By Gianluca Semeraro
MILAN (Reuters) - Italy's Mediobanca (MI:MDBI) stuck to its multi-year financial goals on Thursday after reporting a 27% drop in net profit in the year to June 30, blaming one-off hits linked to the COVID-19 crisis.
The bank said it would not pay a dividend for the year, as recommended by the European Central Bank (ECB), which has urged lenders to preserve capital to better cope with the economic fallout of the pandemic.
The bank aims to resume its payout policy in the current fiscal year "with a mix of cash dividends and share buybacks, set annually depending on the speed of the recovery and stock prices," Chief Executive Alberto Nagel told analysts.
The decision was subject to a green light from the ECB, Nagel added.
Retained earnings boosted the lender's core capital ratio to 16.1% as of June 30, one of the highest in Italy.
Mediobanca targets a core capital of 13.5% as of June 2023, a threshold which gives room for potential acquisitions in addition to earnings distribution, Nagel said.
"We are committed to our plan," Nagel told a press briefing in reference to the business plan the bank presented in November. "We think that from now to 2023, we'll achieve those goals even if by following a different path."
Net profit for the 2019/2020 fiscal year came it at 600 million euros (542.2 million pounds) compared with an analyst forecast of 587 million in a consensus provided by the bank.
Revenue was stable at 2.5 billion euros as a positive trend in net interest margin and fees, which both grew by 3% annually, offset the drop in net treasury income, hit by the sharp COVID-inspired market correction.
Nagel said the current crisis would trigger opportunities for Mediobanca, which aims to play a major role as an adviser in expected further banking consolidation in Italy, he said.
Mediobanca acted as chief adviser in Intesa Sanpaolo 's (MI:ISP) successful bid for UBI Banca (MI:UBI), Europe's biggest banking deal in a decade.