By Elena Vardon

Mediobanca Banca di Credito Finanziario posted a fall in profits and lower than expected revenue for the first quarter of fiscal 2025, leading its shares to sink more than 7%.

The Italian bank on Tuesday reported 330.0 million euros ($351.6 million) in net profit for the three months ended Sept. 30, a smaller-than-expected 6.1% fall compared with the same period a year prior. Analysts had penciled in a 319 million-euro result on average, according to a company-compiled consensus.

Revenue was roughly flat against a year prior at 864.6 million euros but missed the expected 884 million euros. The lender reported a 29% jump in income from fees and commissions on growth in its wealth management and corporate and investment banking units. While this was weaker than consensus expectations, it more than offset a 2% decline in net interest income--the difference between what banks earn on loans and pay clients for deposits--due to a promotional deposit campaign and the reduction of interest rates, it said.

Shares in Italy's third-largest publicly listed bank by market value fell to as low as 14.40 euros in early trading. Analysts noted that the weakness was likely due to the low-quality net profit beat--which was mostly driven by lower taxes and provisions--and lower core revenues. Despite the drop, the stock has gained 29% since the start of the year.

Mediobanca backed its guidance for fiscal 2025 and launched its previously-announced 385 million-euro share buyback program on Tuesday, which is set to run until mid-June.

"The priority for this financial year is to strongly enhance the distribution platforms, both physical and digital, enabling robust and sustainable revenue growth by all businesses even beyond the time horizon covered by the [2023-2026] Strategic Plan, despite the different macro scenario," Chief Executive Alberto Nagel said.

The bank's common equity tier 1 ratio--a key measure of balance-sheet strength--stood at 15.4% at the end of the period, 20 basis points higher than three months prior. It expects to deliver a ratio in the 15.5% to 16% range for the full-year.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

November 12, 2024 05:14 ET (10:14 GMT)

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