Strategy and evolution
In 2003 we embarked on a period of profound change, transforming from an equity holding company to become a group of highly specialized banking businesses. We are focusing on a business model that offers higher returns for a lower capital outlay, while retaining our prudent approach to risk management.
Investment banking, consumer credit, asset management and private banking are the different areas which make up our Group and contribute to its results. To date these activities have been complemented by our equity investment portfolio, which in recent years has seen some major disposals. This route was embarked on for the first time in 2003, was confirmed in the 2013 business plan, and has been a hallmark of our recent development.
In 2003 we decided to simplify our Group structure and concentrate on highly specialized and for the most part fee-based banking activities. This approach improves the Group’s profitability and capitalization, thus ensuring that the business is sustainable over time, while at the same time makes our business easier to understand in a market which traditionally penalizes financial companies. The 2016-19 strategic plan, approved in November 2016, marks the completion of this strategic repositioning.
Development of the Wealth Management division, the creation of which was announced in the 2016-19 strategic plan, is now a priority for our Group.
The purpose of the Basel accords is to avoid any more financial crises. As such, they set rules on bank capitalisation, which helps to secure their operations.
OUR GROWTH STRATEGY
The 2016-2019 strategic plan marks an acceleration in our strategic repositioning process with the aim of turning Mediobanca definitively into an operator which is geared towards value creation in the long term.
We see substantial growth in high-profitability banking activities, while we step up the disposals of our equity investments. These stake sales will allow us to free up resources to be ready to take possible acquisition opportunities. This is especially important in view, inter alia, of the stricter capital solidity requisites under the Basel III regime.
A fundamental part of the plan is the establishment of a Wealth Management division, which entails the transformation of CheBanca!, set up in 2008 as the first native multi-channel bank in Italy, to dedicated wealth manager serving the affluent and premier client bracket. This new division will also leverage on the companies recently acquired by the Group.
The 2016-19 strategic plan continues and steps up the work commenced with the 2014-16 plan, which represented a turning point in the impetus it gave to the equity investment disposal process. Equity stakes use up large amounts of capital against a backdrop of increasing volatility on financial markets, which is why we decided to concentrate on highly specialized banking activities, which absorb less capital and provide better opportunities for high returns.