Mediobanca Profit Dented by Bailout Fund Payment

MILAN—Italian bank Mediobanca Banca di Credito Finanziario SpA said Thursday that its contribution to a bank bailout fund weighed on second-quarter net profit, countering a revenue gain.

Net profit for the three months ended Dec. 31, fell to €76.8 million ($86.7 million) from €100.6 million a year earlier, while revenue rose 4% to €509.2 million. Mediobanca's fiscal year ends June 30.

As with several Mediobanca's Italian peers, net profit was hit by contributions to the Bank Resolution Fund after the Italian government decided to boost in November. The move followed its approval of a rescue plan for four troubled small and midsize local banks, applying newly enacted European rules to the resolution of troubled lenders. Mediobanca's contribution was €57 million.

The bank launched a strategic plan in 2013 aimed at boosting its profitability by selling its vast portfolio of stakes in pre-eminent Italian companies, investing the proceeds in its corporate and investment banking and retail and wealth management units.

In the last quarter, the bank agreed the sale of a 0.22% stake in Assicurazioni Generali SpA, which will be effective in May. It still maintains a 13.2% stake in the Italian insurer.

The bank plans to make more acquisitions in the asset management sector after it bought a 51% stake in London-based credit manager Cairn Capital Group Ltd. from Royal Bank of Scotland and other institutional investors last summer.

Its net interest income in the latest quarter rose 7% to €301.8 million, mainly driven by its consumer business.

Fees for the quarter rose 16% to €131.6 million, helped by activity in its corporate and investment banking unit, mainly in Italy.

"Although the weak markets mean some deals might be postponed, the investment banking pipeline for the coming quarters continue to look healthy," the bank said.

Trading income dropped to €19.6 million for the quarter, compared with €27.2 million a year earlier.

Provisions for bad loans dropped by 40% to €109 million for the last three months of last year, compared with the same period a year earlier, as bad loans have declined over the last four quarters.

Write to Giovanni Legorano at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 02:55 ET (07:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.