(Corrects date to June 21, edits headline, with no other
changes to text)
* Bank to cut equity exposure by 2 bln euros
* Writedowns of 400 mln euros to push it into the red
* Will cut Generali stake by 3 pct, exit other holdings
* Targets ROE of 10-11 pct by 2016
By Gianluca Semeraro
MILAN, June 21 Investment bank Mediobanca
turned its back on half a century of dominance over
some of Italy's biggest corporate names by agreeing to sell
nearly all its strategic stakes, a move that will push it into
the red this year.
In a new business plan unveiled on Friday, the bank said it
aimed to cut by 2 billion euros ($2.64 billion) its exposure to
equity holdings through sales and writedowns to focus on its
core banking operations.
It will reduce by 3 percent its 13.2 percent stake in
Italy's largest insurer Generali but sell other
Milan-based Mediobanca plans to immediately book writedowns
of 400 million euros to bring key holdings to market value and
pave the way for their sale, a move that will result in a loss
of around 200 million euros for the current financial year
ending June 30.
Under the 2014-2016 business plan, the bank targets a return
on equity of 10-11 percent by 2016 and aims to keep its core
Tier 1 ratio, a measures of financial strength, at 11-12
percent. It aims to keep dividend payout at 40 percent.
Funded in the aftermath of World War Two by legendary banker
Enrico Cuccia, Mediobanca, which sits at the centre of a web of
complex cross-shareholdings, has been instrumental in shaping
Italy's business landscape by wielding influence through stakes
in a raft of major companies.
Among others, the bank owns Generali, leading domestic
publisher RCS Mediagroup, owner of influential newspaper
Corriere della Sera, and corporate holding Telco, the top
investor in domestic phone giant Telecom Italia.
But a severe drop in the value of these stakes due to a deep
economic crisis in Italy has led current management to squarely
focus the bank's future strategy on value rather than political
A source with direct knowledge of the strategic thinking at
the bank said Mediobanca plans to exit shareholders' pacts at
Telco and RCS as the earliest opportunity in September.
($1 = 0.7590 euros)
(Reporting by Gianluca Semeraro, writing by Lisa Jucca; Editing
by David Cowell)