EFG Holding posts EGP3bn in Q3 2023 revenue

EFG Holding posted higher quarterly revenue and profit, driven by robust growth across the investment bank (EFG Hermes) and the commercial bank (aiBANK).

The banking group’s revenues in the three months to September 30 soared by 27 per cent year-on-year (YoY) to EGP3bn while its net profit after tax and minority interest rose by 24 per cent to reach EGP395m, proving resilience amid a challenging economic landscape.

Though operating expenses, including provisions and expected credit losses, jumped by 22 per cent YoY to EGP2bn in Q3 2023, EFG Holding’s net operating profit reached EGP1bn.

“Our strong financial results — driven by the strong performances of EFG Hermes and aiBANK — validate our strategic approach to revenue diversification and our dedication to delivering superior outcomes for our clients and shareholders,” said Karim Awad, group CEO of EFG Holding.

Awad said the robust performance showcases how EFG Holding is leveraging the diversity of its operating model to thrive in a challenging economic landscape.

EFG Hermes

EFG Hermes reported a 30 per cent YoY increase in Q3 revenues to EGP1.4bn, driven by strong brokerage revenues in Egypt and the UAE, higher incentive fees from asset management business, increased management fees in private equity and the positive impact of exchange rate movement.

Despite lower revenue contributions from holding and treasury activities, as well as investment banking, the investment bank division said its net operating profit surged 22 per cent during the period under review to EGP390m.

EFG Finance

EFG Finance said its revenues in the three months to September 30 came in flat YoY at EGP666m, with Valu’s robust growth contributing the lion’s share at EGP314m, up 105 per cent.

“While we saw broad-based strength across our multiple verticals this quarter, the outstanding contributions from our innovative fintech company Valu were a strategically important part of the EFG Finance story,” said Awad.

The group’s non-bank financial institutions (NBFI) platform reported a 20 per cent YoY decrease in net operating profit to EGP129m, due to a 7 per cent increase in operating expenses to EGP538m. EFG Holding attributed the increase to higher employee expenses and provisions.

EFG Finance’s net profit after tax and minority interest also plunged by 51 per cent YoY to EGP30m. The platform attributed the decrease in profit to the adoption of new lending guidelines in Tanmeyah, ongoing restructuring efforts across the platform, and a cautious approach to provisioning.

“Despite the current challenges, the company remains optimistic and expects to regain its historically strong growth rates by the end of Q1 2024, as these measures lay the groundwork for sustainable success in the future,” the banking group said in a statement.

aiBANK

Meanwhile, aiBANK reported EGP890m in Q3 2023 revenue, a 53 per cent growth on the back of improved net interest income, and higher fees and commissions from increased trade finance volumes.

The commercial bank’s net profit soared by 214 per cent YoY to EGP345m.

Awad said EFG Holding will continue to leverage the breadth and depth of its comprehensive financial service portfolio, advisory capabilities, and other capabilities as part of the banking group’s commitment to deliver exceptional value to our shareholders, clients, and employees.

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