Strategy and transformation
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 marked 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 saw substantial growth in high-profitability banking activities, while we stepped up the disposals of our equity investments. These stake sales allowed us to free up resources to be ready to take possible acquisition opportunities. This was especially important in view, inter alia, of the stricter capital solidity requisites under the Basel III regime.
A fundamental part of the plan was the establishment of a Wealth Management division, which entailed the transformation of CheBanca!, set up in 2008 as the first native multi-channel bank in Italy, to dedicated wealth manager serving the affluent client bracket, and the institution of Mediobanca Private Banking for private clients. This new division also leveraged on the companies recently acquired by the Group.
The 2016-19 strategic plan continued and stepped 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.
The plan 2019-2023 sees further growth for the Group and higher returns for all its stakeholders, on the strength of our highly effective and distinctive business model, factors will enable us to outperform despite what is expected to be a challenging economic and regulatory scenario for the whole financial sector.
Our focus and distinctive positioning in highly specialized, highly profitable market segments where growth is driven by long-term trends, coupled with our strong capital resources and ongoing investment in talent, innovation and distribution, will allow the Group to deliver impressive performances in terms of growth in revenues, earnings and shareholder remuneration, to the satisfaction of all our stakeholders, while preserving one of the best risk/return profiles in Europe.
A SUSTAINABLE COMMITMENT
In order to grow as we are proposing, we have chosen to invest in the establishment of solid foundations with a view to managing our business sustainably. For this reason we have drawn up some guidelines in specific areas, such as: tackling bribery and corruption, protection of human rights, diversity and equal opportunities, protecting the environment and responsible investments. Our commitment in these areas is to create and protect value for all our stakeholders.