Mediobanca profit falls 11.8% hit by MPS, Banca Generali bid costs

MILAN (Reuters) -Italian merchant bank Mediobanca on Wednesday reported an 11.8% yearly fall in quarterly net profit, hit by costs tied to its defence against Banca Monte dei Paschi's (MPS) takeover bid, despite steady revenues.

Thanks to the support of two leading Mediobanca shareholders, MPS in September completed its 16-billion-euro ($19 billion) stock‑and‑cash acquisition of Mediobanca.

The takeover by MPS, which was bailed out by the state in 2017 and has been almost fully re-privatised, is the biggest deal so far in a flurry of M&A reshaping Italy's financial sector.

The Milanese lender tried to thwart MPS's hostile offer by bidding for wealth manager Banca Generali, to increase its own size and cost, but shareholders rejected the plan.

Mediobanca reported a net profit of 291 million euros for the three months through September, the last set of earnings under long‑serving Chief Executive Alberto Nagel, who resigned after MPS' successful bid.

The bank booked 45.3 million euros in costs for financial and legal advisers and direct expenses related to the MPS bid and the proposed deal involving Banca Generali, as well as the early termination of long‑term incentive plans for managers.

The July-September period is the first quarter of Mediobanca's financial year which runs from July to June.

To align its reporting schedule with that of its parent company MPS, Mediobanca has called an extraordinary shareholder meeting on December 1 to shift the end of its financial year to December 31 from June 30.

Revenues totalled 868 million euros, broadly in line with the same quarter of last year, thanks to the contribution of the bank's consumer finance and insurance businesses, which offset a decline in wealth management and corporate & investment banking.

($1 = 0.8575 euros)

(Reporting by Gianluca Semeraro; Editing by Valentina Za)