EFG Holding Group – the leading financial institution that owns a comprehensive bank in Egypt and the leading investment bank in the Middle East and North Africa region – announced today the financial and operational results for the third quarter of 2024, as the group succeeded in continuing to grow revenues for the third quarter in a row during… This year, it reached 5.0 billion pounds, an annual growth rate of 68%, supported by the strong growth recorded by the group’s various operating sectors, which are the investment bank (EFG Hermes), the non-banking financing platform (EFG Finance), and the commercial bank (Next Bank). ).
The group’s operating expenses (including provisions and expected credit losses) increased at an annual rate of 63% to reach 3.2 billion pounds during the third quarter of 2024, against the backdrop of an increase in employee salaries and operational expenses, affected by the inflationary environment that reflects the impact of liberalizing the Egyptian pound exchange rate, which It in turn affected all operating expenses. Despite these challenges, the group’s employee expenses/revenues reached a lower level on a quarterly level at 39% during the third quarter of 2024, compared to 42% during the second quarter of 2024.
The significant growth in revenues exceeding expenses contributed to an increase in net operating profit and net profit after deducting taxes at an annual rate of 78% and 83%, respectively, during the third quarter of 2024.
Despite the challenges facing the economic arena, the group succeeded in achieving an outstanding performance that reflects its ability to overcome inflationary pressures and adapt to changing geopolitical conditions, which was reflected in the growth of net profit after deducting taxes and minority interests by an annual rate of 76%, reaching 697 million pounds.
In this context, Karim Awad, CEO of EFG Holding Group, stressed that the results of the third quarter of 2024 are a testimony to the flexibility of the group’s business model and strategy, which contributed to enhancing its ability to overcome the challenges witnessed by the local market, represented by the high rates of… Inflation and the liberalization of the Egyptian pound exchange rate, which resulted in an increase in employee salaries and operating expenses in the group’s three business sectors, especially the Investment Bank. Awad praised the group’s ability to achieve exceptional growth rates thanks to the strong business strategy it has adopted, which resulted in the expansion of its business scope in a group of promising markets such as the Saudi market. In addition, Awad expressed his pride in the group’s strong performance, which was reflected in the financial results achieved by EFG Hermes, EFG Finance, and Commercial Bank, which was recently rebranded as Next Bank.
Regarding the performance of the investment bank, EFG Hermes, revenues increased at an annual rate of 87% to reach 2.7 billion pounds, supported by the strong performance recorded by the various operational sectors, especially treasury activities, which recorded an exceptional growth in revenues at an annual rate of 180% in light of unrealized profits. For initial capital. The revenues of the securities brokerage, promotion, and underwriting (Sell-Side) sectors also increased at an annual rate of 62%, reaching 1.4 billion pounds, as the promotion and underwriting sector recorded an increase in revenues at an annual rate of 201%, which is a three-fold growth on the back of higher fees. Consulting, while the brokerage sector witnessed an increase in revenues at an annual rate of 50%, driven by the increase in commission fees in the Egyptian, Middle East and North Africa markets, and the growth of the structured products sector. In addition, the direct investment and asset management (Buy-Side) sectors achieved strong revenue growth at an annual rate of 71% to reach 437 million pounds, supported by the strong performance of the asset management sector, which recorded an increase in revenues denominated in US dollars at an annual rate of 81% in light of Higher management fees and incentives for subsidiary Frontier Investment Management (FIM) and the impact of exchange rate liberalization on revenue growth. At the same time, direct investment sector revenues denominated in US dollars increased by 36% annually as a result of exchange rate liberalization measures. Despite the increase in operating expenses by an annual rate of 84%, EFG Hermes succeeded in doubling its net operating profit, increasing by an annual rate of 95% to 760 million pounds. Taxes also increased by an annual rate of 168%, which is due to the high rate of profitability of Egyptian operations and deferred taxes on initial capital gains, in addition to the increase in net profit after deducting taxes and minority interests by an annual rate of 68%, recording 274 million pounds.
The non-banking financing platform, EFG Finance, also succeeded in achieving strong growth in revenues during the third quarter of 2024, reaching 1.1 billion pounds, an annual growth rate of 68%, thanks to the outstanding performance of all affiliated operating sectors. Tanmiah Company’s revenues increased by an annual rate of 95% in light of the increase in loans granted to customers and interest income, while Valeo Company recorded an annual growth of 36% supported by the increase in the volume of loans. In addition, the revenues of the financial leasing sector of EFG Financial Solutions doubled at an annual rate of 103% on the back of an increase in net interest income and the value of fees and commissions, as well as an increase in net profit after deducting taxes and minority interests at an annual rate of 349% to 203 million pounds.
On the other hand, Commercial Bank, which was rebranded as Next Bank during the third quarter of 2024, continued its growth path in light of revenues rising at an annual rate of 38% to record 1.2 billion pounds, driven by a rise in net interest income. Net profit after deducting taxes also increased at an annual rate of 20% to 428 million pounds, which reflects the strength of its financial position and operational operations.
In conclusion, Awad stressed his confidence in the ability of the group’s business sectors to continue achieving more successes, as the year approaches its end, as the group looks forward to achieving attractive returns from its investments in Commercial Bank while expanding the scope of non-banking financing platform services during the coming year. Awad added that the Investment Bank currently enjoys a leading position in the Middle East and North Africa region, expressing management’s confidence in the growth potential of the region’s markets, despite the geopolitical challenges.
To view the financial results report for the third quarter of 2024 and management’s commentary, please visit the company’s website.
