Mediobanca, the once upon a time powerhouse of Italy’s financial and corporate system, has lost most of its grip on financial and corporate Italy, as Unicredit and Intesa emerged as the two new pillars of the Italian banking landascape while the big global investment banks from Germany, France and the US massively entered the country.
Mediobanca was invented in 1946 by Raffaele Mattioli, a founding father of Italy’s postwar financial system and then chairman of Banca Commerciale Italiana, together with Enrico Cuccia, who would become an icon of the Italian business community in the following decades. Under the Cuccia ruling Mediobanca, despite it was indirectly state-owned, grew up as a true merchant bank with a strong influence of the shareholding structure of almost all the major industrial business of Italy: from Fiat to Montedison, from Fondiaria to Pirelli. Via Filodrammatici (now piazzetta Cuccia after the name of the godfather), the Headquarters of Mediobanca just round the corner of Milan La Scala Opera House, soon became the address where big corporation names went in pilgrimage during the booming Sixties and the volatile Seventies of last century, first seeking alliances and capitals in order to boost the growth of their business, then to ask Cuccia to fix things as the country experienced the first post WWII economic and social crisis.
In the following decade Cuccia became possibly the most powerful man in the country, not only in finance and banking. He peaked when managed to obtain from a reluctant government the privatisation of Mediobanca and became a true kingmaker, even more powerful than legendary Fiat boss Gianni Agnelli. Mediobanca became the strong box of the Italian financial system and Cuccia had the key. As an ancient roman emperor, Cuccia was keen to select and grow up his successor, Vincenzo Maranghi, leaving him the formal power but remaining effectively in charge as honorary chairman until his death in the spring of year 2000. In 1998 Mediobanca was such a powerful war machine that was capable to successfully handle the hostile takeover on Telecom It
alia, just after its privatization, when it was controlled by an hardcore group of shareholder led by Ifil, the holding company of the Agnelli family. It was the climax and the beginning of the decline as well. Maranghi was fired in 2003 (and died of cancer 4 years later) and the bank top posts were taken over by Alberto Nagel and Renato Pagliaro, who have been at the helm of Mediobanca until now. Under Nagel and Pagliaro, against a backdrop of declining economy and erupting financial crisises, Mediobanca was key again, but in a very different fashion. It had to fix, fix and fix it again. It had to fix Telecom Italia when together with Intesa, Generali and Spain’s Telefonica substituted Pirelli as main shareholder. It had to fix Generali, where Mediobanca holds a strategic 5% stake, as chairman Geronzi and CEO Perissinotto were fired amid stormy confrontations with shareholders. And it had to fix Fondiaria, the second insurer of the country which came into serious trouble when his main shareholder Ligresti went out of money, by merging it into the Unipol insurance and banking group.
And now it has to fix itself as its market value is less than the sum of its major holdings (Generali, Telecom, publishing group
). Main observers and analysts believe Mediobanca should sell the stock-holdings which once were the source of its power rather sooner than later and transform itself into a “pure” investment bank, with additional consumer credit and fast growing online retail business.