The operations of Mediocredito Italiano, the leasing subsidiary of Intesa Sanpaolo, are to be absorbed within the main group’s within the next two years, the Italian banking group has said.
Under the 2018-2021 business plan, unveiled on Tuesday, the executive boards of Mediocredito Italiano and a number of other regional subsidiaries across Italy for were earmarked for absorption with the main Intesa Sanpaolo board. The business plan was unanimously approved.
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A spokesman for the group said that the group had not yet decided whether the subsidiaries’ customer-facing brands would be retained after the mergers, and added Intesa Sanpaolo would evaluate on a case-by-case basis.
The cut in the number of legal entities will be accompanied by the creation of a chief cost management officer at group level, in charge of driving the centralisation of deals, streamlining relations with suppliers and focusing the group’s effort to achieve the business plan’s objectives.
In the mid-corporate market, the group will push for a “originate-to-share” business model, covering loans’ full route from origination to securitisation. It will also reinforce its supply chain finance offer.
Finally, the group will increasingly decentralise management of foreign subsidiaries across eastern Europe, creating regional hubs in Croatia, Bosnia and Slovenia for the south east, and in Hungary, Slovakia and the Czech republic for central Europe.
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By GlobalDataThe business plan was unveiled contextually to Intesa Sanpaolo’s consolidated results for 2017.
Net operating income was €17.8bn, up 5.3% year-on-year. Profits before tax totalled €7.3bn, more than doubling from 2016’s €3.1bn. This was largely thanks to a public contribution of €3.5bn from the Italian state, as compensation for Intesa Sanpaolo’s bail-out of two regional banks in the past year.
The division comprising Mediocredito Italiano, together with other SME and retail banking businesses, recorded net operating income of €8.8bn, up 3% on 2016, accounting for over half of the group’s total. Net profits were substantially down to €1.3bn, a 24.3% year-on-year fall.
