Mediobanca puts 2.5 billion on the table between coupons and buybacks

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Mediobanca's CEO Alberto Nagel called it a "counter-current" plan. Because even in a difficult context, which is still expected to worsen, it promises growth "with opportunities in all businesses" and investments in human capital and technology. Over the course of the plan – four years to align it with the expiry of the board – a staff increase of more than a thousand units is planned, with 400 fixed hires in the group workforce which will increase from 4,800 to 5,200 units. And with 250 million resources to focus on innovation. All with the focus on maximizing return for shareholders, managing excess capital more flexibly. Between dividends (1.9 billion) and buy-back (from 300 to 600 million), the remuneration of shareholders will increase by 50% compared to the previous four-year period, reaching 2.5 billion. The coupon will increase from 47 cents per share to 60 cents at the end of the period, with an increase of 10% for the first year and 5% for the following years. The repurchase of treasury shares, which will be canceled, will be carried out up to a maximum of 2% per year and calibrated so as to keep Cet1 at 13.5%, below 14% today.

From now until 2023, revenues are expected to rise by 4% on an annual average to reach 3 billion. Earnings per share will also increase by 4% a year, while the return on tangible capital should increase from 10% to 11%. The area where the greatest development is expected is that of wealth management, where the return on allocated capital (Roac) will reach 25% (today it is at 16%). In this area the staff will increase from 900 to 1,400 professionals. Revenues are seen growing by 8% per year to 700 million. Already today, wealth management is the primary source of group fees.

The consumer banking / consumer credit area will maintain a substantially stable Roac of 28-30%, with an expansion of the network that aims to occupy the "physical spaces" left free by the banks of the closing banks. Organic growth in revenues of 3% per year at 1.1 billion, without taking into account the Indonesian acquisition, which is not yet complete.

Investment banking will increase the return on allocated capital by a point from 15% to 16%, + 6% per year in revenue growth to 800 million. The objective is to become the reference point for Italian medium-sized companies and the strengthening in Europe, particularly in the capital market, to "confirm itself as a privileged interlocutor of medium-large companies in the three countries of reference, Italy, France and Spain". Particular attention to the M&A, following the model of the acquisition of Messier Maris, a financial boutique that is the third largest business bank in France. The strengthening in France, according to the CEO, will lead to expand advisory activities also in neighboring countries, given the importance of the transalpine corporate market.

For Generali, the only "stable" shareholding in the portfolio, the forecast to file the 13% quota disappears, since there are no more regulatory pressures. However, the idea remains of maintaining the capital "reserve" to draw on large-scale transactions involving Mediobanca, without excluding the possibility of accompanying the subsidiary in any transactions.