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EFG Hermes Reports 27.3% Year-on-Year Rise in Net Profit to EGP 98 mn in 1Q13, Looks to Distribute One Bonus Share for Every Five Shares Held by Its Shareholders
(Cairo, Egypt) —EFG Hermes*, the leading investment bank in the Arab world, released today its consolidated financial results for the first quarter of 2013, reporting net income after taxes and before minority interest of EGP 98 million on total consolidated operating revenues of EGP 494 million.
Group revenues rose 14% Y-o-Y in 1Q13, driven by 17% growth in Investment Bank revenues to EGP 194 million, reflecting rising contributions from all four fee-earning lines of business. The Commercial Bank’s contribution to Group revenue increased 12% Y-o-Y to EGP 300 million in the quarter.
Revenues for the quarter split as 61% contributed by the Commercial Bank and 39% by the Investment Bank.
At the Investment Bank, total revenues rose 17% Y-o-Y in 1Q13 to EGP 194 million, reflecting a strong improvement in fee and commission income generated by core businesses including Securities Brokerage, Investment Banking, Asset Management and Private Equity. Fee and commission revenues rose 26% Y-o-Y to EGP 158 million in the first quarter.
“Going forward, we have a clear strategy that will allow us to capture opportunities and create shareholder value with the full backing of our Board of Directors,” said Karim Awad, Co-CEO of the Investment Bank, noting, “Revenue generation remains a top focus for all divisions with an increasing focus on regional growth opportunities while continuing to preserve our market share in our home market of Egypt.”
At the same time, the Firm will continue a comprehensive cost-cutting plan, the first phase of which was implemented in 1Q13. EFG Hermes incurred c. EGP 26.7 million in one-off expenses during the quarter, a significant portion of which related to the cost restructuring plan.
“We expect the Firm to see more one-off expenses during the year as we continue implementing our plan to streamline operations and generate efficiencies,” Awad said, noting that “the Firm remains committed to its target of reducing its cost base to c. EGP 500 million in 2014 from an estimated EGP 780 million this year. This will ensure the Investment Bank’s ongoing ability to perform amid unpredictable market conditions.”
Finally, the Firm is seeking regulatory approval to issue one bonus share for every five shares held by our shareholders as of the dividend date to raise capital to EGP 2.87 billion.
EFG Hermes Securities Brokerage closed 1Q13 once more ranked number-one in Egypt as well as holding leading positions in other key regional markets. EFG Hermes Brokerage executions rose a sharp 35% to USD 5.4 billion in the first quarter, reflecting preservation of market share and improved market volumes across the region (with the exception of Egypt).