Tuesday February 24, 03:50 PM
UPDATE 2-Mediobanca's H1 net profit hit by writedowns
MILAN, Feb 24 (Reuters) - Italian investment bank Mediobanca (Milan: MB.MI - news) posted a 84 percent fall in first-half net profit on Tuesday, missing market expectations, on writedowns from falling share prices and lower earnings from key holdings.
Mediobanca, which advises on many of Italy's biggest corporate and financial deals, said in a statement market turmoil wiped about 430 million euros ($551 million) from its equity portfolio and hit profits.
It made writedowns of 281 million euros, including 144 million euros on its share of a stake in Telecom Italia (Milan: TIT.MI - news) 's holding company Telco, which it bought with insurer Generali, bank Intesa Sanpaolo (Milan: ISP.MI - news) , Spain's Telefonica (Madrid: TEF.MC - news) and the Benetton (Milan: BEN.MI - news) family
The writedown on Telco values the underlying Telecom Italia shares at 2.2 euros apiece, a bank source said.
Mediobanca said earnings contributions from its holdings, including its 15.7 percent stake in Generali, fell to 147 million euros but did not give a year-ago figure.
Sources close to the board meeting said while discussing the Generali holding directors had expressed concern over the general trend of the insurance industry. Chief Executive Alberto Nagel later said the bank was 'very calm' about Generali.
Three analysts said Mediobanca's interim net profit of 100 million euros was below their expectations. One of them said a consensus estimate pointed to 212 million euros.
Mediobanca said in its core banking activities, the trend remained positive with net interest income up 3.2 percent, and its Core Tier 1 ratio was hardly changed from the year-end on June 30 at 10.2 percent.
'Results were weaker at the operating level and there were much more writedowns than I had expected,' a London-based analyst said, asking not to be named.
'Costs and provisions were slighly weaker.'
Mediobanca's forays into new areas -- retail bank CheBanca! and international expansion -- added sharply to costs, which were up 15.1 percent on higher headcount and operating costs
'A diversification by product and geography makes sense. It has to be seen over a longer time-frame,' the analyst said.
In a newpaper interview last August Chairman Cesare Geronzi said the bank should set its sights higher and not be 'content with opening a few branches and being successful in retail.'
Mediobanca shares were 4.6 percent lower by 1531 GMT at 6.18 euros, while the DJ Stoxx European banking sector index was down 1.7 percent.
In the last year the share price has lost over 50 percent and the bank now has a market capitalisaion of about 5.3 billion euros.
($1=.7804 euros)
(Additional reporting by Danilo Masoni and Gianluca Semeraro; Editing by Greg Mahlich) Keywords: MEDIOBANCA/
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
