Business | Markets
EFG-Hermes reports 33.8% dip in profits
EFG-Hermes, the leading investment bank in the Arab world, yesterday reported a 33.8 per cent decline in net profits for the third quarter of 2008 to 576.5 million Egyptian pounds (Dh380.5 million), compared with the second quarter of 2008.
- Staff Report
- Published: 23:54 November 13, 2008
Dubai: EFG-Hermes, the leading investment bank in the Arab world, yesterday reported a 33.8 per cent decline in net profits for the third quarter of 2008 to 576.5 million Egyptian pounds (Dh380.5 million), compared with the second quarter of 2008.
Its net profit after tax and minority interest rose 2.8 per cent to 913.8 million pounds in the first nine months of 2008 compared with 889.2 million pounds in the same period last year, with a 59.8 per cent profit margin when the accrual of bonuses is excluded. (Accounting policies now allow the monthly accrual of bonuses).
Consolidated revenues
However, it reported a 37.5 per cent increase in consolidated revenues for the first nine months over the same period last year.
"As global economic challenges spilled over into regional markets, the firm's third quarter 2008 consolidated revenues grew a more modest 6.2 per cent to 576.5 million pounds; that figure represents a 33.8 per cent dip compared with second quarter 2008," the company said in a statement.
Meanwhile, net profit after tax and minority interest rose 2.8 per cent to 913.8 million pounds in the first nine months of 2008 compared with 889.2 million pounds in the same period last year, with a 59.8 per cent profit margin when the accrual of bonuses is excluded.
"There is no question these are challenging times for regional markets," says EFG-Hermes chief executive officer Yasser Al Mallawany.
Fundamentals sound
"That said, the Middle East's macroeconomic fundamentals are very sound. Look no further than the International Monetary Fund's latest projections for 2009, which forecast 5.9 per cent growth in the region against just 2.2 per cent growth globally."
Core revenue drivers for the first nine months included brokerage (46.8 per cent of total operating revenues), asset management (29.7 per cent), investment banking (15.5 per cent) and private equity (5.4 per cent).
"While we see the regional market downturn and low valuations rolling into the fourth quarter, we remain firmly optimistic about the long-term outlook for the Middle East and North Africa," said Hassan Heikal of EFG-Hermes.
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