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Profits Egyptian bank EFG-Hermes second quarterly net profit down 66 percent
Income boosted last year by exceptional dividend; Analyst says few surprises in overall results; Assets under management declined 6 pct
August 15, 2012 5:12 by Reuters
Egyptian investment bank EFG Hermes posted a net profit of 27 million Egyptian pounds ($4.4 million) for the second quarter, a two-thirds decline from a year earlier when it was lifted by a dividend from a real estate investment.
The bank, which is planning a tie-up with Qatar’s QInvest to give it more capital to expand, earned 80 million pounds in the second quarter of 2011 when results included exceptional dividend income of 28 million pounds from SODIC.
However, revenue from its brokerage operations fell this year due to the lower trading volumes on markets in the region, while the treasury and capital markets business benefited from a rise in yields on the state treasury bills it holds.
“Rates on treasury bills have gone up more than 4 percent and they have a huge investment in treasuries,” said Mohamed Seddiek, head of research at Prime brokerage.
EFG Hermes shares were up 2.5 percent in relatively heavy volume on the Egyptian Exchange by 1144 GMT. The wider index of which it is part was up 0.2 percent.
Overall second-quarter investment banking revenue declined 13 percent on a year ago to 195 million pounds but group operating revenue was up 2 percent at 477 million pounds, with its Credit Libanais retail bank achieving 3 percent growth in net profits.
Seddiek said the results seemed to be in line with expectations overall, except for a decline in assets under management of 6 percent from the first quarter of 2012.
“They keep on losing funds and don’t seem to have reached the ground yet, although markets flattened over the last period,” he said.
(Reporting by Edmund Blair and Tom Pfeiffer; Editing by Greg Mahlich)