BoD Mediobanca - Financial statements for 9M FY 2018-19 approved (as at 31/3/19)

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Financial statements for 9M FY 2018-19 approved (as at 31/3/19)

Results for 9M confirm Mediobanca growth path
in terms of revenues (up 5%), GOP (up 7%) and ROTE (10%)

Strong growth in TFAs, to €68bn (up 8 % YoY and up 5% QoQ),
with net new money (NNM) in 9M of €5.1bn – €1.7bn of which in 3Q
– and solid growth in loans (up 8% YoY and up 1% QoQ to €43bn)

Recent partnership with Messier Maris et Associés enhances
Mediobanca’s distinctive features within the European financial
panorama: ability to generate value and growth while maintaining
a low risk profile and robust capital levels

Results for the nine months include:

  • Growth in funding volumes (up 8% YoY and up 2% QoQ, to €52bn), with average cost of funding at 80 bps, stable vs end-Dec. 2018 and down 10 bps since end-June 2018
  • Growth in revenues (up 5% YoY, to €1,884m) with:
    • Net interest income up 3% YoY, to €1,047m, due to solid performances in both assets and margins, consumer credit in particular
    • Net trading income up 21% YoY, to €151m, driven by growth in client-driven capital market solutions activities
    • Fee income stable at €462m, with increasing contribution from WM and CIB advisory offsetting the lack of ECM deals in a European market unreceptive in the first three quarters
    • Profits generated by equity investments up 10% YoY, to €225m
  • 3Q saw a reduction in revenues (down 5% QoQ, to €607m) in a scenario impacted by contrasting factors: markets bounced back, but caution by central banks, low levels of corporate activity, and persistent risk aversion by households
  • GOP increased to €870m, up 7% YoY, as a result of the low cost of risk of 51 bps (NPLs/total loans decreasing: gross 4.2%, net 1.8%; Texas ratio down to 12%)
  • Net profit €626m, ROTE 10%
  • Capital, funding and liquidity ratios confirmed at high and sustainable levels:
    • CET1: 14.3%  up approx. 40 bps since end-December 2018, in part due to benefit deriving from validation of AIRB models for CheBanca! mortgage loans, with application of Danish compromise confirmed 
    • LCR: 186%;  NSFR:  107%
  • Good news from regulation:
    • SREP: CET1 confirmed at 8.25% for 2019
    • Extension to Danish Compromise for Assicurazioni Generali stake until 2024 (thus avoiding 120 bps deduction from CET1 due to take effect from 2019) 
    • MREL target requirement set at 21.4%  of RWA, comfortably met by MREL eligible liabilities (40% of RWAs as at end-Dec. 2018)