Egypt's EFG-Hermes 2011 Profit Tumbles 63 Pct

Egypt's EFG-Hermes 2011 Profit Tumbles 63 Pct

Egyptian bank EFG-Hermes reported a 63 percent drop in 2011 net profit on Sunday as the economic fallout from uprisings across the Middle East pushed down brokerage, investment banking and asset management revenue.

April 8, 2012 3:59 by kippreport

Net income before minority interests was 307.7 million Egyptian pounds ($51 million), down from 826.2 million pounds in 2010, a statement from the bourse said.

Like other Egyptian financial firms, EFG was hit last year by the turmoil that followed a popular uprising that unseated the country’s president.

Consolidated operating revenue fell 31 percent as investment bank revenue tumbled 65 percent.

The unit’s fee and commission income fell 31 percent, EFG said in a statement. It closed four major transactions during the year with a combined value of over $27 billion.

Assets under management grew 2.2 percent from the third quarter after three quarters of declines.

The company said commercial bank Credit Libanais, which EFG bought in 2010, reported a profit that offset a net loss in investment banking, “underscoring the wisdom of management’s pursuit of a universal banking strategy”.

EFG shares were little changed after the results, in line with a flat benchmark Egyptian index.

(Reporting by Ehab Farouk and Tamim Elyan; Writing by Tom Pfeiffer; Editing by Mike Nesbit)