Mediobanca chief’s 20-year race has one more lap

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Lisa Jucca

MILAN, May 24 (Reuters Breakingviews) -Alberto Nagel’s white-knuckle ride at the helm of Italy’s Mediobanca MDBI.MI can extend for one more lap. In his two decades in charge, the Italian banker has fought market crises and boardroom battles while diversifying revenue and booking chunky returns. His new business plan lacks fireworks, but even potential opponents like the heirs of eyewear billionaire Leonardo Del Vecchio and construction magnate Francesco Gaetano Caltagirone will probably still back the veteran executive for another three-year term when they and other investors meet to decide the matter in October.

Nagel’s new business plan, unveiled on Wednesday, is an extension of a tried and tested template. The CEO promised to accelerate the 9 billion euro bank’s existing focus on wealth management, bolstering its advisory business and keeping a strong capital base while also leaving room for possible acquisitions. That, Nagel believes, should help lift revenue to 3.8 billion euros by June 2026, up from an expected 3.2 billion euros in the fiscal year ending June 2023. He also reckons he can crank up the return on tangible book to 15% from 12%.

The plan contains all the key ingredients that Nagel started to inject into Mediobanca after taking the helm in 2003. After spending the first few years pushing back on unwanted influence from some unruly shareholders and board members, Nagel has been instrumental in transforming the Milanese bank from an entity preoccupied with using multiple shareholdings to control big Italian companies into a modern lender focused on investor returns. The bank also survived the euro zone crisis of 2011-2013 relatively unscathed.

One reason why shareholders may want Nagel to stick around is that Mediobanca has delivered total returns including dividends of 192% during his tenure. This is slightly higher than those offered by bigger Italian rival Intesa Sanpaolo ISP.MI, considerably higher than UniCredit’s CRDI.MI and well above the returns of a large number of top euro zone banks including Santander SAN.MC and Credit Agricole CAGR.PA. He's done so while avoiding big disposals or capital increases.

That sort of outperformance gives Nagel some protection, which is just as well. Del Vecchio, whose heirs hold a 20% stake in Mediobanca after he passed away in 2022, had been critical of the CEO’s strategy, which he said was too dependent on dividends from a 13% stake in Assicurazioni Generali GASI.MI, Italy’s biggest insurer. Del Vecchio had clashed with Nagel by teaming up with Caltagirone to try and win board control at Generali, but the strategy failed.

There’s still a danger of Generali-style board strife. Yet an overly-hasty dismissal of Nagel carries risks too. The Mediobanca boss has not picked a successor, and were he to abruptly leave it could trigger departures among some top managers and investment bankers. A sufficient number of institutional investors and other shareholders may also fear that a Nagel-less Mediobanca would revert to focusing on boardroom intrigue instead of shareholder value, as was typical before his tenure. That’s probably enough to give him three more years.

Follow @LJucca on Twitter


Italian investment bank Mediobanca unveiled on May 24 its business plan for 2023-2026.

The 9 billion euro bank led by CEO Alberto Nagel pledged to boost revenue to 3.8 billion euros by June 2026 from an expected 3.2 billion euros in the fiscal year ending in June 2023 and lift the return on tangible equity to 15% from 12% currently.

Alberto Nagel became Mediobanca General Manager in April 2003.

Mediobanca shareholders will meet to vote on a new board in October.

Mediobanca shares were up 2.7% to 10.43 euros at 0710 GMT.

Profitable tenure

Editing by George Hay and Pranav Kiran


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