Mediobanca (MB) Investor Update summary

Strategic roadmap, business model, and priorities

• Plan extended to 2028, prioritizing wealth management as the main growth driver, with the Banca Generali acquisition set to double the segment's size and create a leading European wealth manager.

• Emphasis on a Private Investment Banking model, capital-light CIB, and record results in consumer finance, leveraging digital and multichannel distribution.

• Unique business model focused on specialized, higher-margin businesses, delivering best-in-class growth, remuneration, and value creation.

• Business model leverages synergies between divisions, with targeted expansion in salesforce, digital channels, and new geographies.

• Well positioned to benefit from macro and industry trends, including digitalization, wealth transfer, and demand for specialized advice.

Financial performance, targets, and capital allocation

• Revenue projected above €4.4bn by 2028 (+6% CAGR), with net profit of €1.9bn (+45%), EPS at €2.4 stated, and ROTE at 20% (17% recurring); CET1 ratio to remain solid at ~14%.

• Wealth management revenue to reach €1.2bn, Compass and consumer finance to add €200m, and all divisions to improve efficiency with cost/income ratios declining.

• Net new money to average €10-11bn annually, with TFA to reach €143bn and loan book to grow from €54bn to €63bn.

• €4.9bn to €5bn to be distributed over three years, including €4.5bn in cash dividends and up to €0.4bn in share buybacks; DPS to double to €2.1 by FY28.

• Capital generation to average 280bps annually, supported by net earnings, regulatory optimization, and AT1 issuance.

Operational efficiency, risk management, and funding

• Cost/income ratio in wealth management to fall to 56% by 2028, with group-wide efficiency gains from digital investments and centralization.

• Cost of risk to normalize at 60bps by FY28, with overlays in consumer finance fully deployed and asset quality under control.

• Funding strategy includes €6–7bn annual bond issuances and up to €750m AT1 issuance, with capital ratios to remain well above regulatory requirements.

• RWA optimization through new PD models, SRT transactions, and risk mitigation measures.

• NII sensitivity: 50bps Euribor change impacts NII by €30 million.