By Nkiruka Nnorom
EFG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), has reported a 30 percent in revenue to EGP1.3 billion on the back of positive performance across the majority of the Group’s lines of business in the first quarter (Q1) ended March 31, 2021.
“While the challenges posed by the ongoing pandemic still abound, EFG Hermes continued to reap the benefits of the diversified business model it has built in recent years,” said EFG Hermes Holding Group CEO, Karim Awad.
“This has helped us adapt swiftly to this evolving situation and supported us in delivering robust results across our business lines by end of the first quarter and maintaining our position as the leading financial services player in frontier emerging markets.”
Leading growth for the quarter, the Group’s NBFI platform recorded a revenue increase of 22 percent Year-on-Year (Y-o-Y) to EGP 441 million and contributed 35 percent of EFG Hermes’ top line in Q1’21 driven by improved performance across its lines of business.
Tanmeyah’s revenues grew nine percent Y-o-Y to EGP 321 million on the back of it delivering a strong sales performance for the period, while the Group’s consumer finance business, valU, nearly tripled revenues Y-o-Y to EGP 56 million on the back of a strong portfolio expansion.
The Group’s Leasing and Factoring platform, EFG Hermes Corp-Solutions, recorded revenue increases of 30 percent and 110 percent Y-o-Y to EGP 56 million and EGP 8 million, respectively, driven by higher arrangement fees and interest income in Q1’21.
EFG Hermes’ sell-side revenues climbed 29 percent Y-o-Y to EGP 296 million on the back of improved performances at its investment banking and brokerage operations in 1Q21 spurred by improved market conditions.
The Group’s investment banking division more than doubled its revenue performance for the period, recording EGP 42 million on the back of increased advisory fees from the successful close of eight transactions in 1Q21 alone. Meanwhile, brokerage revenues increased 20 percent Y-o-Y to EGP 255 million, driven by strong results generated from its operations in Egypt for the period.
Meanwhile, at the Group’s buy-side operations, revenues grew 22 percent Y-o-Y to EGP 129 million, on the back of improved performance from EFG Hermes Asset Management, where revenues surged 62 percent Y-o-Y to EGP 99 million due to higher management and incentive fees booked by FIM in 1Q21. At the Group’s Private Equity division, revenues declined 34 percent Y-o-Y to EGP 29 million in Q1’21, as the comparable period last year had booked incentive fees in relation to the division’s Vezeeta exit.
At EFG Hermes’ Capital Markets and Treasury operations, revenues increased 45 percent Y-o-Y to EGP 389 million on the back of unrealized gains booked on investments and lower FX losses in Q1’21 compared to the same period last year.
“At our NBFI platform, Tanmeyah delivered record sales of EGP 490 million, the highest since its inception and a testament to the Group’s prowess in the microfinancing space.
“Moreover, we maintained valU’s growth trajectory as we continued to expand our partnerships with vendors across the nation and capitalize on Egypt’s ever-growing consumer base.
“In parallel, our investment banking division closed eight transactions across the ECM and DCM spaces, supporting our sell-side performance for the period and further cementing our position as the leading investment bank across the markets we operate in,” added Awad.