EFG Holding, a premier financial institution with a universal bank in Egypt and a leading position in the investment banking sector across the Middle East and North Africa (MENA), disclosed its annual results for the year concluded in 2023. The Group reported unprecedented revenues of EGP 14.7bn, marking a 34% increase year-on-year, propelled by the robust performance of its Investment Bank (EFG Hermes) across both sell-side and buy-side operations, Valu, and its commercial banking division, aiBANK.
Operating expenses for EFG Holding escalated by 35% year-on-year, attributed to heightened employee costs and general & administrative expenses, particularly within EFG Hermes, followed by aiBANK. This also included increased provisions and Expected Credit Losses (ECL) within EFG Finance’s business lines and aiBANK. Profitability-wise, the Group’s net operating profit surged by 32% year-on-year to EGP 4.9bn. Concurrently, net profit soared by 47% year-on-year to EGP 3.2bn in FY23, primarily fueled by the Brokerage, Asset Management, Valu, and the profitability expansion of aiBANK. The Group’s net profit after tax and minority interest climbed by 39% year-on-year to EGP 2.5bn, while total assets reached EGP 121.9bn as of December 2023.
Karim Awad, Group CEO of EFG Holding, commented on the year’s achievements: “EFG Holding’s stellar performance in 2023 is a reflection of our team’s relentless commitment to navigating complex economic landscapes, our pursuit of excellence, and our strategic vision. Our record revenues and remarkable profitability continue to define our leadership in the MENA financial sector, adding value and driving growth across our comprehensive service offerings. The exceptional financial outcomes, primarily driven by EFG Hermes and aiBANK, highlight the efficacy of our strategic approach that transformed our business model, and our ongoing dedication to serving our clients, shareholders, and communities with excellence. Our focus on innovation and sustainable development is unwavering.”
The Investment Bank’s net profit after tax and minority interest rose by 20% to EGP 1.6bn, up from EGP 1.3bn in FY22.
EFG Finance, the Group’s Non-Bank Financial Institutions (NBFI) platform, witnessed a 17% year-on-year increase in revenues, reaching EGP 3bn in FY23. This growth was largely driven by Valu, which significantly boosted the NBFI’s top and bottom lines, with revenues escalating by 78% year-on-year to EGP 1.2bn in FY23. Operating expenses also increased by 17% year-on-year to EGP 2.3bn, mainly due to elevated Provisions & ECL.
Subsequently, EFG Corp-Solutions reported an uptick in revenues, with the Leasing segment achieving a 23% year-on-year increase to EGP 363m, and the Factoring segment growing by 45% year-on-year to EGP 120m. Conversely, Tanmeyah’s revenues saw a 14% year-on-year decrease to EGP 1.3bn. Meanwhile, Fatura’s revenues climbed by 45% year-on-year, following the completion of its acquisition in June 2022. Additionally, net profit after tax and minority interest surged by 51% year-on-year to EGP 349 million, with Valu contributing significantly to the profit growth.
aiBANK had a remarkable year, with revenues leaping by 61% year-on-year to EGP 3.6bn in FY23, underpinned by an increase in net interest income due to loan book expansion. Fees and commissions also experienced a more than threefold increase, predominantly from enhanced trade finance activities. The Bank’s net profit after tax more than doubled, jumping by 117% year-on-year to EGP 1.1bn, reflecting aiBANK’s dynamic operational growth.
“With Egypt’s market taking a pivotal turn following the recent floatation, EFG Holding looks ahead with optimism towards our future endeavors. Our robust balance sheet has been strategically hedged to withstand the fluctuations in the EGP, while our expanding regional operations consistently yield considerable USD revenues annually. These factors, combined with the promising growth trajectories of Valu, aiBANK, and Tanmeyah, instill in us a growing sense of confidence in the resilience and efficacy of the business model we have diligently built. We are increasingly assured of our ability to not only weather challenges but also to drive sustained profitability and create value for shareholders, clients, and communities” concluded Awad.
