressively declining, driven by the reduction in administrative expenses in retail banking and falling labour costs on the corporate side;

    • ongoing risk profile reduction in CIB: conservative treasury asset investment policy, significant reduction in customer lendings (down 17% Y.o.Y. to reach €16.1bn);

    • high profitability in consumer credit business despite the recession scenario, with revenues and asset quality stable and ROAC at 10%;

    • strong cost discipline and growth in deposits by CheBanca! (up 15% Y.o.Y. to reach €12.3bn);

    • net loss incurred by the Principal Investing division of €52m, on account of a 12% Y.o.Y. reduction in revenues as well as the Telco impairment charge.