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Introduction & Market Context
Banca Mediolanum SpA (BIT:BMED) released its H1 2025 results on July 31, showcasing solid financial performance despite interest rate headwinds. The Italian financial services company reported a 6% year-over-year increase in net income to €477.3 million, with shares closing at €17.27, up 0.58% following the announcement.
The results highlight Banca Mediolanum’s resilience in navigating a challenging interest rate environment, with strong growth in commission income and managed assets helping to offset declining interest income. The bank’s integrated business model, combining banking, investment, and insurance services delivered through its network of financial advisors, continues to drive customer acquisition and asset growth.
H1 2025 Financial Performance Highlights
Banca Mediolanum’s financial results for the first half of 2025 showed mixed performance across key metrics, with fee-based revenues compensating for pressure on interest margins.
As shown in the following economic and financial highlights chart, the bank reported net commission income of €644.4 million, up 10% year-over-year, while net interest income declined by 12% to €366.8 million due to the falling interest rate environment:
The contribution margin increased by 2% to €1,021.2 million, while operating margin rose 1% to €570.6 million. Market effects contributed €67.9 million, representing a significant 65% increase compared to H1 2024. The cost-to-income ratio remained stable at 39.1%, demonstrating the bank’s continued operational efficiency despite inflationary pressures.
On the business side, Banca Mediolanum achieved impressive growth in several key areas, particularly in managed assets and lending activities:
Total net inflows reached €6.11 billion, up 8% year-over-year, with net inflows into managed assets surging by 47% to €4.54 billion. Total assets under administration and management grew by 12% to €144.42 billion. The bank also reported strong growth in lending, with loans granted increasing by 48% to €1.86 billion, driven particularly by a 75% jump in mortgage volumes.
Balance Sheet Strength and Capital Position
Banca Mediolanum maintained a robust capital position, with a CET1 ratio of 22.4%, well above regulatory requirements. The bank’s strong liquidity position is evidenced by an LCR of 422% and NSFR of 189%, providing ample flexibility for future growth initiatives.
The following chart illustrates the bank’s balance sheet structure, highlighting the composition of assets and liabilities:
The bank’s credit book showed healthy growth of 7% year-over-year to reach €18.14 billion, with mortgages representing the largest component at €12.86 billion. The quality of the loan portfolio remained strong, with a cost of risk of 15 basis points on a rolling 12-month basis.
The long-term trend in the credit book demonstrates consistent growth, with a 10-year CAGR of 12%:
Business Growth and Customer Acquisition
Banca Mediolanum continued to expand its customer base and financial advisor network during the first half of 2025. The bank added 106,100 new customers, bringing the total to 1,983,800, representing 3% growth since the end of 2024.
The Family Banker network grew by 3% to 6,604 advisors, while the number of Private Bankers and Wealth Advisors increased by 8% to 980. Assets managed by these specialized advisors reached €46.58 billion, up 8% since the end of 2024.
The bank’s asset allocation strategy for mutual funds and unit-linked policies maintained a balanced approach, with 55% in equity, 44% in fixed income, and 1% in cash and other investments:
Strategic Initiatives
Banca Mediolanum highlighted several strategic initiatives driving its growth and resilience. The bank’s automatic investment services, including the Intelligent Investment Strategy (IIS), continue to attract significant inflows, with money market AUM increasing by 41% to €4.03 billion since the end of 2024.
The IIS service employs a sophisticated approach to gradual market entry, automatically increasing investment amounts during market downturns:
This strategy has proven effective in historical market conditions, as illustrated in the following chart:
Another key strategic focus is developing the next generation of financial advisors through the "Banker Consultants" program. This initiative provides dedicated training and mentorship from senior advisors, with 527 Banker Consultants already working as licensed financial advisors and an additional 152 currently in training.
The bank also maintains a strong competitive position in the Italian financial advisor network market, with significant market share across various product categories:
Outlook and Forward-Looking Statements
Looking ahead, Banca Mediolanum has raised its guidance for managed asset inflows to €8-8.5 billion for the full year, reflecting confidence in its growth strategy despite challenging market conditions. However, net interest income is expected to decrease by 3% in 2025, with 2026 levels anticipated to remain flat.
The cost-to-income ratio is projected to stay below 40%, indicating continued operational efficiency. The bank also expects to increase its base dividend, supported by strong capital generation.
CEO Massimo Doris emphasized the bank’s integrated model as a key driver of success, stating, "Our strength lies in offering banking, investment, insurance, and protection solutions through an integrated model." He also expressed confidence in the bank’s strategic direction, saying, "We know where we’re going, and we know how to get there."
While the bank faces challenges from declining net interest income and potential market volatility, its diversified revenue streams, strong capital position, and growing advisor network position it well to navigate the evolving financial landscape.
Full presentation:
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