By Nkiruka Nnorom
EFG Hermes Holding has announced eight percent increase in revenue to EGP 4 billion for the nine month ended September 30, 2012 and a 26 percent Year-on-Year (Y/Y) increase in net profits to EGP 1.1 billion.

“EFG Hermes’ core operations have continued to deliver solid performances and to play a vital role in fortifying the Group’s position as the flagship financial services corporation in Frontier Emerging Markets,” said EFG Hermes Holding’s Group CEO Karim Awad.

“Our NBFI platform has continued to perform exceptionally well, with our microfinance platform, Tanmeyah, booking a record high portfolio value of EGP 3.5 billion, the highest since Tanmeyah’s inception.

Moreover, our popular award-winning Buy-Now, Pay-Later (BNPL) fintech player, valU, continued to expand its relationships with merchants and grow its portfolio of clients. At our sell-side operations, I am pleased with our investment banking division, where the team closed a record-breaking nine transactions worth over USD2.6 billion in a single quarter.

This milestone is a continued testament to the strength of our operations and well-established capacities to secure a healthy pipeline of deals across the capital markets space,” added Awad.

In quarterly terms, the Group recorded a top line of EGP 1.2 billion and a net profit after tax and minority interest of EGP 356 million in Q3’21, down year-on-year; as the comparable quarter included strong EGP 349 million of incentive fees from Private Equity’s Vortex III exit and included strong unrealized gains on seed capital revaluation in the comparable period of last year.

For the third quarter of 2021, EFG Hermes’ sell-side revenues grew by 45% Y/Y to EGP 406 million, primarily driven by standout performances by the Group’s investment banking and brokerage divisions.
On the investment banking front, revenues grew by 184% Y-o-Y to EGP 107 million, driven by strengthening advisory fees and a higher number of transactions for the period.

Meanwhile, revenues from the brokerage division increased by 23% Y-o-Y to EGP299 million in Q3’21, driven by the higher revenues reported by the Group’s operations in Egypt, Kuwait, and its structured products desk.

The Group’s buy-side revenues declined by 74% Y-o-Y to EGP 115 million in Q3’21 primarily due to the high base effect associated with EGP349 million in incentive fees from the Vortex Energy III exit generated by the private equity division in the comparable period. Private equity revenues stood at EGP29 million Q3’21. Nonetheless, the Group’s asset management division recorded a top line increase of 32% Y-o-Y to EGP86 million in Q3’21, reflecting the increase in management fees reported by FIM.

On the outlook, Awad said: “Looking ahead, we are excited about the headways we are making in line with our strategy to transform into a full-fledged universal bank in Egypt, as the acquisition of the Arab Investment Bank (AIB) is near finalization.

The Holding company today is poised to generate increased value for our shareholders with its diverse portfolio. Parallel to this, I truly look forward to meeting our clients from key investors to global business leaders, face-to-face at the return of our coveted one-on-one conference in Dubai in 2022 as we capitalize on normalizing market conditions.

“Overall, we are confident that as we continue to leverage our robust operational capacities and diverse lines of business, the Group is well positioned to close out 2021 on a strong note.”