Mediobanca Banca di Credito (MDIBF) Q4 2025 Earnings Call Transcript

Mediobanca (MDIBF) announced record full-year results for 2025, with net profit up 4% and EPS up 7%, attributing the strong performance to robust commercial achievements and strategic footprint expansion. Key drivers included €11 billion in net new money (+30% YoY), a 14% increase in fees exceeding €1 billion, and 9% growth in net interest income, alongside a lower-than-expected cost of risk of 44 basis points. This strong operational momentum and 270 basis points of capital generation supported an increased dividend, signaling solid financial health and effective execution of its strategic plan.

Analysis

Mediobanca has reported a record-breaking full-year performance for 2025, demonstrating significant operational momentum and successful execution of its strategic plan. Top-line growth was exceptionally strong, evidenced by a 30% year-over-year increase in net new money to €11 billion and a 14% rise in fees, which surpassed the €1 billion threshold. This was complemented by robust lending activity, including a 9% expansion in Consumer Finance loans and an 8% increase in Corporate & Investment Banking average loans. Profitability was further enhanced by a resilient 9% growth in Net Interest Income and a lower-than-expected Cost of Risk, which concluded the year at 44 basis points against a forecast of 50-55 basis points. This effective risk management and revenue strength culminated in a 4% increase in net profit and a more pronounced 7% rise in Earnings Per Share, with the latter being amplified by a completed share buyback program. The bank's financial health is underscored by 270 basis points of capital generation, directly enabling an increased dividend distribution to shareholders.

Key Decisions for Investors

• Consider the record results and broad-based growth across fees, net new money, and lending as strong validation of the bank's operational strategy, supporting a bullish outlook on the stock.
• For income-focused investors, the increased dividend, underpinned by robust capital generation of 270 basis points and a completed buyback program, signals management's strong commitment to shareholder returns.
• Monitor the sustainability of the low 44 basis point Cost of Risk in future quarters, as this will be a critical indicator of the bank's credit quality amid continued loan book expansion.