Mediobanca profit beats estimates as consumer, wealth management grow

MILAN, Oct 24 (Reuters) - Italy's investment bank Mediobanca MDBI.MI reported a better than expected net profit in the first quarter of the 2019-2020 fiscal year thanks to growth in its consumer banking and wealth management businesses, it said on Thursday.

The results will be scrutinised even more closely than usual after eyewear entrepreneur Leonardo Del Vecchio snapped up a stake of nearly 7% in the bank last month and called for growth through M&A, putting pressure on Chief Executive Alberto Nagel.

The 84-year-old billionaire also urged Mediobanca to build up its investment banking business and rely less on contributions from consumer credit and its most prized asset, Italy's top insurer Generali GASI.MI.

The bank's net profit came in at 271 million euros ($301.5 million) up 10% from a year ago and the best result in the last three years. An analyst consensus compiled by the bank had an average estimate of 250 million euros.

Revenues grew 7% to 684 million as net interest income rose by 4.4%, driven by consumer banking and wealth management, while corporate and investment banking was stable.

Generali, in which Mediobanca holds a 13% stake, contributed revenues for 135.5 million euros, up from 98 million euros a year ago, thanks to one-off gains in the insurer's first-half results.

The CET1 core capital ratio, a measure of financial strength, stood at 14.2%, up 8 basis points from the end of June.

($1 = 0.8987 euros)

(Reporting by Gianlcua Semeraro, editing by Silvia Aloisi)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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