Comes to life new 2019-2023 Mediobanca Plan signed by Alberto Nagel. Four cornerstones of the document presented today, 12 November, in Piazzetta Cuccia: a new shareholder remuneration policy – 2,5 billion in four years (+50%) –, openness towards new acquisitions and an improvement above expectations of all the main financial parameters of the group thanks to a strong development of wealth management. Generals? Confirmed presence and no cut-off at the quota, despite the fact that the bank's new structure raises more than one question about the future.
Compared to the previous plan, Mediobanca operates in a very different context: outside Unicredit, inside Leonardo Del Vecchio which last November 6 is rose to 9,889% of the capital with the possibility of reaching, ECB permitting, up to 20%.
MEDIOBANCA PLAN: DIVIDEND INCREASE AND BUYBACK
From the 2020 to the 2023 the remuneration of Mediobanca shareholders will grow to 2,5 billion. In percentage terms, we're talking about a 50 percent increase. They will contribute to this amount 1,9 billion in dividends and a treasury share buyback and cancellation program of 300-600 million.
As for the coupon, in 2020 the increase will be 10% to 52 cents per share. In the following years and until 2023 Mediobanca will instead increase the dividend by 5% until it reaches 60 cents per share.
Over the plan is also planned buyback up to 2% of the capital annually for a total value of between 300 and 600 million, with the aim of stabilize the phase-in CET1 ratio at 13,5% annual.
MEDIOBANCA PLAN: NEW ACQUISITIONS AHEAD
Over the next four years "as happened over the course of the last plan", underlines Mediobanca, the company will continue to evaluate “external growth opportunities through acquisitions".
Within the document, the group explains that "targets of interest will be companies that can accelerate the growth process in the typical business areas of the Mediobanca group with preference for businesses with low capital absorption and high fee content. Enabling factors will also be cultural compatibility and the ethical approach to business. The acquisitions will respond to the value creation criteria that have always been followed by the group”.
For shareholding in Generali, the only "stable in the portfolio", in the new plan Mediobanca no longer envisages limiting its 3% stake (today it is 12,91%), as instead had been feared in the two previous plans. However, the Trieste company will remain an available resource that can be activated "in the event of growth operations", reads the note.
MEDIOBANCA PLAN: REVENUES AND PROFITS ON THE GROWTH
As of 2023 the total financial assets will rise by 8% to 83 billion euros, while i revenues they are expected to grow by 4% to 4 billion thanks to the development of wealth management (+8%) and Corporate & Investment Banking (+6%). L'earning per share will rise to 1,10 euro (+4%), the Red (return on tangible capital) is estimated to be up 10 to 11%.
MEDIOBANCA BETS ON WEALTH MANAGEMENT
Driving the group's results will above all be the development of wealth management, which will reach the levels of Corporate & Investment Banking in terms of contribution to group revenues and profitability, becoming "the first contributor in terms of commissions". For this area Mediobanca expects that return on allocated capital (ROAC) will rise from 16 to 25% and the assigned staff will grow from 900 to 1.400 professionals, absorbing most of the investment in human resources that will affect the whole group. In this context the bank underlines the willingness to reposition the CheBanca brand upwards! “as a privileged operator for the innovation and sustainability of the service model for “affluent” customers.
Speaking of the other areas: Corporate & Investment banking will grow by 6% on average per year and Consumer banking by 3%. Principal investing, whose weight is largely due to the stake in Generali, on the other hand "will confirm its positive contribution to the group with revenues growing by 3% per year".
In Piazza Affari, after the presentation of the plan, the Mediobanca share rose by 1,29% to 10,57 euros.
