Mediobanca Quarterly Profit Climbs Nine-Fold After Stake Sales

Mediobanca SpA, Italy’s biggest publicly traded investment bank, said fiscal second-quarter profit surged nine-fold, boosted by the sale of equity stakes.

Net income climbed to 133.5 million euros ($184 million) from 14.8 million euros a year earlier, the Milan-based company said in a stock exchange statement today. Earnings included a 72.6 million-euro gain from the sale of its holdings in firms such as U.S. retailer Saks Inc. and publisher RCS MediaGroup SpA.

Chief Executive Officer Alberto Nagel is selling stakes in non-strategic companies to boost profit and capital. Mediobanca is one of the 15 lenders in the country that’s being inspected by the European Central Bank as part of an asset quality review and stress test this year.

Loan-loss provisions increased to 173.1 million euros in the quarter from 121.4 million euros a year earlier, Mediobanca said. Operating costs fell 0.3 percent to 201.4 million euros.

The increase in provisions was partly due to “maintaining an adequate coverage ratio in view of the new classifications required under the ECB’s Asset Quality Review process,” the company said.

Mediobanca’s revenue in the period fell 1.9 percent to 453.1 million euros due to lower income from trading.

The core Tier 1 capital ratio under Basel 2.5, a measure of financial strength, rose to 11.9 percent as of Dec. 31 from 11.5 percent at the end of September, Mediobanca said. Italian banks aren’t required to say what the ratio was under more stringent Basel III rules.

Mediobanca said that it repaid 500 million euros from the 7.5 billion euros it borrowed in the ECB’s long-term refinancing operations.

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