By Nkiruka Nnorom
EFG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), has reported a 12 percent in revenue to EGP 5.5 billion for the year ended December 31, 2020, from EGP5.0 billion in 2019 despite the impact COVID-19 had on global economies and capital markets.
The Group’s solid results, according to the firm in a statement, were propped up by its buy-side business, where revenues grew 33 percent Year-on-Year (Y-o-Y) to EGP 881 million in FY20.
The asset management subsidiary also delivered a 28 percent Y-o-Y increase in revenues to EGP 413 million due to higher incentive fees booked by FIM during the year, while the private equity business generated revenues of EGP 468 million, up 37 percent Y-o-Y on the back of the Vortex Solar exit during the review period.
“2020 was a year unlike any other, not just for us at EFG Hermes, but for business the world over.
“Despite its challenges, however, I am proud to report that the year was marked by numerous accomplishments that served to highlight our perseverance,” said EFG Hermes Holding Group CEO, Karim Awad.
“Our results are not only a testament to the resilience of our business model and the agility of our operations, but to the commitment of our individual teams who have time and again proven that they can adapt to the most challenging of situations, achieve operational excellence, maintain our market leadership, and position the Group to emerge even stronger.”
The Non-Bank Financial Institution (NBFI) platform contributed positively to the Group’s overall results, with revenues climbing 13% Y-o-Y to EGP 1.4 billion as a result of year-on-year growth across all its businesses.
According to the company, the results were largely driven by the Group’s consumer finance business, ‘valU’, which delivered stellar results, where revenues more than quadrupled to EGP111 million in FY20.
The Group’s leasing and factoring businesses, which merged to form EFG Hermes Corp-Solutions in 2020, reported revenue increases of 17% Y-o-Y and 178% Y-o-Y to EGP184 million and EGP25 million, respectively in FY20.
Tanmeyah revenues inched up 3% to EGP1.1 billion as its portfolio remained largely flat in FY20.
However, COVID-19 heavily impacted global capital market sentiment, thereby dampening the performance of the Group’s sell-side business, where revenues declined to EGP1.2 billion in FY20.
“With dampened equity capital market activity pressuring performance on our sell-side business, we were still able to maintain our market positions across our brokerage operations, leading the ranks in Egypt, Kuwait, Dubai and Kenya.
“Meanwhile, our investment banking division managed to secure a total of 24 transactions worth an aggregate value of USD1.7 billion in 2020, the highest number of transactions in a single year.
“We continued to leverage our expansive footprint and access to a comprehensive network of investors to grow our asset management operations, and our strategic exit from Vortex Solar significantly buoyed to our top-line performance.
“At our NBFI platform, we reaped the rewards of the merger of our factoring and leasing operations under EFG Hermes Corp-Solutions and recorded double-digit growth across both lines of business,” Awad added.