By Valentina Za
MILAN (Reuters) -State-backed Monte dei Paschi di Siena on Friday posted a larger-than-forecast 24% quarterly profit rise as it pursues a hostile takeover of rival Mediobanca in the consolidation wave sweeping Italian finance.
Mediobanca, which has announced its own buyout offer for wealth manager Banca Generali in an effort to thwart Monte dei Paschi’s (MPS) bid, also reported better than expected results on Friday.
MPS said that work on the Mediobanca bid was progressing and it was not threatened by the planned Banca Generali acquisition.
By contrast, Mediobanca said the risks of combining with MPS were further heightened by the Banca Generali tie-up.
After a deep bad loan cleanup and record profits driven by higher interest rates, Italian banks have turned to dealmaking to support shareholder returns now that rates are falling.
MPS, which Italy has been successfully re-privatising since late 2023 after rescuing it in 2017, is proposing plugging Mediobanca’s wealth management and investment banking businesses into its own commercial network, where the two lenders already partner in consumer finance.
Mediobanca, a former powerhouse of Italian capitalism as it started as a lender to large companies, wants to bet instead on wealth management for top tier clients with the Banca Generali acquisition, and continue to steer away from commercial banking.
Mediobanca shares rose fractionally at open, while MPS gained 1.3%. Italy’s banking index gained 0.5%.
MPS reported net profit of 413 million euros ($464 million), well above a 341 million euro forecast in an analyst consensus gathered by the bank, as revenues held up and costs and loan loss provisions declined.
Revenues were flat year-on-year at 1 billion euros, topping expectations, with higher net fees offseting an 8% decline in income from the gap between lending and deposit rates. Fees from wealth management and advisory in particular shot up 21% on a quarterly basis.
The core capital ratio strengthened further to 19.6% of assets, one of the highest in the sector.
($1 = 0.8908 euros)
(Reporting by Valentina Za, editing by Alvise Armellini and Tomasz Janowski)
