“Or Mediolanum or the Middle Ages”. Get used to the next Banca del Biscione campaign which, as usual, will have Mr. Ennio Doris himself as a testimonial, more energetic than ever just a few days before his birthday. Because on July 3 mister Mediolanum turns 71, perhaps in the company of his partner and friend Silvio Berlusconi. “I don't know yet – replies Doris – last year he came to my party and sang until late at night. We see each other shortly, Silvio and I. And on those occasions we talk about football. And of music”. This year, however, you could talk about business: maybe Fininvest might want to sell. “I don't know. I don't think my partner is a salesman. But if he wants to do it, I am the buyer ”. Thus begins the meeting with Ennio Doris, as usual full of ideas and initiatives, convinced as he is that he has created the "Apple of the savings system", capable of combining the advantages of electronics (which cuts costs) and personalized approach, via promoters (“because for the most important operations, those that bring added value, one needs a physical interlocutor”).
In Mediolanum, in case Berlusconi sells, you are the buyer. And in Mediobanca, on the other hand, are you a seller?
"Absolutely not. We remain and we will be part of the new pact”.
Yet it was thought of a cooling of your relations. Wasn't it you who declared the stake in Esperia that you control together with Mediobanca as "less strategic"?
It is true. Esperia is less strategic for us than it used to be, because then we weren't present in the wealth management market, while today our private banking is a consolidated reality. But that doesn't mean we're salespeople. Private banking is an extremely interesting sector, if only for one reason: it does not absorb capital”.
Yet you have not bought, unlike your competition, wealth management companies in tax havens.
“That's right. I prefer to invest in Germany and Spain”.
Perhaps because the fact of being Berlusconi's partners affects you? Your presence in Montecarlo would arouse more than one curiosity, don't you think?
"I agree. But we wouldn't have gone there anyway: we don't want our customers to take any unnecessary risks. We are a system bank”.
In what sense?
“After the outbreak of the Lehman crisis, we not only kept our clients safe from the US bankruptcy, paying the price for the failed bonds with money from my family and Fininvest. But we have guaranteed liquidity to Italian banks. In those days we invested more than 7 billion in bonds of the Italian banking system”.
Yet now you challenge the traditional bankers under the banner of "either Mediolanum or the Middle Ages". But are all your competitors ruins?
"Please, don't make me say it. But the banking system deserves a reflection”.
Let's do it.
“The economic crisis started at the banks and is now returning to the banks. The reasons are many. The shock wave of the credit crisis has been transmitted to bank customers. Insolvencies increased which, in turn, affected banks' profits. In the meantime, to withstand the impact of the crisis, rates have been kept low but this has affected the profitability of the system. Hence a, shall we say, economic crisis which can be corrected in the short term because this year fewer provisions will be made and rates are rising. Then, however, there are the structural problems”.
What are they?
“First of all, Basel 3 provides for more controls and more rules to respect. As a result, costs rise because banks will have to hire new specialists. Second, the capital increases will dilute earnings."
There's more?
"More. Because all of this coincides with the explosion of the Internet. The diffusion of electronic banking is discounted, with a significant effect on commissions. Cost savings, in return, are limited if you can't affect personnel. In short, revenues drop immediately, costs take time. But the revolution goes fast. Till where? In Northern Europe, customers who do not use the Internet now account for 14 percent of the total”.
But Italy is not Scandinavia…
“It will take a few more years, but the trend is there. In short, for 500 years the bank model was based on the head office-branches relationship. One was all the stronger the more branches it had under control. Today the model has changed”.
And you understood it in time. Real?
“I was lucky enough to create the bank in '97, when certain trends were already on the horizon. Had they given me the license a couple of years before, I would have made some mistakes that I didn't do”.
Others have preceded you. There are robust online banks around the world. Indeed, for Italy.
"Real. But I would like to point out that electronic transactions, not only in Italy, are limited to the simplest operations, with a lower added value: withdrawals, deposits, payment of bills and so on. But when one has to make an important decision, take out a mortgage that commits him for ten or twenty years, he wants to talk to a real person. In short, he wants a physical interlocutor. It is no coincidence that in our call centers there are only employees with a bank contract, who do half an hour of training every day to be able to respond to customer needs".
In short, man plus machine.
"Perfect"
More a very aggressive model. Can you tell me how you make money on your deposit account by offering 3,5% to customers?
“Yes, 3,5 which corresponds to 2,55% net. It's simple: we get lost. It is a promotional operation which, at the beginning, involves a cost. But our bet goes far beyond the deposit: the customers we have won over with the Freedom account today have placed 35% of their savings in our management, an important sector for us".
Yeah, maybe too relevant. Savings in Italy stagnate…
"But it's not true! On the contrary, it increases. Yes, I read the stats too. But those only measure fear, the anxiety of not making it. Not the collective behaviors. But does he know that after Lehman, out of 100 state-owned companies who intended to change cars, 73 gave up immediately after the crack? They were people who risked neither their job nor their income. But, instinctively, she pulled back.
And he saved more.
"Yes, it happens to us, but it also happens in Spain".
Do you think the asset management industry is ripe for a season of mergers and acquisitions?
“If it were privately controlled, the restructuring would have already taken place. The activity has become much more expensive and demanding also due to the new rules established by Mifid and its surroundings. So more investment is needed. But the banks' reaction times are different. In the meantime, the small networks of promoters are finding it increasingly difficult to find buyers"
Do you think there is a future for independent consultants?
"No. People are used to paying the lawyer, not the consultant”.
But habits change. Or not?
“I had a bad experience in Germany. There we made agreements with a network of independent consultants”.
And how did it go?
“I ran away in horror. Those are people who advise on their own portfolios. The only thing that matters is maximizing commissions by bidding the companies to the top. The real guarantee for the customer is the transparency guaranteed by large structures that put their face in it”.
As he does: "Either Mediolanum or the Middle Ages". And this time he will also say it in Spanish. In German, he hasn't learned it yet.
