Italy's best-known investment bank Mediobanca will announce on Friday it is ready to gradually exit all of its strategic holdings except life insurer Generali, a source with direct knowledge of the situation said.
The Milan-based bank, which owns stakes in some Italy's biggest companies, will present a new business plan to focus on its banking business and break with years of meddling in Italy's top corporate developments.
Shrinking returns amid a deep economic crisis at home have prompted the bank to rethink its corporate investment strategy.
The bank's 2013-2016 plan will call for retrenching its core investment banking operations and putting greater focus on its retail bank, a source of stable liquidity, as well as on its high-margin consumer finance division.
"The key message is more banking, less holdings," the source, who has seen details of the plan, told Reuters on condition of anonymity.
Profitability, and not political influence, will be the main measure to assess whether or not to keep an investment, the source said.
Mediobanca declined to comment.
Founded in the aftermath of World War Two by banker Enrico Cuccia, Mediobanca has been instrumental in shaping the country's business landscape. But shareholders and the new management believe that era is over, insiders have told Reuters.
GENERALI STAKE TRIMMED
Mediobanca's biggest financial holdings are a 13.2 percent stake in Europe's biggest life insurer Generali, about 13.7 percent in Italian publisher RCS Mediagroup and 11.6 percent of Telco, the holding company which controls Telecom Italia, and a 4.6 percent stake in tyremaker Pirelli .
The stake in Generali, which is performing well under new boss Mario Greco, has become expensive in bank capital terms, will be trimmed by around 3 percent, the source said.
The partial sale of the stake will follow a strict schedule to be unveiled in the business plan presentation, the source added.
_0">Chief Executive Alberto Nagel will also signal that his bank is planning to exit shareholder pacts now existing at RCS, Telecom Italia and Pirelli, paving the way for an outright exit of the stakes in due time.
This may take time as Telecom Italia shares, for instance, are currently trading at half their book value in Mediobanca's accounts.
Mediobanca is controlled by a range of Italian and foreign investors which together own 42 percent of the bank. Competitor UniCredit is its top investor with a stake of 8.7 percent.
(Editing by Jason Neely)
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