EFG Hermes Holding, the leading financial institution with a universal bank in Egypt and the leading investment bank franchise in Frontier and Emerging Markets (FEM), announced today its results for the three months ended 31 March 2023. The Group recorded a 129 per cent Y-o-Y increase in revenue to 4.5 billion Egyptian pounds in 1Q23, primarily driven by growth in treasury operations, as well as solid results generated from the Investment Bank and aiBANK during the period.
Despite growing inflationary pressures across Egypt and the impact of the Egyptian pound’s devaluation on regional office expenses when translated to local currency, which saw the Group’s operating expenses gain 148 per cent Y-o-Y during the quarter, operating profit rose 99 per cent Y-o-Y to 1.5 billion Egyptian pounds, and net profit before tax grew 108 per cent Y-o-Y to 1.4 billion Egyptian pounds. EFG Hermes Holdings’ net profit after tax and minority interest climbed 157 per cent Y-o-Y to 885 million Egyptian pounds in 1Q23.
Commenting on the results, EFG Hermes Holding’s Group CEO, Karim Awad says, “I am delighted to report that the Group delivered a remarkable performance for the first quarter of 2023, demonstrating the resilience and dynamism of our business model. Despite the challenging global macroeconomic environment, we generated strong results.
"Our core operational platforms supported our performance for the period, especially on the sell-side of the house. Our Investment Banking division executed a strong pipeline of deals, concluding two equity and seven debt transactions worth an aggregate of $2.9 billion. These included the landmark IPOs of Abraaj Energy Services on the Muscat Stock Exchange and ADNOC Gas on the Abu Dhabi Securities Exchange — the largest listings on their respective stock exchange — further cementing our position as the region’s investment bank of choice.”
The Investment Bank delivered over a three-fold increase in revenue to 3 billion Egyptian pounds in 1Q23 versus 901 million Egyptian pounds in 1Q22. Performance from core operations came strong in 1Q23, particularly from the sell-side, which saw its revenues rising 69% Y-o-Y to 837 million Egyptian pounds and was driven by a stellar 238 per cent Y-o-Y surge in Investment Banking revenue to 216 million Egyptian pounds and a 44 per cent Y-o-Y increase in brokerage revenues to 621 million Egyptian pounds.
At EFG Hermes Holdings’ NBFI platform, revenues gained 15 per cent Y-o-Y to 689 million Egyptian pounds in 1Q23, primarily driven by valU, which booked strong revenue growth of 78 per cent Y-o-Y to 254 million Egyptian pounds due to securitisation gains coupled with increased sales following an expansion in the consumer finance platform’s merchant network. The group’s factoring activities, under EFG Hermes Corp-Solutions, increased its revenues by 72% Y-o-Y to 31 million Egyptian pounds in 1Q23. Leasing revenues were broadly unchanged, edging down 2 per cent Y-o-Y to 44 million Egyptian pounds, while Tanmeyah’s revenues slipped 11 per cent Y-o-Y to record 351 million Egyptian pounds, pressured by lower sales Y-o-Y during the period.
At aiBANK, revenues climbed 65% Y-o-Y to 727 million Egyptian pounds in 1Q23, driven by a 56 per cent Y-o-Y increase in net interest income mainly due to growth in interest-earning assets and increased allocation of variable-interest-rate assets, in addition to a 352 per cent Y-o-Y surge in net fees and commission income which was driven by an improvement in trade finance volumes. aiBANK reported a net profit after tax of 171 million Egyptian pounds, up 25 per cent Y-o-Y (of which EFG Hermes Holdings’ share is 87 million Egyptian pounds) in 1Q23.
Awad concludes: “Our strong track record at successfully navigating turbulent operating environments not only leaves me confident in our ability to respond to headwinds with agility and preserve our growth trajectory but cements the importance and power of capital when it comes to driving change for businesses, for people, and indeed for the economy. Our performance reflects our commitment to excellence, innovation, and growth for us as a group and for the stakeholders who place their confidence in us daily.
"As we continue to leverage our positioning as a universal bank in Egypt with a market-leading investment banking franchise, I remain confident in our ability to navigate the uncertainties ahead and seize opportunities in our home market of Egypt and the wider FEM space. We are well-positioned to capitalise on our strong brand, end-to-end financial service universe, and talented teams across our geographic and operational footprint to deliver sustainable value to our shareholders, clients, and communities where we live and work.”