Mediobanca bolsters its London team

Dominic O’Neill
Published on:

Loans hire as international book grows; closer links to City’s investors.

Milan-based investment bank Mediobanca is recruiting outside Italy and moving more bankers to London, halfway through its three-year strategy to boost international revenues to 45% of the total.

In June, Mediobanca said its Monaco-based wealth management subsidiary CMB had been awarded a UK licence and that it had hired former Coutts banker Julian Soper as a managing director on London, in addition to Savio Figueredo (formerly of Barclays Wealth), also based in London. It is seconding other bankers from Monaco.

Stefano Marsaglia, London-based executive chairman and co-head of corporate and investment banking, is a director of the new UK wealth management unit and, according to the bank, will help ensure it makes the most of potential cross-selling opportunities.

It makes sense for the sell side to be in London as that's where the greatest proportion of European investors are based

Stefano Marsaglia, Mediobanca

Marsaglia, previously head of financial institutions at Barclays from 2010 to 2013 and before that global head of FIG at Rothschild, says the investment bank’s London office will also soon be joined by a new head of loans and structured finance, a business previously run from Milan.

The new loans hire in London follows the recruitment earlier this year of Philippe Deneux, also formerly at Barclays, to head France and Benelux for Mediobanca from Paris. The bank named Emmanuel Moulin, formerly CFO of the Eurotunnel Group, as Deneux’s deputy head shortly afterwards. In February, Marsaglia hired a new London-based managing director to head international equity capital markets, Felipe De Grado, formerly at Goldman Sachs.

Making moves

Since Marsaglia joined in December 2013 to help spearhead the international push, Mediobanca says it has already moved much of its markets-related activities to London. Stefano Rangone, head of equity capital markets, and most of its sales and research staff are now in London. Coverage bankers based in London include Francesco Canzonieri, head of financial institutions, who joined in 2014 from Barclays, in addition to Andre Rogowski and Davide Bertone, co-head of financial sponsors.

"It makes sense for the sell side to be in London as that’s where the greatest proportion of European investors are based," Marsaglia tells Euromoney.

Mediobanca’s most recent results, released in May and for the nine months to end of March (Mediobanca’s financial year ends in June) recorded an 18% increase in net profit to €466 million. It said higher investment-banking activity drove a 31% increase in fees and a 19% increase in total revenues.

It has been important for Mediobanca to support revenue growth in a very difficult [period] for the Italian economy
Luigi Tramontana, Banca Akros

The bank’s recent deals involving neither an Italian buyer nor seller include advice to Greece’s Piraeus Bank on the sale of its Egyptian operation to Kuwait’s Al Ahli Bank. It was the only non-French bookrunner, according to Dealogic, on Vincent Bollore’s selldown and capital raising in an accelerated bookbuild for French media group Havas in March. It was also bookrunner on some of the large bank capital increases over the past year, including Deutsche Bank’s €8.5 billion offering in June last year.

"It has been important for Mediobanca to support revenue growth in a period that has been very difficult for the Italian economy," says Luigi Tramontana, banks equity analyst at Banca Akros in Milan, commenting on the international expansion strategy. Nevertheless, he notes that Mediobanca’s international wholesale banking revenue growth did not outpace the Italian portion in the six months to end of December (the last time it released wholesale banking revenues split by geography, according to Tramontana).

Marsaglia says the bank derives around 40% of its business from outside Italy, not far off its 45% target for 2016. "Mediobanca is now a credible European player in corporate and investment banking," he says. "We are in line with our aim to be a truly European investment bank."

Good results

Results at the end of the first quarter show the international portion of Mediobanca’s loan book rose from 39% to 48% in the year to the end of March, although the loan book as a whole shrunk by 6%. Analysts commenting on those results were upbeat on the bank’s chances of increasing overall lending in coming months, citing a healthy corporate and investment banking deal pipeline.

Comments by Marsaglia suggest that increase could come partly from the international business. "We have a very strong IPO pipeline, and we can also increase market share in bonds and loans," he says. "We expect a strong increase in our cross-border advisory business."

But Dealogic’s bookrunner league table shows the bank ranked only 20th in equity in western Europe in 2015 to mid-June, down from 13th in the full year in 2014 and 15th in the full year in 2013.

As the bank seeks to build its distribution capabilities in London, Marsaglia hopes Mediobanca can further grow its international lending and acquisition-financing portfolio, potentially building its position in cross-border M&A – at the same time as boosting interest margins in an environment of low rates. "We are moving more and more to an originate-to-distribute model," says Marsaglia. "This will enable us to position ourselves better in event-driven financing, which tends to be a more profitable part of lending."