“More bank, less shares”. This is how Corriere della Sera anticipates the revolution that Alberto Nagel, CEO of Mediobanca (and as such a major shareholder of via Solferino) is preparing to present first to today's board of directors, then on Friday to the City of Milan: Mediobanca, the parlor par excellence, is cautiously preparing to auction armchairs, sofas and beetles that for two thirds of a century have housed what was once the crème de la crème of Italian capitalism. In its place there will be more room for credit activities, both traditional and electronic, devoted both to the mission of the investment bank and to brokerage in Italy or abroad. Or more: the important thing is that profits are made, not power management, an old vice/habit of the icon company of almost three quarters of a century of Italian finance.
Will it go exactly like this or, at least for now, will it be a half-baked revolution? Curiosity is a lot. Also because it is not the first time that Mediobanca has tried to free itself from the destiny of centaur, the figure of the myth half man half horse to which Enrico Cuccia himself compared him. First there was the conflict between the public and the private sector, bankers' banker and Romano Prodi, then champion of the public under the banner of IRI. Then that between the managers and the shareholders, which culminated in the defenestration of Vincenzo Maranghi. Then came the Milan-Rome duel, namely Nagel and Pagliaro against Cesare Geronzi. In the end, the tangle of uncomfortable inheritances, culminating in the great Ligresti-Fondiaria mess, a jungle of moral traps that risked suffocating Nagel himself.
FROM THE CENTAUR TO THE BANK OF RACE
In short, it could not go on like this, on pain of disaster. It probably matured in those days, while the CEO was dealing with the shareholder and debtor Ligresti family and Renato Pagliaro was managing the first steps in the normalization of the disastrous RCS, the genesis of the new Mediobanca, as Nagel understands it: on the one hand the banking business, the only one that in these difficult years has allowed Mediobanca to present a profitable balance sheet and in which it is now necessary to invest even more. On the other, the safe, already impoverished, in which the last gems of the empire are kept, which for years was more a source of trouble and portfolio devaluations (about one and a half billion in the last five years) than a harbinger of good business. Presented like this, the operation really looks like a revolution. But Piazzetta Cuccia doesn't like to talk about the Big Bang, if anything about a new step towards a generic mutation to be managed in the name of continuity. You don't cut a centaur in half in one day to make a thoroughbred out of it. Especially when the thoroughbred does not enjoy great prestige with bookmakers on the stock market.
Indeed, if Mediobanca is analyzed in the light of the criterion of the sum of the parts, it emerges that the sum of the equity investments in the portfolio is worth more than the capitalization of the institution. That is, at present the market attributes zero value to the ability of the banking business to generate profits. A paradoxical judgment but one that Nagel will still have to deal with. What possibilities will Piazzetta Cuccia have in an increasingly complex competitive arena, moreover no longer limited to national champions, to create more value for shareholders? And with what moves?
THE INSTITUTE FOCUSES ON GOOD FOOD
The trump card for Nagel is Cib, which stands for Corporate & Investment banking, or the heart of the system which between 2005 (first business plan) and 2012 saw revenues grow by 80% (from 522 to 933 million) and which today brings 70% of profits to the group against 45% of revenues. It is from here that Nagel can get the best results. On its side, moreover, Cib already boasts some flattering marks on its report card: the increase in the operating result (+84%), the increase in loans (from 13,8 to 22 billion) without having generated non-performing loans, which remained at 0,3 .2%. The drawback remains the low incidence of foreign trade, which in eight years has gone from 2,4 to 1%. In short, the basics are there. But to enter the Serie A of big business, more energy is needed: having a Core tier 12 of XNUMX% (at the European top) is not enough to meet regulatory commitments without holding back from the development of industrial activity. Hence the need to raise cash with equity investments. And the faster you do it, the more positions you can conquer in a rapidly reorganizing market.
WEDDING BETWEEN WHAT A BANK! WHAT ABOUT COMPASS? NO, ONLY SYNERGIES
Much attention will be devoted to the retail division which includes: Compass, with a consumer credit portfolio of 9 billion; 50% of Esperia, the private banking jointly owned with Mediolanum. Finally, Che Banca!, an indisputable marketing success which, with its flow of deposits, ensured the liquidity necessary for the Mediobanca system even in times of greatest tension on the markets but has not yet reached balance after five years. Hence the rumor about a possible integration between the bank almost exclusively online and Compass itself, which has already been denied: there will be synergies between the two companies, but not a merger. Perhaps too little to convince analysts who are still awaiting news on Banca Esperia, an initiative that has never achieved results in line with initial expectations, unlike Banca Generali.
PORTFOLIO: ONLY GENERALI IS NOT FOR SALE
The mother of all issues, of course, remains the ordering of Mediobanca's portfolio. Or rather, of what remains, because the silent revolution has partially taken place. From 2004 to today, investments for 3,3 billion have been sold: Fiat, Ciments Français, Commerzbank, Fonsai, Mediolanum, Pininfarina, Intesa San Paolo, Ferrari and Finmeccanica. Today, however, it is speeding up a bit On all fronts. Every player on the team, to use football language, is salable if market conditions exist: Telco-Telecom, Pirelli, RCS. But, as in every team, there is a non-transferable player: Generali. But even here, partly by choice and partly out of necessity (the Basel criteria forbid excessive concentration on a single participation) it will be necessary to reduce the share of 13,2%, currently around 10%.
For Mediobanca, but not only, this is an epochal break with the tradition of the "Northern galaxy" on which rivers of ink have been spent and which today is consigned to history. This is how a process that is neither rapid nor linear but which, thanks to the country's emergency, this time seems truly unstoppable: the Third Republic, in the world of credit, begins its journey on Friday.
