EFG Hermes Holding — a universal bank in Egypt and the leading investment bank franchise in Frontier Emerging Markets (FEM) — announced on Wednesday that it recorded EGP 1.9bn in revenues in the first quarter (1Q) of 2022 — a 55% Y-o-Y increase.
Group net profits after tax and minority interest also grew by 18% Y-o-Y to EGP 345m, driven by solid performance across the group’s lines of business.
“EFG Hermes Holding’s diversified operations and holistic product offerings continue to drive our resilient performance and exceptional revenue growth, making us one of the fastest growing companies in our footprint,” said EFG Hermes Holding’s Group CEO Karim Awad.
“Our Non-Bank Financial Institutions (NBFI) platform is responding to consumer and corporate needs during high inflationary times. Net profits for the platform, together with results generated following the majority-stake acquisition of a commercial bank, generated half of our Group’s net profits after tax and minority.”
“On the sell-side of the house, I am equally pleased with our Investment Banking division, which closed five transactions valued at $301m, including the first IPO in the cosmeceutical space in Egypt and two regional M&A transactions. Meanwhile, our Brokerage Division continues to hold firmly onto its first place ranking in Cairo, Nairobi, and Dubai,” he added.
However, revenues generated by capital market and treasury operations contracted 24% Y-o-Y to EGP 294m, mainly due to a decline in net interest income that was partially attributed to a lower cash position following the acquisition of a majority stake in aiBANK.
The group’s operating expenses also rose 49% Y-o-Y to EGP 1.2bn, driven by the consolidation of aiBANK’s operating expenses, valU’s higher operating costs, and an increase in the group’s employee costs.
Furthermore, the group’s net profit before tax rose 67% Y-o-Y to EGP 677m, while net profit after tax and minority interest came in at EGP 345m — up by 18% from 1Q 2021, mainly on higher taxes and minority interest.
Additionally, the consolidation of aiBANK’s taxes, growing tax charges from expanding Egyptian operations (NBFI and Brokerage), and increased taxes from distribution of dividends to the holding led to a 143% Y-o-Y growth in tax expenses to EGP 229m.
“We look forward to driving more value for shareholders as the year progresses, and we are working to hit the milestones we’ve set out for 2022. In the quarters to come, we will continue to focus on garnering more opportunities in the GCC and cementing our foothold there in the investment bank space. At the same time, our NBFI platform will continue to grow as our BNPL player valU expands its operations and Tanmeyah continues to deliver solid revenues,” said Awad.
“On the commercial bank front, we will continue to support the new senior management team to drive change across the bank, create growth opportunities, and capitalise on the synergies inherent in our business model as a universal bank in Egypt. As an impact-driven organization, we will maintain laser-sharp focus on providing boundless financial opportunities that foster growth and create value for our stakeholder base and the communities in which we live and work.”