EFG Hermes reports highest net profit since 2010

Doaa Farid
4 Min Read
EFG Hermes head office (Photo courtesy of EFG Hermes)
EFG Hermes head office (Photo courtesy of EFG Hermes)
EFG Hermes head office
(Photo courtesy of EFG Hermes)

The Arab world’s leading investment bank, EFG Hermes, has reported EGP 538m in net profit on EGP 2.6bn in total revenues.

The latest figures represent the company’s highest net profit since 2010, it said in a report published on 19 March.

In 2013, EFG Hermes, which has its headquarters in Egypt, reported EGP 540m in net loss.

On a quarter-yearly basis, EFG Hermes registered in the fourth quarter (Q4) of 2014 net profit, after tax and minority interest, of EGP 131m out of EGP 702m in revenues.

“Our financial performance in 2014 came as we executed on a strategy of cost control, regional growth and the maintenance of dominance in our home market, all while laying the foundation for expansion initiatives that will allow us to begin further diversification of our revenues this year, in part through our entry into the very promising leasing space,” said Karim Awad, CEO of EFG Hermes, in a statement.

For over 30 years, EFG Hermes has provided companies with financial services including investment banking, asset management, securities brokerage, research and private equity.

The company operates in eight countries, including Egypt, the UAE, Saudi Arabia, Kuwait, Oman, Qatar, Jordan and Lebanon, aiming to further maximise their investment goals.

In 2014, EFG Hermes expanded its activities outside of the MENA region. In October, it signed a $208m deal to acquire a 49% stake in wind energy company EDPR France, which has a combined gross capacity of 334MW. The transaction came as part of the firm’s strategy of broadening its traditional role as a catalyst for institutional capital into MENA markets by helping its partners and investors tap compelling global opportunities.

“Our first investment beyond the borders of the Middle East and Africa is a natural outgrowth of our emphasis on infrastructure private equity and, moreover, marks the launch of our direct investment strategy,” Awad said at the time.

The deal was EFG Hermes’s second investment in the generation of green energy in less than 12 months, coming after an earlier commitment via the InfraMed fund to establish the Arab world’s first utility-scale wind farm in Jordan.

EFG Hermes faced unstable situation in June 2014 when business tycoon Naguib Sawiris allied with Beltone Financial to acquire 20% of Hermes. The total number of shares respondent to the purchase offer under the Sawiris-Beltone alliance amounted to only 54.4m of the total 114m shares, an EFG Hermes sources said at the time. The source explained that over 90% of Hermes shareholders refused the purchase offer.

The Sawiris-Beltone alliance was conditional on the purchase of 20% of Hermes, or 114m shares as offered by shareholders. A request to amend the purchase offer was required if they wish to purchase only 9%, the total of what was offered by shareholders. The acquisition bid didn’t go further.

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