EFG Hermes Chief Executive Officer Yasser El Mallawany.
Key Highlights of 1Q2012 Include:
Securities Brokerage maintains its regional leadership, closing the quarter ranked number one in Egypt and maintains a leading position in a number of regional markets
Investment Banking closes landmark de-merger in Egypt and builds its transaction pipeline
Total assets under management stand at USD 4.3 billion at the end of the quarter
Commercial Bank continue to demonstrate sustained organic growth and profitability, and resulting in a pre-tax RoAE of 17.2%
Group revenues rose 6 percent year-on-year to EGP 433 million, supported by a 10 percent rise in the Commercial Bank revenue, which offset a 1 percent decline in revenue from the Investment Bank, underscoring the importance of the Group's universal banking strategy in challenging regional conditions.
Revenues for the quarter split as 62 percent contributed by the Commercial Bank and 38 percent by the Investment Bank.
The Investment Bank fees and commissions declined 24 percent to EGP 125 million amid market conditions regionally and internationally that prompted fewer Investment Banking transactions and lower Brokerage revenues as institutional investors opted to remain on the sidelines. Notably, revenues from capital markets and treasury operations rose 782 percent year-on-year to EGP 41 million.
"The quarter just ended was marked by both regional and global turbulence similar to that which we witnessed in 2011," noted EFG Hermes Chief Executive Officer Hassan Heikal. "Against that backdrop, we have maintained a sharp focus on cost control that has allowed us to preserve profitability and our market leadership while forging a new strategic partnership with QInvest that will allow us to leverage our market presence and human capital across new markets in concert with QInvest's financial strength and client base."
EFG Hermes Securities Brokerage once more closed the year as the largest broker in the Arab world, with executions higher than the regional uptick in trading volumes the previous quarter. In Egypt, the Division remains the clear number-one broker with executions 76 percent higher than its nearest competitor. Across the board, individual investors accounted for 71 percent of total trading activity as institutional investors remained largely on the sidelines. Also in the quarter, Brokerage received a license from the Emirates Securities and Commodities Authority to offer margin trading in the UAE to its regional clients, a development that will enhance its leadership position in those key markets.
The Investment Banking Division experienced an expectedly quiet quarter in which it advised on the de-merger of Orascom Telecom SAE, a first-of-its-kind transaction in Egypt.
The Asset Management Division saw AUM relatively steady, with a 1 percent increase q-o-q to USD 3.3 billion in 1Q2012. A net outflow of 6 percent from fixed income and equity funds was led by redemptions on local money market funds (accounting for 72 percent of outflows in the quarter) and was offset by improved market performance.
Private Equity AUMs stood at USD 976 million as the Division began focusing on fundraising for InfraMed in the GCC while simultaneously screening for investments in Egypt, Turkey, Morocco and Jordan in the energy and healthcare sectors.
EFG Hermes Research closed 1Q2012 with coverage of 134 companies representing 57 percent of the aggregate regional market capitalisation and was named Best Research House in the Middle East at The Banker Middle East Product Awards.
At the Commercial Bank, Crédit Libanais reported net profit of USD 18.3 million, the highest earnings recorded in the past 12 months, representing a rise of 7 percent year-on-year and nearly 34 percent quarter-on-quarter.
Crédit Libanais reported 3.7 percent quarter-on-quarter growth in total loans to USD 2.05 billion, while total deposits grew 2.1 percent q-o-q to USD 6.42 billion.
"We are particularly pleased with the performance of the Commercial Banking Platform both year-on-year and quarter-on-quarter, a development that underscores the long-term importance of our universal banking strategy as it helps offset capital market volatility," noted EFG Hermes Chief Executive Officer Yasser El Mallawany. "Loans, deposits and total assets all grew within budget and we look forward to growth in net interest income in the coming months, market conditions permitting."
Revenues in 1Q12 split as 62 percent from the Commercial Bank, 29 percent fee and commission income from the Investment Bank, and 10 percent revenue from capital markets and treasury operations.
Highlights of EFG Hermes' performance in 1Q2012 follow. Full financials and Management's detailed analysis of the factors underpinning the Firm's performance in the quarter just ended are now available for download on www.efghermes.com.
1Q12 Performance Highlights
Investment Banking Platform
About EFG HermesEstablished in 1984, EFG Hermes is the leading investment bank in the Arab world. The Firm specializes in Securities Brokerage, Investment Banking, Asset Management, Private Equity and Research. EFG Hermes is listed on both the Egyptian and London stock exchanges. The recent acquisition of a 65% stake in Credit Libanais marks the first step towards EFG Hermes's transformation into a universal bank and will enable it to rapidly expand into retail and commercial banking.
Through its operations in Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria and the UAE, with over 1,000 employees of 25 nationalities, EFG Hermes serves a considerable and diversified client base from the Middle East and North Africa to Europe, Africa and the United States. Our clients include governments, corporations, financial institutions, high net worth clients and individual customers.
For further information about EFG Hermes, please visit www.efghermes.com.
For further information, please contact:EFG Hermes MediaEFG Hermes Holding SAEmedia@efg-hermes.com@EFGHermesyoutube.com/EFGHermesHolding
Note on Forward-Looking StatementsIn this press release, EFG Hermes may make forward looking statements, including, for example, statements about management's expectations, strategic objectives, growth opportunities and business prospects. These forward-looking statements are not historical facts but instead represent only EFG Hermes' belief regarding future events, many of which, by their nature are inherently uncertain and are beyond management's control and include among others, financial market volatility; actions and initiatives taken by current and potential competitors; general economic conditions and the effect of current, pending and future legislation, regulations and regulatory actions. Accordingly, the readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made.
© Press Release 2012
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