STEP 1-Mediolanum Qtr3 profit falls, raises interim dividend – Reuters Italy

       

(Adds statement Ennio Doris analysts on a conference call)

       

MILAN, November 13 (Reuters) – Net income down to 81.9 from 101.7 million euro for the Mediolanum Group in the third quarter, despite an increase in total revenues of about 350 million from 340.5 million the bottom line was affected by higher costs associated with announced development projects, especially in the technology, which in the end of September amounted to about 50 million.

       

In a statement the group points out the trend of continuous increase in recurring revenues, or management fees (175.13 million to 144.4 million), which offset the expected decline in net interest income (58.6 million to 74 million). The period also saw net losses from investments at fair value to about one million compared to income of 4.75 million in the third quarter of 2013.

       

During the conference call with analysts, the CEO Ennio Doris has confirmed that net interest income at year-end will be 50 million lower compared to 2013, while for 2015, “if there is a drop, it will be modest.” The guidance for next year is that of a flat net interest income “on the one hand, because it costs less also the collection and, secondly, because we’re also increasing the retail with mortgages and loans, is expected to grow in 2016,” he pointed out.

       

The performance fees in the fourth quarter are expected to remain in line with those of the third and in 2015 will be “difficult,” according to Doris, replicating collection levels seen in 2014. In October, the variable fee amounted to 4 million.

       

After 80 million in additional estimated costs for 2014 ($ 50 million for new IT projects and the rest due to the increase in the volume of business and recurring costs), costs will rise further in 2015 to 60 million “because next year we have a number of projects’ investment also technology; a flattening of the growth in costs will occur only in 2016.

       

Mediolanum has promised to pay the 2014 dividend higher than that of 2013 having resolved to distribute an interim dividend of € 0.15 compared to 0.10 last year. The dividend will take place on 24 November.

        
       

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