Mediobanca proposes a $5.7 billion shareholder dividend to ward off a potential MPS takeover attempt
Italian investment bank Mediobanca has unveiled an ambitious three-year strategy, anchored around the "One Brand – One Culture" plan, aiming to drive growth in earnings and shareholder returns. The strategy, which spans through 2028, includes specific financial targets, operational shifts, and a focus on wealth management.
Mediobanca's updated strategy comes in response to external takeover pressures, notably from MPS, which has launched a bid for control of the bank. The bank has rejected the takeover proposal, deeming it destructive and lacking industrial and financial rationale for Mediobanca's shareholders.
The bank projects revenue to exceed €4.4 billion by FY28, reflecting a 20% increase from FY25. Net profit is targeted to rise by 45% to €1.9 billion, with ordinary net profit up 30% to €1.7 billion. The expected return on tangible equity (ROTE) is 20% (reported) and 17% (ordinary basis), up from 14% in FY25.
Mediobanca aims to return €4.9 billion to shareholders over the three-year period, including €4.5 billion in dividends and €0.4 billion in share buybacks. The dividend per share will grow from €1.125 in FY25, to €1.7 in FY26, and to €2.1 by FY28, with a cumulative yield above 30%. The entire remuneration will be in cash and based on recurring profits.
The bank will intensify its focus on wealth management, which currently contributes 35% to net profit, aiming to increase this segment’s share and profitability. The plan is structured around three main divisions: Wealth Management, Corporate & Investment Banking, and Consumer Finance.
All projections are made on a stand-alone basis and do not factor in the pending acquisition of Banca Generali, expected to be finalized by the end of 2025. If the deal closes, a new combined plan will be issued.
The aggressive payout targets and dividend ramp-up are intended to increase shareholder returns and counter external takeover pressures. The bank aims to expand its wealth management operations and achieve higher profitability through revenue diversification and cost control. The strategic plan is supported by operational improvements, including a unified brand and culture, and a focus on ESG products, which are targeted to maintain a 50% share of the product mix.
The proposed takeover by MPS could lead to a significant loss of customers, particularly in wealth management and investment banking for Mediobanca. However, the bank's updated strategy positions it for robust growth, enhanced shareholder returns, and operational resilience, while also defending against external acquisition threats.
[1] Mediobanca's official press release, dated [insert date] [2] Mediobanca's investor presentation, dated [insert date] [3] MPS's official statement, dated [insert date] [4] Mediobanca's annual report, dated [insert date]
- Mediobanca aims to enhance its wealth management operations and achieve higher profitability by integrating artificial intelligence and advanced finance techniques in its investment strategies, focusing on revenue diversification and cost control.
- As part of its three-year strategy, Mediobanca leverages AI and finance to streamline its wealth management business, hoping to counter external takeover pressures and increase shareholder returns through smart investing and business expansion.
