Over the year to June, the bank took a €109m (£94.5m) hit on its Greek bond holdings, accounting for nearly half of its total impairments of €238m for the year. Despite a fourth-quarter loss, however, the bank made a pre-tax profit of €792m for the year. Most of the earnings came from its corporate and investment banking division.
The write-down of its Greek government holdings was calculated using the market price on the reporting date, but could worsen if the sovereign’s bond prices fall further.
Mediobanca’s deposits were largely steady, with the bank reporting a loan-to-deposit ratio of 70 per cent – well below the highly leveraged ratios of some of its rivals. It reported a core tier one capital ratio of 11.2 per cent, up just 10 basis points on the previous year.
Despite the write-downs, the bank cut down on its loan loss provisions by 18 per cent, boosted by improving asset quality in both its wholesale and retail businesses. Revenues grew seven per cent overall, though they were roughly flat in its wholesale divisions.