Egypt's EFG-Hermes shows highest quarter profits in 4 years

Ahram Online, Thursday 14 Aug 2014

Considerable rise in profits for country's biggest investment bank is largely due to investments from Gulf Cooperation Countries


Egypt's leading investment bank, Egyptian Financial Group – Hermes (EFG-Hermes), reported on Thursday its highest quarterly profits in four years, citing growth in investments in Gulf Cooperation Countries (GCC).

The group achieved LE188 million ($26.33 million) in profits in the three months ending on 30 June, a considerable rise from the LE80 million ($11.2 million) in losses in the same period a year earlier.

Revenues increased 48 percent to LE747 million ($104.62) from LE506 million ($70.87 million).

The group's core service, investment banking, was the main driver for profitability growth, registering net profits of LE147 million ($20.59 million) in the second quarter of 2014 after registering LE144 million ($20.17 million) in losses the prior year.

During the same period, revenues generated from investment banking climbed 146 percent to LE442 million ($61.9 million) due to higher commission income and sale of part of its stake in Six of October Development and Investment Company (SODIC) for LE97 million ($13.59 million).

For the first half of financial year 2014, the group saw its revenues increase 31 percent to LE1.31 billion ($183.5 million) from LE1 billion ($140.1 million). Hermes investment bank registered an 84 percent rise in revenues while commercial bank (Credit Libanais) revenues declined 1 percent.

Regional operations contributed 45 percent to the investment bank's revenues in the first half of 2014.

Brokerage revenues from investments in the United Arab Emirates achieved a whopping 310 percent increase in the first half of 2014 year-on-year to register LE77 million ($10.78 million). Saudi Arabia followed with a 90 percent rise in revenues to LE10 million ($1.4 million), while Kuwait dropped 41 percent to LE18 million ($2.52 million).

The investment bank has the largest share of the Egyptian market, followed by Kuwait, Oman and the United Arab Emirates.

EFG-Hermes' share price stood at LE18.32 ($2.57) per share in the Egyptian stock exchange on 14 August.

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