The stock market reacted negatively to Mps-Mediobanca's new industrial plan, resulting in a significant drop in Mps's share value despite ambitious promises of high dividends and net profits by 2030.
The new industrial plan of the Mps-Mediobanca group was met with a significant backlash from the stock market, leading to a 6.7% drop in Mps's share price to 8.29 euros per share. This reaction was likely unexpected for CEO Luigi Lovaglio, who had presented an ambitious project that promised to deliver 16 billion euros in dividends over the next five years, representing a 12% annual yield, and achieving a net profit of 3.7 billion euros by 2030.
Lovaglio highlighted that Mps, in collaboration with Mediobanca, would offer shareholders the highest dividend in Europe within the banking sector over the next five years while maintaining a surplus of three billion euros in capital. This excess capital would provide the flexibility needed to pursue valuable growth opportunities and enhance the capital returned to shareholders. Furthermore, he mentioned the possibility of advancing dividend payments and considering acquisition opportunities in Italy and Europe.
Despite these assurances and plans, the market's response was overwhelmingly negative, reflecting a lack of confidence among investors in the viability of the proposed strategy. The sharp decline in Mps shares suggests that investors may doubt the feasibility of achieving the ambitious goals laid out by the management, raising questions about the future trajectory of the bank and its impact on the broader financial landscape in Italy.
