Mediobanca Reports Third-Quarter Loss From Investment Holdings

Mediobanca SpA, Italy’s biggest publicly traded investment bank, posted a fiscal third-quarter loss after booking losses from equity stakes in Assicurazioni Generali SpA and other companies.

The net loss of 86.6 million euros ($114 million) in the three months ended March 31 compared with a profit of 41.5 million euros a year earlier, the Milan-based bank said in a statement today. That compares with the 92.5 million-euro loss estimated by 4 analysts surveyed by Bloomberg.

Chief Executive Officer Alberto Nagel is cutting the bank’s stakes in other companies to improve profitability as Italy’s longest economic slump in 20 years hurts corporate business and boosts loan-loss provisions. Mediobanca will present a new strategic plan June 21, including a review of the lender’s 13.2 percent stake in Generali, the CEO said Feb. 26.

Revenue in the quarter halved to 262.5 million euros amid 156.8 million euros of losses at equity-accounted companies, including Generali and RCS MediaGroup SpA. Under those accounting rules, Generali’s net loss of 1.04 billion euros in the fourth quarter of 2012 cut Mediobanca’s earnings in the first three months of this year.

“We expect the outlook to remain weak, as early signals of revitalized corporate activity will take several quarters to materialize,” Manuela Meroni, an analyst at Banca IMI in Milan, wrote in an April 23 report. “The market’s focus should remain on the outcome of the business review.”

Trading income fell to 74.4 million euros from 133.1 million euros a year earlier, while net interest income dropped 5 percent to 245.7 million euros, hurt by a planned reduction in the company’s risk profile.

“The corporate loan deleveraging process was completed, with corporate loans down in a year to 15.8 billion euros from 18.6 billion euros,” Mediobanca said in the statement.

The lender’s core Tier 1 capital ratio, a measure of financial strength, rose to 12 percent as of March 31 from 11.8 percent at the end of December, confirming Mediobanca as one of the best-capitalized lenders in the country. Mediobanca’s loan-loss provisions increased to 130.9 million euros from 114.5 million euros a year ago.

Before it's here, it's on the Bloomberg Terminal.