EFG-Hermes net profit dips in second quarter

Dubai: Egyptian investment bank EFG-Hermes Sunday said second quarter net profit almost halved compared with a year ago as turbulent global capital markets weighed on fee and commission revenues.

EFG, in an emailed statement, said net profit in the three-month period was 96.7 million Egyptian pounds (Dh62.89 million). The company made a net profit of 176.4 million pounds in the year earlier period, according to Zawya.com data.

The company said fee and commission revenue in the second quarter declined 11 per cent to EGP205 million, compared with a year ago.

"Volumes traded declined 50 per cent on average in second quarter of 2010 over second quarter of 2009 levels and valuations were nearly flat," EFG said.

"The regional capital markets were affected by the global capital market turbulence onset by the Greek financial impasse," it added.

Revenues booked from the EFG's capital markets and treasury operations more than tripled in the second quarter to EGP141 million on the back of sizeable foreign exchange gains resulting from the depreciation of the Egyptian pound as well as 58 million pounds of net interest income.

EFG Hermes said adverse global market conditions also affected the performance of its investment banking division as investor appetite was damped by underperforming markets. "This in turn hindered the closing of several transactions slated for completion during second quarter of 2010," it said.

In January, EFG sold its entire stake in Lebanon's Banque Audi SAL Audi-Saradar Group for $913 million (Dh3.36 billion) saying it could now seek out new investment opportunities with the fresh cash.