Mediobanca Fourth-Quarter Profit Rises on Lower Provisions

Mediobanca SpA said fiscal fourth-quarter profit rose 31 percent as it set aside less money for bad loans. Italy’s biggest publicly-traded investment bank proposed a higher dividend.

Net income climbed to 162.1 million euros ($180.5 million) in the three months through June from 124.2 million euros a year earlier, the Milan-based company said in a stock exchange statement Friday. Earnings beat the 134.8 million-euro estimate of four analysts surveyed by Bloomberg.

Chief Executive Officer Alberto Nagel is disposing of assets that aren’t central to the company’s strategy to focus on the main business of corporate and investment banking and expand retail banking and asset management. Mediobanca proposed a dividend of 27 cents a share, higher than the 25 cents distributed a year ago and in line with a Bloomberg estimate.

Revenue was almost unchanged from a year earlier at 528 million euros as higher net commissions and income from trading offset a decline of the contribution of equity accounted companies. Loan-loss provisions fell to 100 million euros from 123 million euros a year earlier. The dividend increased 8 percent to 27 euro cents a share.

The lender said its common equity Tier 1 ratio under stricter Basel III rules, a key measure of financial strength, fell to 12.6 percent as of June 30 from 13.2 percent at the end of March. The bank made some changes in the calculation of ratio at the end of June, including the partial deduction of Assicurazioni Generali SpA investment.

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