In This Article:
Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Mediobanca SpA (MDIBF) reported a strong commercial flow with 2.6 billion of net new money, doubling the industry average.
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The company saw a 12% increase in net new loans in consumer finance and a 36% year-on-year increase in CIB deals.
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Fee growth was significant, up 30% year-on-year, driven by wealth management and CIB.
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The company maintained a strong asset quality with 51 basis points, well within their guidance.
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Mediobanca SpA (MDIBF) initiated a share buyback program for 385 million, authorized by their AGM and SSM.
Negative Points
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Net profitability slightly decreased to 330 million due to normalized insurance contributions.
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There was a temporary drag in NII in wealth management and CIB due to low credit spreads.
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The company faced higher deposit costs than initially forecasted.
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Cost of risk in consumer finance increased, driven by a higher mix of personal loans.
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The company anticipates flat NII for 2025 and 2026, reflecting challenges in the current interest rate environment.
Q & A Highlights
Q: Can you provide insights on the payback from the premier deposit gathering campaign and its impact on NI I and fees? Also, when can we expect a decision on further capital distributions beyond the planned buyback? A: The campaign is expected to convert 50% of deposits into managed assets, with the rest remaining in liquidity. The pressure on NI I is temporary, and improvements are anticipated in the second half of the year. Decisions on further capital distributions will be made towards the end of the plan, considering potential M&A activities.
Q: What are the reasons behind the lowered NI I guidance, and how does it affect the EPS growth target? A: The NI I guidance was lowered due to tactical decisions to focus on increasing TFA and waiting for better margins in corporate lending. Despite this, EPS growth is maintained at 6-8% due to cost management and potential revenue improvements in other areas.
Q: Can you explain the increase in cost of risk in consumer finance and its implications? A: The increase in cost of risk is primarily due to a shift towards more personal loans, which have higher profitability but also higher associated risks. This is part of a strategic move to enhance returns, with net profitability remaining strong.
Q: What initiatives are being taken to manage costs while supporting company growth? A: The company is focusing on maintaining cost discipline while continuing to invest in key growth areas such as recruitment and digital infrastructure. Some non-strategic activities may be trimmed to support this balance.