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EFG-Hermes profit surges 34 per cent

DUBAI - Investment bank EFG-Hermes reported a surge of 34.2 per cent in net profit for first-half 2008 on Thursday.

The company in a Press statement said that its revenues for the same period also recorded a rise of 56 per cent. The robust results were attributed to its strategy to expand and diversify its operations despite volatile market conditions resulting from a regional correction and global economic turmoil.

In the first half of the year to June 30, 2008, the firm reported total consolidated revenues of EGP 1.53 billion, up 56 per cent over the same period last year. Revenues in the second quarter of this year grew 64.7 per cent over second quarter 2007 to EGP 871.3 million and were predominantly booked through investment banking operations.

Meanwhile, net profit after tax and minority interest surged 34.2 per cent to EGP 757.7 million in firs-half 2008 compared to EGP 564.5 million in the same half last year, with a 61.7 per cent profit margin.

"EFG-Hermes posted its best half-year results ever despite volatility in major regional markets due to an ongoing correction and the global economic slowdown," says EFG-Hermes CEO Yasser El Mallawany. "The firm's performance in the second quarter is a testament to the group's strength and market leadership across the region, a fact underscored by our becoming the first investment bank in the region to simultaneously close two large IPOs."

Total revenues booked from the Investment Bank reflect 94.7 per cent growth over second quarter 2007 to EGP 741 million, excluding unrealised incentive fees for the quarter totaling EGP 97.4 million, with total revenue from the Investment Bank nearly doubling over first-half 2007 to EGP 1.26 billion, a level that is 68.1 per cent of the full-year 2007 level. "Across the region, we are reaping the fruits of our strategy of adding new markets, products and clients," notes EFG-Hermes CEO Hassan Heikal, adding, "We are particularly pleased with the breakdown of operating revenues in the first half, which reflect our strategy of focusing on the larger and more stable asset management business as a core driver going forward."

In the first half, asset management (including both listed and private equity) accounted for 32.7 per cent of total operating revenues. Brokerage accounted for 38.9 per cent and investment banking for 10.7 per cent, while the trading book accounted for 18 per cent.