Strategy

[GRI 102-14]

The results for FY 2017-18 demonstrate the Group’s solidity and capability to deliver success in an increasing complicated competitive scenario. In the twelve months ended 30 June 2018, the Mediobanca Group earned a net profit of over €850m, up 15.2% year-on-year with a significant increase in shareholder remuneration3.

The year was an important one in terms of growth in both earnings and balance sheet terms, driven by robust commercial activity in all business lines.

These results are in part due to the investments made to further strengthen the front-end, Risk Management and IT areas, which have enabled further improvements in relations with clients.
Investment banking activity also delivered strong growth, with Mediobanca heavily involved in the leading transactions in Italy and elsewhere, with an increase in the number of deals in the strategic mid-cap segment.

Another significant aspect has been our M&A activity, which has complemented the Group’s organic growth and supported it with targeted acquisitions, intended to strengthen all business units. The following acquisitions were made during the year under review: completion of the merger of Barclays into CheBanca!; the merger of Banca Esperia into Mediobanca S.p.A. and institution of the Mediobanca Private Banking division; and acquisition of RAM, which expands the range of alternative asset management products available to our clients.

The Bank’s capital is also sufficient to allow further transactions, with the objective of increasing not only revenues but also revenue quality, and of growing the volumes and profitability of the various specialist banking areas on which the business model is based.

The objectives of the 2016-19 strategic plan have been reached one year ahead of schedule, completing the Group’s strategic repositioning from holding company to highly specialized banking group, based on a business model offering higher profitability for lower use of capital, while maintaining its traditional prudent approach to risk and continuing to pay dividends without having to rely on capital increases.

For Alberto Nagel, Mediobanca Group’s CEO, “Our ability to adapt our business model has enabled us to reposition ourselves on the market while maintaining our identity and corporate culture intact which have always been our hallmarks. To borrow a quote from Darwin, we may say that it is not always the strongest or smartest of firms that survive but the ones which react best to changes”.

All this has been possible because of our staff members, who are an essential part of the Group’s capital and the key component in its competitiveness.
Indeed, long-term economic growth cannot be achieved without valorizing human capital, increasing social welfare in general and protecting natural resources. In this sense, conduct which is fair, transparent and responsible can increase and protect a company’s reputation, credibility and consent over time, all of which are prerequisites for business development which is sustainable to create and protect value for all stakeholders.

In order to promote respect for human rights, the fight to tackle corruption, to protect and promote diversity and equal opportunities, protect the environment and invest responsibly, Mediobanca has drawn up its own Group Sustainability Policy, which complements the Code of Ethics and Code of Conduct which had previously been adopted.

The Group also intends to contribute to the spread of the universal principles of the Global Compact, in which it is a participant, and to the implementation of the Sustainable Development Goals (SDGs) set out by the United Nations in its Agenda 2030.

To promote this commitment, numerous environmental, cultural and social initiatives and ventures have been promoted.

The Group also supports scientific and economic research, and seeks to valorize its own architectural and archival resources. Aware of the rapidity with which climate and environmental change is occurring, Mediobanca also considers it its duty to promote responsible management of scarce resources, for future generation
in particular.

Firm in its conviction that an inclusive society must be based on mutual respect and solidarity, guaranteeing equal opportunities and a decent lifestyle for all, in the last year the Group has launched certain initiatives to promote social cohesion and help embed certain values among the youngest members of society.
The convictions and commitment described above have been given concrete form in this document: the Group’s first Consolidated Non-Financial Statement.



3) The Board adopted a resolution to submit a proposal to shareholders at the annual general meeting to be held on 27 October 2018 to pay a gross dividend of €0.47 per share. The amount will be paid on 21 November 2018, with the record date 20 November and the shares going ex-rights on 19 November. The proposed dividend of €0.47 is 27% higher than the €0.37 dividend paid last year, and translates to a payout ratio of 48% (43%)