08/10/2008
12.00 p.m
Press Release - Banca Mediolanum
Banca Mediolanum buys the Fonspabank mortgage portfolio relating to Mediolanum Customers worth € 170 mn
Banca Mediolanum announced that it has signed an agreement with Fonspabank today, a Morgan Stanley Group company, to purchase the share of Fonspabank mortgage portfolio granted to customers of Banca Mediolanum in the years 2005-2007.
The transaction will be effective after the final review and any approvals required from regulatory authorities, and involves a mortgage portfolio worth ~€170 million euro and 1,742 customers.
Banca Mediolanum decided to acquire the mortgage portfolio mainly to be able to manage the relationship with these customers directly, and extend to them as well the new, more favourable terms recently introduced for all Mediolanum mortgage holders. These customers will also benefit from a 0.64% average reduction in interest spread with no action required on their part. As a result of this agreement, they will save an aggregate total of 18 € million.
Banca Mediolanum is a retail bank with loans to private customers equal to 25% of their deposits. The remaining 75% is invested in highly liquid money market instruments. This has allowed the Bank to carry out this transaction using only a small part of its liquidity.
As soon as the shift of the mortgage portfolio to Banca Mediolanum is completed, these 1,742 customers as well will receive a letter from the Bank informing them of the new, more favourable mortgage terms with a lower interest spread.
Readers are reminded that on June 11, 2008 Banca Mediolanum unilaterally decided to reduce the interest rate charged to all its mortgage customers by 0.64% on average, which resulted in lower monthly payments. Moreover, Banca Mediolanum set up a “solidarity fund” entirely at its own expense to protect its primary-residence mortgage holders, in the event of severe permanent disability following injury or illness, from the risk of not being able to afford their monthly payments thus losing their home.
Milan, 10.08.08
