Objectives by business area

Wealth Management

MACRO TRENDS

The Italian savings market, among the largest in Europe, offers significant opportunities, due in part to the fact that it is still largely "un-managed."

Challenges	Opportunities
Scenario profoundly influenced by macro (e.g. rising inflation and interest rates, Ukraine’s war, etc.) and idiosyncratic events (SVB, CS, etc.) Increasing demand for bonds	Dissatisfaction with generalist banks’ approach lacking focus Client demand for new products (ESG, Private Markets, Digital Assets) and omni-channel experience (post Covid)
Ongoing margin pressure Increasing regulation (deposit margin and mandate margin contractions, shift to cheaper passive products, etc.)	Market potential offering for player relying on: transparency, fair pricing, low performance fees, fee-only offering Internalize margins by integrating the value chain and adapting asset mix
Changing demographics (e.g. generational wealth transfer, millennial HWNI, etc.) are generating a paradigm shift More knowledgeable clients	Market potential offering for player relying on: transparency, fair pricing, low performance fees, fee-only offering Internalize margins by integrating the value chain and adapting asset mix

WEALTH MANAGEMENT AMBITIONS

Mediobanca’s ambition of establishing itself as a leader in this segment, standing out for its quality, responsibility, innovativeness, and the value of its product offering for Premier and Private clients, and entrepreneurs. Following the strong growth delivered in recent years, there will be a radical change of approach in Wealth Management, creating a unique operator in Italy: Mediobanca’s strengths (brand, product offering, ability to attract bankers) will be applied consistently across the Premier and Private customer segments, generating strong growth and value. Wealth Management will accelerate its repositioning in terms of product offering (liquid and illiquid, based on an “inhouse guided” approach) and services (offering also Investment Banking services) to Premier and Private clients, leveraging on Mediobanca’s distinctive positioning as a Private & Investment Bank and through substantial investments in distribution (with salesforce targeted to increase by 25% to over 1,500 professionals), technology and products.

Highlight

At the end of BP 2023-26 the division Wealth Management will:

Outperform the market in terms of growth in TFAs (which will reach €115bn, +11% CAGR vs +8% for the market), revenues (over €1bn in FY26), and profitability (RORWA +110 bps to 4.0%);
Become a market leader in Italy, closing the gap versus other leading asset gatherers in terms of size and profitability;
Take full advantage of its distinctive potential deriving from:
- Strong focus on HNWI/UHNWI clients (40% of TFAs, 2x listed players’ average);
- Global advisory approach focused on both entrepreneurs and businesses;
- Completion of CheBanca! repositioning with rebranding as Mediobanca Premier;
Become the main growth driver for the Group, its second contributor in terms of revenues and first in terms of fee income.

Learn more about the market context and the specific growth strategies of the Wealth Management division

Corporate & Investment Banking

MACRO-TRENDS

The European Corporate & Investment Banking market, while continuing to reflect a highly challenging environment, still offers attractive opportunities especially for investment banks specializing in advisory business, which are continuing to gain market share because of their increased client focus and flexible business models.

MACRO TRENDS	POTENTIAL OPPORTUNITIES
CHALLENGING ECONOMIC SCENARIO Inflationary pressures, monetary policies tightening, GDP slowdown	Lean organizations continue to outperform bulge-bracket banks Mid-Cap market proving to be resilient and growing with continuous liquidity events of families/entrepreneurs and private equity players Long-standing growth in investments of private capital investors Growth and transformation of new industries (e.g. Technology, Energy Transition)
STRINGENT ACTIONS BY REGULATORS Basel IV, FRTB, pressure to reduce leveraged exposures and	Strong risk management culture and excellent portfolio quality Selectively allocate capital to long-lasting core clients with cross-selling potential
ESG PRIORITIES GAINING MOMENTUM	Support clients in their ESG transition strategies with ad hoc advisory activity Target ESG-driven capital allocation
INNOVATION AS DISRUPTIVE REVOLUTION FOR IBs	New digital technologies to interact with clients Innovation as an accelerator of operational efficiency and synergies across businesses

CORPORATE & INVESTMENT BANKING AMBITIONS

By leveraging the distinctiveness of its business model (leadership in reference markets, strong reputation, lean organizational structure, client-centricity, ability to attract talent, and excellent asset quality) Corporate & Investment Banking division will evolve into a capital-light European model which leverages a synergistic approach with our Wealth Management business.

Highlight

At the end of BP 2023-26 the division Corporate&Investment Banking will:

Increase revenues (to approx. €0.9bn) and profitability (RORWA +60 bps to 1.6%);
Become a stronger, broader and more diversified European platform, with higher non-domestic revenues (up from 40% to 55%) generating more capital-light income (up from 28% to 40%), with advisory business to become the main product in terms of contribution to and growth in CIB revenues;
Strengthen its leadership position by leveraging on the Private & Investment Banking model and exploiting the clear intra-Group potential opportunities (in particular with Private Banking, MA and Arma Partners), confirming its position as partner of choice for medium-sized and large companies in its target markets (Italy, France and Spain);
Become the main source of capital optimization for the Group (RWAs down 13% over 3Y to €17bn) and the second largest contributor by revenues and fees.

Learn more about the market context and the specific growth strategies of the Corporate & Investment Banking division

Consumer Finance

MACRO-TRENDS

The Italian market offers significant growth opportunities: it is less mature than other European economies, with opportunities to capture market shares as traditional banking networks reduce their footprint.

Consumer credit market	Compass targets growth by leveraging specific strength and the longstanding, solid and coherent support of the Mediobanca Group
Growth expected in Italy +3.5% CAGR 23- 26	Extensive and diversified distribution platform, with personal loans new business mostly directly distributed Strong integration of direct network with digital platform to enhance multichannel approach Outstanding scoring and pricing capabilities
Change in customer behaviour	New digital platforms to enhance user experience (instant and effortless operations, onboarding, refinancing) while reducing costs Enrich product range (digital personal loan, BNPL in store and on-line, instant lending) to enlarge client base by quantity and quality Access new markets and valuable client segment with limited investments
Credit cycle shift	Frequent review of acceptance rules and disbursement amount Prudent provisioning with large overlays set aside (>€200m) Cautious pricing, based on strong and granular risk assessment capabilities, and high efficiency (C/I ratio ~30%) determine P&L ample buffer to absorb higher COR swings Hedge part of portfolio with securitization Sell within 18 months the entire NPE warehouse

CONSUMER FINANCE AMBITIONS

By leveraging on its distinctive features (market leadership, high scoring and pricing capabilities, solid asset quality), empowering distribution significantly, direct and digital, and developing innovative products (in e-commerce and BNPL especially), Compass will further improve its leadership through an upgrade of its service model.

Highlight

At the end of BP 2023-26 the division Consumer Finance will:

Increase revenues to €1.3bn, maintaining high profitability (RORWA 2.9%);
Upgrade its leading position in Italy as a multi-channel platform;
Tap new markets and client segments digitally (as opposed to physically);
Implement further derisking policies, with no change to its high efficiency and asset quality ratios;
Confirm its position as the Group’s main source of revenues and net interest income.

Learn more about the market context and the specific growth strategies of the Consumer Finance

Insurance

Virtually all of this division consists of the investment in Assicurazioni Generali (13% ownership), which will continue to contribute positively to revenue and profit creation at Group level, improving stability and visibility.

Highlight

Investment rationale:

Excellent profitability, to be further strengthened through the permanent application of the Danish Compromise;
Low correlation with the macro trends;
High cashflow generation capability;
Value option, guaranteeing the Mediobanca Group available resources that can be used for attractive inorganic growth opportunities.

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