EFG Hermes E: announces a near doubling of its revenues to EGP 2.3 billion in 3Q22

By Jerrell C. Esser Last updated Nov 16, 2022

EFG Hermes announces a near increase in revenue to EGP 2.3 billion in 3Q22

Strong results from the Investment Bank platform and NBFI, supported by the consolidation of aiBANK, fueled the Group’s exceptional revenue growth in 3Q22

Cairo, November 16, 2022

EFG Hermes, an impact-focused universal bank in Egypt and the leading investment banking franchise in frontier and emerging markets (FEM), today announced its results for the third quarter of 2022. The group’s revenues increased jumped 95% year-on-year to reach EGP 2.3 billion in 3Q22, driven by strong results recorded by the Investment Bank and Non-Bank Financial Institution (NBFI) platform as well as the consolidation of aiBANK’s revenues during the the period. This translated into a Group net profit before tax of EGP 650 million, up 70% year-on-year in 3Q22 and reflecting the strong performance of each of the Group’s business lines.

EFG Hermes Holding Group CEO Karim Awad commented on the results: “Despite a challenging global economic environment fueled by growing inflationary pressures, global supply chain constraints and the recent devaluation of the Egyptian pound, the group released an impressive set of results for the period on the back of our proven business model and the diversity of our operations On the investment banking side, we continued to showcase the success of our advisory services world-class and our innovative product offerings, having executed a total of eight capital market M&A, debt and equity transactions, including two major cross-border acquisitions, in a fully-fledged financial services ecosystem. the acquisition of Fatura by Tanmeyah as well as the acquisition of Paynas by valU, the vertical is growing steadily. er the synergies of its brand universe. In terms of our commercial banking activities, the consolidation of aiBANK continued to support the Group’s performance, with the bank’s revenues increasing every quarter.”

EFG Hermes reported net operating profit increased 70% year-on-year to EGP 716 million, while Group net profit after tax and minority interests fell 5% year-on-year to EGP 337 million due to higher taxes and higher minority interests resulting from the consolidation of aiBANK.

Meanwhile, Group operating expenses jumped 108% year-on-year to EGP 1.6 billion in 3Q22, driven by aiBANK expense consolidation and higher operating expenses investment bank and NBFI platform due to rising inflationary pressures and the devaluation of the Egyptian pound during the period. .

investment bank

Turning to the performance of Investment Bank, the business saw a solid revenue increase of 60% year-on-year to EGP 1.1 billion thanks to strong performance across all verticals in 3Q22. Sell-side revenue increased 42% year-on-year to EGP 597 million, driven by growth in the Investment Banking and Brokerage divisions in 3Q22. Investment Banking revenue soared 96% year-on-year to EGP209m thanks to a pipeline of lucrative deals executed by the division, after closing eight large deals in the quarter worth EGP1.6bn usd. This includes advising on Abu Dhabi Ports Group’s first investment in Egypt in two shipping and terminal operating companies and the acquisition by Saudi Arabia’s Public Investment Fund of a minority stake in Egypt’s leading consumer electronics supplier, B.Tech, to name a few. Meanwhile, brokerage revenue grew 24% year-on-year to EGP 388 million on stronger executions in the GCC in 3Q22.

Alongside this, buy-side revenue grew 31% YoY to EGP 130m in 3Q22, driven by higher management fees that fueled a 40% YoY increase in asset management revenue. assets at EGP 97 million, as well as a 12% year-on-year increase in private income. Equity revenue at EGP 33 million in 3Q22. Meanwhile, despite lower interest income, income from holding and treasury activities more than doubled to EGP 363 million in 3Q22, driven by higher foreign exchange gains and lower unrealized losses in during the period.

NBFI platform

On the NBFI platform, the business saw a 29% year-on-year increase in revenue to EGP 664 million in 3Q22, driven by the strong performance of the Buy-Now, Pay lifestyle -Later (BNPL) of the group allowing fintech players to value as well as the leasing and factoring platform EFG Hermes Corp-Solutions. valU’s revenue grew 57% year-on-year to EGP 153 million, with the company ranking second in market share with 29.3% year-to-date 2022. At EFG Hermes Corp- Solutions, the leasing business recorded a dramatic revenue increase of 125% year-on-year to reach EGP 110 million in 3Q22, mainly due to a net securitization gain of EGP 64 million during the period. As of August 2022, EFG Hermes Corp-Solutions’ leasing business ranked third year-to-date in market share at 10.5%, while its factoring business recorded a market share of 15.7%, ranking second.

aiBANK

At aiBANK, revenue grew 3% QoQ to EGP 580m, driven by interest income growth resulting from an 11% QoQ increase in gross lending to EGP 21bn in 3Q22. aiBANK’s loan-to-deposit ratio climbed to 46% in 3Q22 from 44% in the prior quarter. Net profit after tax decreased to EGP 113 million in 3Q22 from EGP 149 million in 2Q22, mainly due to lower income from associated companies and other sources of income during the period.

Awad concluded: “Our results over the past period confirm the Group’s ability to achieve the objectives it has set for the final stretch of the year, positioning us perfectly to end 2022 on a high note. acquisition of aiBANK will propel our ambitions to become a service powerhouse in our home market, Egypt. At the same time, our NBFI platform is building what we envision to be an end-to-end financial services provider, enabling people and to businesses at every stage of their growth.Bank will leverage the exceptional track record on both the buy and sell side of the business to maintain our position as the advisory partner of choice.These three verticals anchor our ability to capitalize on attractive opportunities from all sides of the In saying this, the resilience and unwavering commitment of our talented and hardworking associates is the driving force of EFG Hermes’ growth and which will cement our position as the leading provider of cutting-edge financial services across our entire footprint.”

-Ends-

EFG Hermes Holding’s 3Q22 financial results and management commentary are available here.

About EFG Hermes Holding

With a current footprint spanning 14 countries on four continents, EFG Hermes Holding (EGX: HRHO.CA – LSE: EFGD) has grown over 38 successful years from a pure-play investment bank in the MENA region to an impact-focused universal bank in Egypt with the leading investment banking franchise in frontier and emerging markets (FEM). With our proven track record and a diverse team of talented employees, we provide a wide range of financial services, including advisory, asset management, securities brokerage, research and private equity, to the entire GEF region. In our home country, we have the fastest growing Non-Banking Financial Institutions (NBFI) platform with operations spanning Microfinance, Leasing, Factoring, Buy-Now Pay-Later (BNPL), digital payment solutions, mortgage financing and insurance.

And with its latest acquisition of a majority stake in aiBANK, the company has been able to provide commercial banking products and services.

Through its three verticals, Investment Banking, Non-Banking Financial Institutions (NBFIs) and Commercial Banking, the group is uniquely positioned to consistently bring disruptive financial products and services to market, delivering a holistic portfolio that serves its growing base of individual and business customers of all sizes.

Learn more about us at www.efghermes.com and stay connected with us:

For more information, please contact:

The EFG Hermes Holding Public Relations Team

PublicRelations@EFG-Hermes.com

May El Gammal

Group Chief Marketing & Communications Officer of EFG Hermes Holding

melgammal@efg-hermes.com

Note on forward-looking statements

In this press release, EFG Hermes Holding may make forward-looking statements, including, for example, statements about management’s expectations, strategic objectives, growth opportunities and business prospects. These forward-looking statements are not historical facts but represent only EFG Hermes Holding’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and beyond management’s control and include, among other things, volatility. financial markets; actions and initiatives taken by current and potential competitors; general economic conditions and the effect of current, pending and future laws, regulations and regulatory actions. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.