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29 May 2023

Mediobanca eyes retail expansion, H1 profits jump

By Agencies

Mediobanca, Italy's best-known merchant bank, posted a 21.8 per cent rise in interim net profit on Friday and said it would strengthen its investment banking business in Europe while developing a retail network.

It said net profit should rise to EUR1.4 billion (Dh7.9bn) by the end of its 2009-2011 plan and added half-year profits were helped by increased return on investments and a general increase in business.

The bank, long at the heart of Italian corporate finance, said it aimed to become a Europe-wide player in investment banking and targeted total income of EUR1.3bn (Dh7.35bn) in 2011 from this unit.

"Despite the difficult earnings and financial scenario, the plan sets challenging growth objectives," said Mediobanca, which said in September it had no direct or indirect exposure to the US sub-prime mortgage sector, which has caused huge losses at some US and European banks.

The bank said it would stick to a 75 per cent payout for shareholders and could launch further buyback programmes.

In retail banking, where the traditionally secretive Mediobanca has scant high street exposure, it said it aimed to become "a benchmark on the Italian retail market over the medium period", with both online and branch offers.

Analysts had been expecting Mediobanca to push into retail, along with expansion of its corporate banking expertise.

It said in a separate statement that net profit in the six months ended December 31, 2007, was EUR640.5 million (Dh3.63bn), while net interest income rose 23.1 per cent to EUR945.8m (Dh5.35bn).

Shares were down 0.49 per cent at EUR12.23 by 12.30pm GMT as the DJ Stoxx index of European banks eased 0.69 per cent.

The investment bank, which derives nearly half its earnings from wholesale banking, said the net asset value of strategic investments, including insurer Generali and publisher RCS Mediagroup, was stable at EUR6.4 billion (Dh36.2bn).

It holds a 15.64 per cent stake in Generali and 14.2 per cent in RCS Mediagroup. (Reuters)