Egypt: EFG Holding’s revenues surge 63% in Q2 2024

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EFG Holding, a financial institution with a universal bank in Egypt and the leading investment bank in the Middle East and North Africa (MENA), has announced strong second-quarter 2024 results, with revenue surging 63% year-on-year to EGP 5.1bn.

This growth was largely attributed to record-high revenues from the Investment Banking division of EFG Hermes, the group’s investment banking arm, alongside strong contributions from the rest of the group’s core business lines.

The group’s net profit after tax and minority interest climbed 95% year-on-year to reach EGP 791m in the second quarter, and more than doubled in the first half of 2024 to EGP 2.6bn.

EFG Holding’s three core business verticals – EFG Hermes, EFG Finance, and aiBANK – all reported strong year-on-year growth in the second quarter.

EFG Hermes, the investment banking arm, saw its Investment Banking division report record-high revenues alongside a significant increase in brokerage revenues. This resulted in a 74% year-on-year increase in EFG Hermes’ total revenue to EGP 2.8bn for the quarter. Sell-side revenues, which encompass brokerage and investment banking, rose by a factor of 3.5 to EGP 2.9bn.

Meanwhile, buy-side revenues climbed 46% year-on-year to EGP 384m. Holding and Treasury activities recorded a loss of EGP 503m in the second quarter, a swing of more than EGP 1bn compared to the same period last year when revenues were EGP 530m. Despite this, EFG Hermes’ net profit after tax and minority interest rose 72% year-on-year to EGP 305m.

EFG Finance, the non-bank financial institutions platform, also reported a strong quarter with revenue climbing 70% year-on-year to EGP 1.1bn. All of the platform’s business lines, particularly Valu, followed by Tanmeyah and EFG Corp-Solution’s Leasing business, posted year-on-year growth.

Operating expenses increased 41% year-on-year to EGP 671m due to higher employee expenses, operating expenses, provisions, and ECL. Despite this, EFG Finance’s net operating profit rose 167% year-on-year to EGP 383m in the second quarter. Net profit after tax and minority interest jumped 210% year-on-year to EGP 267m due to higher profitability from EFG Corp-Solution’s Leasing business, Valu, and Tanmeyah.

aiBANK, the commercial bank, saw its revenue soar 39% year-on-year to EGP 1.2bn, driven mainly by higher net interest income on the back of loan book growth and enhanced net interest margins. aiBANK’s operating expenses, including provisions and ECL, rose 16% year-on-year to EGP 566m due to higher employee expenses and other operating expenses, a consequence of persistently high inflation and the bank’s operational expansion. The bank’s net profit after tax climbed 55% year-on-year to EGP 426m (of which the group’s share is EGP 219m) as revenue growth outpaced the growth in expenses.

Karim Awad, Group CEO of EFG Holding, commented: “Our second-quarter results demonstrate EFG Holding’s ability to navigate a challenging economic environment. In an era of unprecedented economic and geopolitical turbulence, marked by widespread inflation, currency devaluation, and volatile global markets, we not only navigated these challenges but also emerged stronger. This strong performance is evident from the financial results across EFG Hermes, EFG Finance, and aiBANK, particularly EFG Hermes’ Investment Banking division, which shattered previous revenue records, complemented by the solid contributions from our other core businesses.”

“The significant increase in net profits at EFG Finance reflects our teams’ dedication and effective collaboration within all its business lines, including Valu, Tanmeyah, and EFG Corp-Solutions’ Leasing operations. These strong outcomes highlight our ongoing efforts to innovate and set new benchmarks in the industry. Looking ahead, our focus is on driving steady and sustainable long-term growth, cementing our market position, and improving operational efficiency for the benefit of driving unparalleled value for our stakeholders,” Awad concluded.