Mediobanca Reports Fourth-Quarter Loss on Securities Writedowns

Mediobanca SpA (MB), Italy’s biggest publicly traded investment bank, posted a fiscal fourth-quarter loss after writing down equity holdings of 287 million euros ($384 million).

The net loss of 217 million euros in the three months to June 30 compared with a loss of 24 million euros a year earlier, the Milan-based bank said in a statement today. Mediobanca said it scrapped a dividend on fiscal year results in accordance with the Bank of Italy’s recommendations.

Chief Executive Officer Alberto Nagel is planning to sell stakes in companies including Assicurazioni Generali SpA (G), Telecom Italia SpA (TIT) and RCS Mediagroup SpA (RCS) as part of a plan to return Mediobanca to profit. In June, the bank accounted for all of its publicly traded securities, with the exception of Generali, as assets available for sale, writing down their value based on market price. The bank forecasts revenue from banking activities of 2.1 billion euros by 2016 under a three-year plan.

Extraordinary losses in the fiscal year included 38.5 million euros of writedowns for shares the bank owns in publisher RCS and 319.7 million euros for its 12 percent stake in Telco SpA, the company controlling Telecom Italia.

Mediobanca’s shares climbed 0.5 percent to 5.05 euros at 1:23 p.m. in Milan, taking gains this year to 8.3 percent and valuing the company at 4.4 billion euros. The benchmark Stoxx 600 Banks Index advanced 14 percent since December.

Mediobanca’s loan-loss provisions increased to 142.8 million euros in the quarter from 141.5 million euros a year ago. Revenue fell 6.3 percent to 423.6 million euros, while operating costs rose 0.8 percent to 195.4 million euros.

The core Tier 1 capital ratio, a key measure of financial strength, fell to 11.7 percent as of June 30 from 12 percent at the end of March, Mediobanca said.

To contact the reporters on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net; Francesca Cinelli in Milan at fcinelli@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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