EFG Holding, a leading financial institution with a universal bank in Egypt and the premier investment bank in the MENA region, has reported robust financial results for the third quarter of 2024. Group revenues climbed 68% year-on-year (Y-o-Y) to EGP 5 billion, supported by strong performances across its Investment Bank (EFG Hermes), Non-Bank Financial Institutions (NBFI) (EFG Finance), and Commercial Bank (Bank NXT) verticals. Net profit after tax and minority interest surged 76% Y-o-Y, reaching EGP 697 million.
Key Financial Highlights
EFG Holding achieved remarkable growth in revenues and profitability during 3Q 2024, driven by solid execution across its business lines.
The Investment Bank (EFG Hermes) reported revenues of EGP 2.7 billion, an 87% Y-o-Y increase.
The NBFI platform (EFG Finance) recorded revenues of EGP 1.1 billion, up 68% Y-o-Y.
The Commercial Bank (Bank NXT) saw revenues grow 38% Y-o-Y to EGP 1.2 billion.
Performance of Core Business Verticals
Investment Bank (EFG Hermes)
EFG Hermes delivered robust growth, with revenues up 87% Y-o-Y to EGP 2.7 billion. Treasury and holding activities recorded a 180% Y-o-Y surge, driven by unrealized gains on seed capital. The sell-side business achieved a 62% Y-o-Y increase in revenues to EGP 1.4 billion, propelled by exceptional performances in brokerage and investment banking.
Investment Banking revenues tripled, soaring 201% Y-o-Y on higher advisory fees. Brokerage revenues rose 50% Y-o-Y, supported by increased commissions from Egypt and MENA markets and growth in structured products. Buy-side revenues grew 71% Y-o-Y to EGP 437 million, led by an 81% Y-o-Y increase in asset management revenues, driven by higher management fees, incentive fees, and the impact of EGP devaluation on USD-denominated revenues. Private equity revenues rose 36% Y-o-Y, reflecting the devaluation’s impact on USD revenues.
Despite an 84% Y-o-Y increase in operating expenses, EFG Hermes nearly doubled its net operating profit to EGP 760 million, up 95% Y-o-Y.
NBFI Platform (EFG Finance)
The NBFI platform reported revenues of EGP 1.1 billion, growing 68% Y-o-Y.
Tanmeyah’s revenues surged 95% Y-o-Y due to higher loan issuances and interest income.
Valu reported a 36% Y-o-Y growth, supported by increased loan volumes.
EFG Corp-Solutions’ leasing revenues more than doubled, rising 103% Y-o-Y on higher net interest income and fees.
The platform’s net profit after tax and minority interest rose 349% Y-o-Y to EGP 203 million.
Commercial Bank (Bank NXT)
Rebranded in 3Q 2024, Bank NXT recorded a 38% Y-o-Y increase in revenues, reaching EGP 1.2 billion. Growth was driven by higher net interest income. Net profit after tax rose 20% Y-o-Y to EGP 428 million, highlighting the bank’s robust financial standing.
Navigating Economic Challenges
Operating expenses rose 63% Y-o-Y to EGP 3.2 billion due to inflationary pressures, EGP devaluation, and operational expansion. Despite this, EFG Holding maintained operational efficiency, reducing employee expenses/revenues to 39% in 3Q24 from 42% in 2Q24.
The group’s resilience and strategic agility enabled it to achieve 78% Y-o-Y growth in net operating profit and an 83% Y-o-Y increase in pre-tax profit.
CEO Commentary
Karim Awad, Group CEO of EFG Holding, stated, “Our third-quarter results reflect the resilience and adaptability of EFG Holding in overcoming economic challenges. This performance showcases our ability to execute a robust strategy that drives growth in promising markets like Saudi Arabia. We are proud of the outstanding contributions from EFG Hermes, EFG Finance, and Bank NXT.”
Outlook for Growth
Awad expressed optimism for sustained growth across the group’s platforms. He highlighted plans to enhance returns from investments in the commercial bank and expand the NBFI platform’s reach. He emphasized EFG Holding’s leading position in MENA’s financial sector and confidence in the region’s growth potential despite geopolitical challenges.
About EFG Holding
EFG Holding (EGX: HRHO.CA – LSE: EFGD) is a leading financial institution with a remarkable 40-year legacy of excellence, spanning eight countries across two continents. It operates through three core verticals, offering a comprehensive suite of financial products and services to meet the needs of individual and corporate clients.
Core Business Verticals
1. Investment Bank (EFG Hermes)
EFG Hermes is the premier investment bank in the Middle East and North Africa (MENA) region, providing an extensive range of services, including:
- Advisory: Specialized guidance for mergers, acquisitions, and strategic transactions.
- Asset Management: Managing assets across multiple classes and geographies.
- Securities Brokerage: Facilitating trading in major regional and global markets.
- Private Equity: Offering tailored investment opportunities.
- Research: Delivering in-depth market and equity analysis.
2. Non-Bank Financial Institutions (NBFI) Platform (EFG Finance)
EFG Finance is the fastest-growing NBFI platform in Egypt, offering innovative financial solutions, including:
- Tanmeyah: Focused on microfinance and empowering small businesses.
- Valu: A leader in fintech solutions for consumer financing.
- EFG Corp-Solutions: Providing leasing and factoring services.
- PayTabs Egypt: A cutting-edge digital payment platform.
- Bedaya: Offering mortgage financing solutions.
- Kaf: Specializing in insurance services.
- Fatura: A tech-driven B2B marketplace enhancing trade and logistics.
3. Commercial Bank (Bank NXT)
Bank NXT, formerly known under a different brand, delivers a wide range of banking services, including retail, corporate, and Islamic banking products. It caters to the diverse needs of individual and business clients in Egypt with a focus on innovation and customer-centric solutions.
Regional Presence
EFG Holding has established a strong presence in key markets, including Egypt, the UAE, Saudi Arabia, Kuwait, Bahrain, Pakistan, Kenya, and Nigeria. This extensive footprint enables the group to serve a broad client base and leverage regional growth opportunities.
Vision and Mission
EFG Holding aims to be the leading provider of innovative financial solutions in the MENA region and beyond. By delivering unparalleled services and fostering sustainable growth, the group supports the financial aspirations of its clients and contributes to the economic development of the communities it serves.
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