Mediobanca closes the first half of the 2016-2017 financial year with results above expectations: net profit up 30% to 418 million euro, revenues at an all-time high of 1,07 billion (+6%) and operating profit improving by 14% to 425 million.
The group also recorded a cost of risk decline of 34 basis points to 102 bps, to pre-crisis levels and an improvement in the Texas Ratio to 15%. The interest margin grew by 5% to 636 million, driven by consumer credit (+13% to 408 million) which is equal to 65% of the group margin.
Net commissions rose by 4% to 237 million thanks to the greater contribution of Wealth Management (+43% to 90 million) which, by consolidating the acquisitions of Barclays and Cairn Capital, produces around 40% of the group's commissions. Costs are almost stable on a like-for-like basis (+1,2%) and grow by 10,4% to 464 million, reflecting the consolidation of the acquired companies.
At the divisional level, Compass stands out with a net profit of 123 million euros (+75%), the best half-year result ever for the consumer credit company. Principal Investing reported a profit of 242 million (+5%), with a contribution almost unchanged from Generali at 134,7 million from 138,4 million. In terms of assets, the Cet1 'phase-in' index improves to 12,3% from 12,08% as at 30 June and the Total Capital Ratio rises to 15,74% from 15,27%.
Loan loss provisions fell by 18,1% in the first half (from €224,4m to €183,7m) reflecting a generalized improvement in the risk profile of the portfolio, particularly in Consumer Banking (from €184,1m to €159m) and in the Wholesale Banking (1,6 million write-backs against 18,5 million adjustments). Net impaired assets remain at minimum levels with the incidence on total loans decreasing further from 2,7% to 2,5% and coverage ratios increasing from 54% to 55%. Net profits from the securities portfolio include the capital gain on Atlantia (110,4 million) and other minor ones.
Conversely, write-downs of other financial assets (7,9 million against 12,8 million) mainly reflect adjustments to securities in the banking book (5,8 million). Among the extraordinary items, the 50 million euro extraordinary contribution to the bank resolution fund. Loans to customers increased from 34,7 to 37,6 billion due to the purchase of former Barclays mortgage loans (2,4 billion) and the growth of Consumer Banking (+250 million) and Specialty Finance (+280 million).
The increase in non-performing loans (from 148,5 to 176,5 million) discounts the entry of Barclays with 26,9 million of past due loans and unlikely to pay. The item does not include the NPL portfolios acquired which grew in the six months from 70,5 to 76,7 million.
Net non-performing loans decreased to 167,8 million (184,6 million) and represent 0,45% (0,53%) of total loans. Deposits rose from 46,7 to 49,7 billion due to the former Barclays contribution (2,9 billion) which brought retail deposits to 13,8 billion, equal to 28% of consolidated deposits.
Assets under management in Wealth Management, including direct deposits, increased from 42,2 to 50,6 billion. Assets under management/administered grew from 17,4 to 21,3 billion, divided between Private Banking (14,4 billion against 13,5 billion), the Affluent & Premier component (CheBanca!) which rose from 3,9 to 6,9, 2,8 billion after the purchase of Barclays (2 billion) and Cairn funds (unchanged at XNUMX billion).
