The positive earnings came despite the inherent seasonality of the business during the third quarter with the slowdown for summer and the month of Ramadan, the company said, adding that this is its third consecutive quarter of profit.
Core investment bank operations were the primary drivers of growth, with the net operating profits rising 487% YoY to EGP 85m in Q3 2014. This translates into a net profit after tax and minority interest of EGP 43m in the quarter, compared to a net loss of EGP 11m in the same period of 2013.
Fee and commission revenue, which includes the four core EFG Hermes business lines of Securities Brokerage, Investment Banking, Asset Management, and Private Equity, rose 52% YoY to EGP 211m in Q3 2014.
The company said that the growth was mainly driven by higher brokerage commissions as liquidity improved in most of the firm’s trading markets and stronger investment banking revenue “which reflects the substantial market share in Egypt and growing market share in the GCC”.
EFG Hermes added that the management’s ongoing emphasis on cost management led to a 15% YoY drop in total operating expenses to EGP 149m in Q3 2014 due to lower employee expenses and other operating expenses.
At the commercial banking arm, Credit Libanais reported a net profit of $15.9m in Q3 2014, a decline of 11% YoY as the difficult geopolitical environment continued to impact operations, the company said. However, on a quarter-on-quarter basis, net profit increased 38%. The bank’s total assets stood at $9.0bn with a loan-to-deposit ratio of 36.3%.