Over the past 15 years, we have profoundly transformed our corporate structure and business model, evolving from a bank organized as a holding company to a specialized financial group. We have sold non-strategic investments and dissolved shareholders’ agreements and cross-shareholdings.
Since June 2013, we have sold investments worth a total of €2 billion, realizing capital gains of around €700 million. This process was substantially completed during the term of the 2016-2019 plan, over the course of which we sold the remaining holdings in our investment portfolio, with the exception of our 13.21% stake in Assicurazioni Generali. Our investment in this insurance company is now the Insurance division’s main asset.
In the next three years, the Insurance division will continue to contribute positively to revenues (expected to grow by 6% CAGR to reach €0.5bnin BP26T) and profit creation at Group level, while at the same time adding stability and visibility. The investment’s rationale lies in its excellent and increasing profitability (RORWA up to 3.2% in BP26T), which will be further strengthened with the permanent application of the Danish Compromise, its strong decorrelation from macro trends, high cashflow generation, and the value option which it represents for the Mediobanca Group in terms of offering available resources that can be used in acquisitions to grow the company
It is also a valuable option for the future: the partial sale of our investment in Assicurazioni Generali would be a source of capital for other, potentially significant acquisitions to grow our core businesses.
The investment in Assicurazioni Generali is an integrated, consistent part of our business model because it guarantees substantial revenue from the insurance business (another important diversification factor) today and could be a future source of capital for the banking business tomorrow.