Mediobanca was held under pressure to improve the returns for its shareholders. This led to the planned selling of almost all its large stakes in major companies. This would mean an end to half a century of playing kingmaker to Italy's corporate world and focus on banking.
Chief Executive Alberto Nagel for Mediobanca said on Friday that the company aimed to cut Eur2 billion of equity holdings. This will be done through sales and writedowns to focus more on its banking operations. The move is said to push the bank in the red this year.
Mediobanca was forced to relinquish control after introduction of new bank capital rules. This made it costly to hold unprofitable investments especially with Italy's economic crisis. The Milan-based group planned immediate book writedowns of Eur400 to reflect the market valued of the company's major holdings. This would pave for its sale. Ending in June 30, the move will result in a loss of roughly Eur200 million for the financial year.
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