Mediobanca would prioritize wealth management space for M&A opportunities – CEO

Mediobanca Banca di Credito Finanziario SpA is prioritizing M&A opportunities in wealth management over those in asset management, CEO Alberto Nagel said during the bank's Nov. 12 earnings call.

Unlike several European lenders such as BNP Paribas SA and Banco BPM SpA, which sought to bolster their asset management operations through acquisitions — an approach made attractive by the so-called Danish compromise — Mediobanca aims to strengthen its distribution capabilities in wealth management.

Nagel noted the ongoing market consolidation in Europe, where asset managers must either scale up or specialize to remain competitive amid margin pressures. Mediobanca instead could look to boost its distribution capabilities within wealth management, he said.

"We continue to grow organically, and we always look at opportunities if they can accelerate our […] growth," Nagel said.

NII decrease

For the first quarter of fiscal 2025, the bank's net interest income (NII) decreased by 1.5% quarter over quarter, to €485.0 million from €492.4 million, and dropped 2.2% year over year, to €485.0 million from €495.7 million. NII is the difference between interest earned on loans and interest paid on deposits. Mediobanca also forecasts flat NII for 2025.

Additionally, net fee and commission income fell by 17.2% to €231.2 million from €279.2 million quarter over quarter and rose 28.6% to €231.2 million from €179.8 million year over year. The year-over-year increase more than offsets the NII decline during the same period and quarter over quarter due to falling interest rates.

Net profit decreased to €300 million from €351.3 million year over year, marking a smaller-than-expected decline of 6.1%.

The bank's common equity Tier 1 ratio, a key measure of financial stability, stood at 15.4% in the third quarter, supporting a positive quarterly profit.

Digitalization

Mediobanca is also implementing a three-year digitalization initiative, investing €230 million across over 300 projects from 2023 to 2026. This strategy leverages its subsidiary Compass Banca SpA, which utilizes new technologies to issue profitable loans.

"If we continue to issue loans and add €200 million to €300 million in outstanding loans each quarter while refinancing Compass's liabilities, we will see a better contribution over the next quarter, in 2025, and in 2026," Nagel said.

Compass reported an 8% increase in its contribution to NII.