(Cairo, Egypt) — EFG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), reported solid results today for third quarter of 2019. The Group recorded a net profit after tax and minority interest of EGP 358 million in 3Q19, up 34% Y-o-Y, on revenues of EGP 1.2 billion, reflecting a 25% Y-o-Y increase. The strong growth in revenue was driven by strong sell-side revenues, robust performance by the NBFI platform and capital market and treasury revenues.

“As we enter the last quarter of 2019, we are happy to report that the Group continues to post solid top and bottom line results as the Firm developed capabilities, products and services that will continue to support its revenue generation” said EFG Hermes Holding’s Group CEO Karim Awad. “The strength of both our Investment Bank and NBFI platforms is proof positive that we have made significant headway into becoming a full-fledged financial services corporation, cementing our leadership position across the spectrum.”

Fees and commissions, which represented 74% of the Group’s revenues this quarter, grew 13% Y-o-Y to EGP 872 million on the back of increased Brokerage and Tanmeyah revenues.

EFG Hermes’ sell-side businesses recorded an 11% Y-o-Y growth in revenues to EGP 490 million in the third quarter of the year on higher brokerage revenues generated from Egypt, KSA and structured products – despite Investment Banking revenues posting a Y-o-Y decline due to a strong comparable quarter in 2018.

“The Brokerage division’s dominance in MENA markets and newly entered frontier markets continues to generate strong revenues for the Group,” said Awad. “The division ended the first nine months of the current year as the leading brokerage house in Egypt, Abu Dhabi, Dubai, Nasdaq Dubai and Kuwait. I am particularly proud of the rapid growth rate in terms of market share in Sub-Saharan African markets, where we ranked second and third in Kenya and Nigeria respectively.”

Buy-side revenues declined 29% Y-o-Y to EGP 84 million in 3Q19 due to lower regional management fees. Private Equity revenues came flat Y-o-Y in 3Q19.

NBFI revenues continued to climb, reporting a 41% Y-o-Y increase to EGP 299 million in 3Q19 – particularly driven by Tanmeyah’s impressive 52% Y-o-Y revenue growth to EGP 252 million in the third quarter of the year.

“We proactively built a strong and growing NBFI platform over the past few years as we continue to actively explore new venues for further expansion to lead the market with new products,’ said Awad. “Bedaya, our mortgage finance company and newest addition to the NBFI family, is expected to start operations before year end,” he added.

Capital markets and treasury operations’ revenues reported a 79% Y-o-Y increase to EGP 302 million, with revenue growth supported by net interest earned, realized capital gains and trading portfolio gains. Capital markets and treasury operations contributed 26% of total Group revenues in 3Q19.

Group operating expenses increased 20% Y-o-Y to EGP 721 million in the third quarter of the year, with the increase attributed to operational expenses related to Tanmeyah’s Y-o-Y operational expansion and variable expenses that rise in line with revenue increases. The Investment Bank’s other operating expenses were broadly flat Y-o-Y.

Group revenue growth surpassed the increase in expenses during the third quarter. Accordingly, EFG Hermes’ net operating profit recorded EGP 453 million in 3Q19, a 34% Y-o-Y increase.

With the continued growth in revenue across both the Investment Bank and NBFI platform outpacing the rise in expenses, EFG Hermes’ net profit after tax and minority interest recorded EGP 358 million for 3Q19.

“Our ambition is to solidify and further elevate our leadership in newly entered Frontier Emerging Markets by growing our market shares and continuing to provide our world-class advisory services to key frontier companies seeking ECM, DCM and M&A transactions,” added Awad.

“We have made significant progress in our strategy of product diversification and geographic expansion. As the Group continues to rely on its most important assets, its human capital, I am confident that we will continue to lead our traditional and new markets,” concluded Awad.