Egypt’s investment bank, EFG Hermes reported on Wednesday a 77 percent year-on-year growth in revenues to 11 billion Egyptian pounds ($353.8 million) for 2022.
The group’s double-digit growth across its top and bottom line in 2022 “on the back of robust results generated from its core operational platforms, including the Investment Bank, Non-Bank Financial Institutions (NBFI) platform, and the consolidation of aiBANK revenues in FY22.” EFG statement read.
Net operating profit increased 63 percent year-on-year to 3.7 billion pounds, despite an 85 percent year-on-year growth in the group’s operating expenses to 7.3 billion pounds due to “rising inflationary pressures, USD denominated expenses in regional offices, and growth of business operations.”
Net profit before tax grew by 63 percent to 3.3 billion pounds, while net profit after tax and minority interest recorded an increase of 18 percent year-on-year to 1.8 billion pounds in 2022, subdued by taxes and deferred taxes.
“In spite of the high inflationary pressures, challenging interest rate environment, and soaring commodity prices witnessed in 2022 that dampened global capital market activity, we managed to deliver another set of stellar results across each of our three verticals and have further cemented our position as the region’s largest and most innovative impact-driven financial services institution.” Karim Awad, EFG CEO, said.
“The investment bank leveraged a favourable investment landscape in the GCC to strengthen its presence and advise on some of the most high-profile transactions in the region, bringing total ECM, DCM, and M&A deals across our markets to an outstanding 32 for the year valued at USD 14.3 billion.”
“Our NBFI platform performed equally well, buoyed largely by a two-fold increase in valU’s topline, as we continued to elevate the financial services ecosystem by providing a holistic suite of convenient and seamless financial solutions. On the commercial banking side of the house, the consolidation of aiBANK propped up the Group’s performance even further, as the bank continues to consistently grow revenues and as we capitalize on the synergies inherent in our business model.”
The Investment Bank booked solid results and supported the group’s performance in 2022, recording a revenue increase of 58 percent year-on-year to 6.2 billion pounds. The Investment Bank’s performance was driven by a 38 percent year-on-year rise in Sell-Side revenues to 2.5 billion pounds and a 14 percent year-on-year increase in Buy-Side revenues to 723 million pounds in 2022.
“… the Investment Bank’s performance was further supported by a 105% Y-o-Y increase in revenue from Holding & Treasury activities during the period. Moreover, the Investment Bank’s net profit after tax and minority interest inched down by 4% Y-o-Y to EGP 1.1 billion, primarily due to higher deferred tax booked at the holding level in FY22.” the statement added.
EFG Hermes Holding’s Group CEO Karim Awad
At the group’s NBFI platform, revenues grew by 28 percent year-on-year to 2.5 billion pounds on the back of solid performances across its lines of business in 2022. The group’s lifestyle enabling fintech platform, valU, contributed to the majority of the NBFI platform’s revenue growth for the period and booked a 115 percent year-on-year growth in revenues to 650 million pounds in 2022, with the majority of its key performance indicators doubling year-on-year despite the challenging market conditions.
The NBFI platform’s performance was further buoyed by a 37 percent and 43 percent year-on-year revenue increase in EFG Hermes Corp-Solutions’ leasing and factoring businesses, respectively, in 2022, as well as a 5 percent year-on-year increase in revenues at Tanmeyah during the period. At its bottom-line, the NBFI platform recorded a 30 percent year-on-year increase in net profit after tax and minority interest to 447 million pounds.
As for aiBANK, revenues increased by 14 percent on quarterly basis during the fourth quarter of 2022 to 660 million pounds. This was driven primarily by a 87 percent on quarterly basis increase in net fees and commissions to 118 million pounds during the period on the back of growth in trade finance transactions and an accelerated increase in the booking of retail loans.
“Additionally, aiBANK’s performance was further supported by a 3% Q-o-Q increase in net interest income during the period to EGP 509 million in 4Q22. In full year terms, aiBANK booked revenues of EGP 2.2 billion and a net profit after tax of EGP 515 million in FY22.”
“We continue to reap the fruits of our acquisition of aiBANK — a transaction that fueled our growth into a universal bank in Egypt whilst being a provider of a full scope of end-to-end financial services.” Awad concluded.
