(Adds CEO comments)
MILAN, Aug 4 (Reuters) - Italy’s biggest investment bank Mediobanca raised its dividend by more than a third on Friday after posting record annual revenues and beating profit expectations.
Revenues in the financial year to June rose 7 percent to 2.2 billion euros ($2.6 billion), the bank said, boosted by its wealth management business and fees.
The dividend was raised by 37 percent to 0.37 euros per share for a payout ratio of 43 percent of earnings, above the lender’s 40 percent target.
In a conference call with journalists, CEO Alberto Nagel said the bank would maintain a flexible approach on payout policy with 40 percent remaining as guidance.
“If we see a positive trend in profits and capital in a year’s time we could take the same decision to raise the payout above 40 percent,” he said.
Some three years ago, Mediobanca opted to bet on traditional banking and started dismantling a portfolio of stakes in Italy’s top firms that had made it an influential powerbroker at the heart of the country’s business community for decades.
Mediobanca, which controls Italy’s biggest insurer Generali , is focusing more on wealth management to help boost profits. The division currently accounts for almost 40 percent of fee income.
In the year to June, net profits rose 24 percent to 750 million euros, above an analyst consensus provided by the bank of 720 million euros.
The bank confirmed its plan to reduce its 13 percent stake in Generali to 10 percent by 2019. But Nagel said if the growth of the bank required it, he was ready to sell down further.
“There are no dogmas as regards our stakes in companies ... earnings, capital and prospects are the only key variables,” he said.
Generali emerged as a potential bid target earlier this year when Italy’s biggest retail bank Intesa Sanpaolo revealed it was looking at a potential combination.
That plan was later scrapped but the move brought Europe’s No.3 insurer into the speculation spotlight.
$1 = 0.8418 euros Reporting by Stephen Jewkes and Gianluca Semeraro; Editing by Agnieszka Flak and Mark Potter