Q3 profit drops 64 per cent at Egyptian bank EFG-Hermes

Reuters, Wednesday 16 Nov 2011

Uprising takes its toll on major investment bank as major income over the last three months slips to LE32 million


Egyptian bank EFG-Hermes reported a 64 per cent drop in third-quarter net profit on Wednesday after the political turmoil in the region hit markets and scared off investors.

Net income was LE32 million Egyptian (US$5.35 million), down from LE88 million in the same quarter a year earlier, the bank said in a statement.

Investment banking revenue slipped 38 per cent to LE150 million and commercial banking revenue dipped 4 per cent. Group operating expenses fell 12 per cent.

Civil uprisings in Egypt, Syria, Tunisia, Libya and Yemen have hit the region's investment banks as markets tumbled and the appetite for fresh capital dwindled.

Foreign investors have fled Egypt, where President Hosni Mubarak was overthrown in February, and tourism has slumped.

EFG's capital markets and treasury revenue tumbled 79 per cent, partly because of unrealised losses on stocks. The year-earlier figure was boosted by the proceeds from the sale of Bank Audi.

Trading volume on markets in the region slid 39 per cent on average, EFG said, sending its brokerage income down 26 per cent.

"The regional market witnessed a very poor third quarter, given the seasonally quiet summer and the holy month of Ramadan and Eid holidays falling this year in the third quarter," it said.

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