Share

Mediobanca: record revenues and profits in the last 12 months and growing dividend for shareholders

Excellent results in the annual financial year ending 30 June 2024 for the Milanese bank led by Alberto Nagel. All economic and financial indices are growing

Mediobanca: record revenues and profits in the last 12 months and growing dividend for shareholders

Has been a year to remember for Mediobanca. The Milanese bank led by Alberto Nagel closes the 2023-2024 financial year, the first of the new plan, with revenues record for 3,6 billion (+9%) and a Useful netto unprecedented 1,273 billion euros, up 24%. Shareholders will benefit from a increase of the dividend per share, set at 1,07 euros, with an advance already paid and an expected additional balance of a new 385 million buyback plan euros, with cancellation of the shares planned for the 2024-2025 financial year.

The better-than-forecast results push the title of Mediobanca up by 1,9%.

'Sfinancial year 2024-2025, Mediobanca expects an increase in revenues thanks to the growth in commissions, especially in wealth management and in the capital-light services of Corporate & Investment Banking. This growth will be supported by the decline in interest rates, explains a note.

Net interest income will continue to grow, albeit moderately, in a context of falling rates. The cost/income ratio is expected to be 44%, with significant investments in digital and distribution, particularly in wealth management. The cost of risk should be around 55 basis points. Earnings per share are expected to grow between 6% and 8%.

Mediobanca accounts

Over the course of the year, Mediobanca recorded significant growth in revenues, reaching 3,6 billion euros, thanks above all to the 17% jump in "K-light" components. Total Financial Assets (TFA) increased by 13%, reaching approximately 100 billion euros. At the same time, the optimization of weighted assets (RWA) led to a reduction of 7%, falling to 47,6 billion euros.

The main sources of income showed positive results:

  • Interest margin: +10%, equal to 1.985 million euros
  • Commissions: +11%, reaching approximately 940 million euros
  • Insurance: 510 million euros

Il Operating income rose by 12% to 1.813 million euros, maintaining a cost/income ratio stable at 43%. The cost of risk fell to 48bps, while asset quality remained solid, with net NPLs at 0,8% and large overlays of around €220 million.

THENet income reached 1.273 million euros, up 24%, with earnings per share of 1,53 euros (+27%). The tangible book value per share (Tbvps) remained stable at 11,6 euros, while the Return on Tangible Equity (Rote) rose to 14%, up 1 percentage point. The Return on Risk-Weighted Assets (Rorwa) improved to 2,7%, and the CET1 increased to 16,1%, an increase of 20bps compared to the previous year.

Fourth quarter results

In the fourth quarter, Mediobanca recorded revenues of approximately 980 million euros, up 11% compared to the previous year. Net interest income was 492 million euros, and commissions reached a record 279 million euros, an increase of 51% compared to last year, thanks to the recovery of the Corporate & Investment Banking division. Net profit for the quarter was 327 million euros, up 39% compared to the previous year.

Growing dividend and new buyback plan

During the 2023/24 financial year, Mediobanca distributed a total of 1,1 billion euros, equal to 10% of the bank's market value. This figure includes 885 million euros in dividends and around 200 million euros in buybacks.

The board of directors proposed a dividend annual of 1,07 euros per share, equal to a dividend yield of 7,13% based on current prices, with a payout of 70%. The advance of 0,51 euros has already been distributed in May, while the balance of 0,56 euros will be paid in November. The payment will take place on November 20th, with record date on November 19th and ex-dividend date on November 18th.

Additionally, the board proposed a new buyback plan e cancellation of treasury shares for a value of approximately 385 million euros, equal to 3,1% of the current share capital. The exact number of shares to be repurchased will be defined when the budget is approved in September, and up to 80% of the shares purchased may be cancelled.

The divisions

The 2023-2026 Plan showed significant progress in all divisions. The Wealth Management (Wm) saw a growth in TFA of 13%, reaching approximately 100 billion euros, and an increase in Net New Money (Nnm) of 8,4 billion euros. The Corporate & Investment Banking (CIB) confirmed the recovery, with revenues increased by 7% and a significant reduction in RWAs.

In Consumer Finance (Cf), Mediobanca disbursed a record 8,4 billion euros in loans, with a 6% increase in revenues. Insurance (Ins) contributed with revenues increased by 14% to 530 million and net profit increased by 19% to 522 million.

CEO Nagel's comment

“In the 2023-24 financial year the Group was able to achieve the best results ever in terms of revenues (3,6 billion), profit (almost 1,3 billion), profitability (Rote 14%) and distribution to shareholders ( 1,1 billion between dividends and buybacks carried out), promptly launching the main initiatives of the 23-26 Plan", declared Albert Nagel, CEO of Mediobanca. 

And for the future? “The scenario of the coming months is uncertain due to geo-political and macro dynamics and will require the ability to turn an expected volatile context into an opportunity – continues the CEO – Mediobanca is in a privileged position due to the specialization of its model, the approach manager, distinctive product skills, positioning, unique in Italy, among entrepreneurial families. With these peculiarities and through increasingly efficient management of assets and capital, we have begun the second year of the 'One Brand – One Culture' Plan with the aim of being one of the best stories of growth and remuneration for all stakeholders".

comments