June 21, 2013 6:23 pm

Mediobanca shares fall as lender reveals plan to sell stakes

Shares in Mediobanca fell more than 9 per cent on Friday after it presented an industrial plan that involves the Milanese investment bank quitting the shareholder pact that has kept it at the centre of the Italian corporate power network for half a century.

Under the plan, presented by Alberto Nagel, chief executive, the bank will cut long-held stakes in insurer Generali, Telecom Italia and RCS Mediagroup as it switches its focus to international expansion, investment banking and its nascent retail bank business.

Mr Nagel said he had made the decision to cut the stakes as Mediobanca has suffered from its extensive exposure to corporate Italy during the sovereign debt crisis and ensuing two-year recession. Still, its core tier one capital ratio – a measure of financial strength – stands at 12 per cent, one of the highest in Italy.

Mediobanca, which has a €4.1bn market valuation, aims to raise €2bn by 2016 from its stake sales. It plans to cut its holding in Generali, Italy’s largest insurer, to 10 per cent from 13 per cent.

“It neither makes sense nor it is profitable to have a business model where our capital is tied up in shareholdings,” Mr Nagel told investors.

While Mediobanca shares have gained 35 per cent in the past year, outpacing other Italian banks such as UniCredit and Intesa Sanpaolo partly in anticipation of the plan, some industry experts voiced concern about its competitiveness outside of Italy’s power network.

Roberto Lottici, a fund manager at Ifigest, said Mediobanca’s change of strategy was “to be welcomed”, even if in the short term it may make some of the companies in which it has long held stakes “vulnerable”.

Shares in Mediobanca closed down 9.42 per cent at €4.40.

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