Net profit down for Mediobanca but the result beats analysts' expectations e the stock soars on the Stock Exchange positioning itself at the top of the Ftse Mib with an increase of 4,67%.
In detail, Piazzetta Cuccia closed the first quarter of the 2018-2019 financial year with a Net income equal to 245,4 million, down by 18,4% compared to the same period of 2017. The decrease, explains Mediobanca, is due to the absence of capital gains relating to the sale of shares (around 89 million in the first quarter of 2017-2018 in following the sale of the stake in Atlantia). The result, as mentioned, clearly beats the expectations of analysts, who had forecast a profit of 220 million.
Moving forward with the financial parameters, revenues rose by 6,6% to 637,7 million (630 million the consensus estimate), with interest margin at 344,1 million (+3,7%) and commissions and other income net to 155,1 million (+12,1%).
Structure costs also grew, settling at 271,4 million (+6,1%) for a cost/income ratio that fell to 42,6%. L'operating profit is at 308 million, up 7% on an annual basis and against expectations for 285 million. Loan loss provisions amounted to 58,8 million (from 54,6), with a stable cost of risk at 56 basis points.
Through a note, Mediobanca explains that the equity consolidation of Generali and minor shareholdings contribute to the result for 97,7 million (89,7 million last year).
Generali “is a very important participation for us for the contribution to the economic result of Mediobanca – stated the CEO Alberto Nagel – We are very careful and we support both organic and non-organic net profit development options with the obvious caveat that our hope is that this growth will in any case not alter Generali's characteristic of being a champion with Italian bases and roots but with a very international presence'. Generali, Nagel reiterated when answering a question about the rumors that the large shareholders of the Trieste-based company are in favor of an international acquisition, “has Italian roots and anchorages, but a business that has been and will have to be very international”.
Going back to the quarter, loans rose by 2,8% compared to June to €42,3 billion, with impaired assets down to €827,9 million (from €842,1) with coverage at 58,2%. The ratio of gross non-performing loans is 4,5% (from 4,6%) and 2% (from 2,1%) for net NPLs. The net suffering they amount to 112,7 million, with a coverage ratio of 79,4%. The group's total assets grew in three months to 74,8 billion from 72,3 with "net new money" of 1,9 billion in the quarter. Deposits amounted to 49,6 billion (+1,8%). The liquidity coverage ratio is 161%, the net stable funding ratio is 108%.
Finally the individual divisions: wealth management recorded a profit of 17 million (from 15,5 in the first quarter of last year), consumer credit contributed 89,7 million (+12%), corporate & investment banking with 67,8 million (down from 74,5 "solely due to the lower write-backs on corporate loans"), principal investment with 98,5 million (from 170,5) "even in the absence of capital gains", while the loss of holding decreased to 27 million (from -38,5).
Piazzetta Cuccia then explains how much the surge in the spread affected the accounts. In particular, the widening of the differential between BTPs and Bunds "cost" Mediobanca only 2 basis points in terms of common equity tier 1 in the first quarter of the 2018-2019 financial year. Ul Cet1 phase-in is 14,18% (fully loaded at 13%). The slight decrease compared to 14,24% in June, explains the note, "is due to the introduction of IFRS9 (approximately one basis point) and the lower reserves from valuations of "hold to collect and sale" securities, of which only 2 basis points linked to Italian government bonds”. Mediobanca holds a 2,8 billion BTP portfolio (with an average duration of 2,5 years), which accounts for 40% of the Cet1.
Impossible not to make any reference to the pact. Nagel answered a question about thehypothesis that the large partners of the institute form a new pact "light" consultation after the dissolution of the current shareholders' agreement at the end of the year: "I don't think it is the management's job to make suggestions or recommendations on how our shareholders want to organize themselves". However, the CEO recalled that in recent years "both the shareholders of the pact and institutional investors have favored this type of development of the bank and change of business profile". “Whether or not they organize themselves into a more or less light pact – he added – we will continue to work with the approach you know and which both families of shareholders have supported and favored. From this point of view, nothing changes in the management's action”.
