UPDATE 1-Mediobanca reaps gains of lower loan losses, fatter fees

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MILAN, Oct 27 (Reuters) - Italian investment bank Mediobanca’s first quarter net profit rose 11 percent, helped by lower loan loss charges, more fees from a shift to wealth management and the sale of a stake in motorway group Atlantia.

Mediobanca said its net profit in the three months to the end of September was 301 million euros ($350 million), above an analyst consensus of 260 million euros distributed by the bank.

This reflected a 13 percent increase in revenues, it said on Friday, with net fees and commissions jumping 30 percent as the group increasingly shifts its focus towards wealth management.

Mediobanca last year bought the 50 percent stake it did not already own in Banca Esperia to bolster its private banking business, after acquiring British credit manager Cairn Capital and Barclays’ Italian branches in 2015.

In September it appointed a chief executive for its new asset management arm and a head of the network of financial advisers at its retail division CheBanca!.

Earnings in the period were also boosted by a net gain of 89 million euros on the sale of its remaining stake in Atlantia and a fall in the amount of money set aside to cover for bad loans - loan loss provisions fell by 40 percent to 55 million euros.

Its CET 1 ratio, a key measure of financial strength, stood at 13.5 percent at the end of September, unchanged from June.

Mediobanca said it saw business opportunities for its advisory, capital market and credit management operations arising from new European Central Bank proposals on bad loans, which analysts say are expected to hit Italian banks hard.

With domestic lenders expected to have to accelerate a clean-up of their balance sheets, Mediobanca said it was well positioned to benefit from possible sales of bad loans and potential share issues that might be needed. ($1 = 0.8595 euros) (Reporting by Silvia Aloisi; editing by Alexander Smith)