The guidelines of the 2019/2023 plan, presented in November 2019, note the completion of the strategic repositioning of the Mediobanca group, and the definitive affirmation of the distinctive and sustainable “specialised financial player” model.

In an economic and regulatory context which is forecast to be challenging for the entire financial sector, interesting growth opportunities are emerging for operators that, owing to the specialisation and strength of their business model, are able to turn criticalities into opportunities for growth.

The 2019-2023 plan aims to further fine-tune our business model, with the goal of establishing Mediobanca as an operator that stands out in the European financial domain for its growth, quality and sustainability.

The group aims to achieve positive development in all segments of operations – the new Wealth Management and the historical activities of Corporate & Investment Banking and Consumer Banking division - leveraging on our key features: focus and distinctive position in high specialisation and high profit margin business segments, driven by positive long-term structural trends; extensive capital resources, constant investment in talent, innovation and distribution.

We intend to continue to grow in terms of revenues, profits, remuneration of shareholders and the satisfaction of all stakeholders, by preserving a risk/return profile among the best in Europe.

The ESG strategy is integrated in the company plan, in order to combine business growth and financial solidity with social and environmental sustainability, creating long-term value for all stakeholders.
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Market context and main trends

SCENARIO DEVELOPMENTS REQUIREMENTS TO BE SUCCESSFULLY COMPETITIVE
ADVERSE MACRO:
  • Negative interest rates for longer
  • Low GDP growth   
  • Strong positioning in selected core businesses/countries
  • High cost efficiency/strong risk selection capability
DISRUPTIVE TECHNOLOGY IMPACT:
  • Changing consumer behaviour
  • Fintech to gain market share   
  • Transform distribution: more digital, driven by specialised sales force and mobility
  • Large-scale use of Advance Data and Artificial Intelligence
STRICTER REGULATION:
  • Capital requirement to increase
  • Consumer protection to grow   
  • High capital buffer/asset quality contents
  • Fair and transparent product pricing
  • Low conduct risk
RISE OF ESG:
  • SRI has grown/will grow significantly
  • Talent retention
  • Governance standard to be improved
  • Sustainability as a new valuation metric for equities
  • ESG driver for economic growth and new investment and product development
  • Sustainable business model for all the stakeholders as a long-term value proposition

 

Growth in all our business sectors

The group aims to achieve positive development in all business sectors.

  • In Wealth Management, the market segment in which we have invested heavily starting from the 2016/2019 business plan, we have established a position as a key player in the Italian market. Over the next few years, also through considerable investments in talent and technology, the division will further reinforce its positioning, revenues and profitability, establishing a firm foothold as a sustainable and innovative market leader serving affluent and HNWI/UHMWI customers. 
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  • In Consumer Banking, we will take advantage of our solid competitive position, which sees us as one of the main operators in the country, to become once more a pioneer in consumer credit in Italy, also through digital innovations that allow us to respond to changes in consumer habits
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  • In Corporate & Investment Banking, Mediobanca’s historic business sector, we aim to strengthen our presence in Europe, both in M&A and in the Capital Market, also thanks to the synergies with the French boutique Messier Maris et Associés, which we acquired control of in April, and with the Wealth Management division.
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We will focus on organic growth and through M&A opportunities

Challenging financial targets, support by investments in innovation and distribution

Starting with the excellent results achieved in the previous three-year period, the financial targets defined in the 2019-2023 period are challenging.

Growth    

+4%1
(or €3bn)
Revenues

+4%1
(EPS)
Earnings
up to11%
(10%)
ROTE

1) CAGR 2019-2023

Profitability      
up to 28%-30% (ROAC)
Consumer Banking
  up to 16% (ROAC)
Corporate e Investment Banking
up to 25% (ROAC)
Wealth Management


In particular, we forecast growth of 8% in total financial assets (TFA); 11% at AUM/AUA level; 4% in terms of customer loans; 4% in revenues, with a solid contribution from all business segments; 4% in earnings per share. Profitability will rise both at group and divisional level.
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Over the next four years, we will invest heavily in people and innovation in order to continue technological excellence, effectively respond to the change in consumer habits and improve the user experience.

More than 1,000 professionals will work with the group to improve distribution. In particular, the sales force will grow by 60% in Wealth Management, reaching 1,400 people, of which 1,275 (+60%) in the Affluent segment and 160 (+20%) in the Private segment. In Consumer Banking, we will make significant investments in enhancing direct distribution, our sales points will increase by 75% to roughly 350, including the direct network and agencies. Group investment bankers will increase by 25% to over 310 professionals in the Advisory and Capital Markets areas.

Growth in shareholders' remuneration

Shareholders' remuneration will increase up to €2.5 billion in the four-year period 2020-2023 (+50% compared to the previous four-year period 2016-2019), of which €1.9 billion in dividends and the remaining portion through the buyback and cancellation of treasury shares.

  • The dividend will grow by 10% in 2020 (to €0.52 per share) and then 5% every year (up to €0.60 in 2023).
  • Over the term of the plan, provision is made for an annual programme for the buyback of treasury shares with their cancellation (up to 2% of capital per year), for a total minimum value of €0.3 billion and a maximum of €0.6 billion, with the objective of stabilising the CET1 (phase-in) ratio at 13.5% per annum following the organic and inorganic growth realised in the year.

Post-Covid update

Following the recent ECB recommendations asking banks not to pay dividends until January 2021, for FY 2019-20 a zero dividend will be proposed to shareholders in general meeting to be held in October 2020. In the light of the Bank’s substantial capital position and the continuing objective of optimizing capital to reach a CET1 ratio of 13.5% by end-June 2023, through a best-in-class shareholder remuneration policy and opportunistic acquisitions that will strengthen the Group in its core businesses, the dividend policy approved in the 2019-23 strategic plan is confirmed. Shareholder remuneration will resume starting from FY 2020-21, with the amount and composition (mixture of dividends and buybacks) to be decided annually in the light of the speed of the post-Covid recovery, the Mediobanca stock market performance (P/BV) and ECB authorization.

Shareholders' remuneration up to 2.5bn

total over 4 years

Dividend per share

+10% in 2020
then increasing by +5% each year for a total of €1.9bn

Buyback and cancellation of treasury shares

€0.3-€0.6bn total

Cet1 ratio phased-in

13.5% each year

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