CAIRO: Egyptian investment bank EFG-Hermes said its second-quarter profit fell 57 percent on the previous year but improved investor sentiment in its regional markets helped it improve on the first quarter. EFG-Hermes on Thursday posted a net profit of LE 176 million ($32 million), down from LE 409 million in the second quarter of 2008 but up from LE 140 million in the first quarter of 2009. Operating revenue, which is income from its core business operations, was LE 224 million, down 70 percent from the second quarter of 2008, but up 51 percent on the preceding quarter. After two consecutive quarters of decline, operating revenues witnessed a slight rebound as improved investor sentiment increased activity across all regional markets, EFG-Hermes said. Net revenue was LE 382 million in the quarter, down from LE 807 million in the comparable period, with a sharp decline in fee and commission revenue to LE 220 million versus LE 570 million in the second quarter of 2008. EFG-Hermes, which operates across the Middle East, said challenging regional market conditions meant few equity raising activities were launched. Its pipeline of initial public offerings (IPO) was likely to remain on hold for the remainder of 2009 unless there was a major shift in sentiment, the firm said. Assets under management increased 8.4 percent to $3.98 billion over the previous quarter, after three quarters of falls from a record $7.72 billion in the second quarter of 2008. Regional asset management slipped to contribute 11 percent to operating revenues in the quarter, down from 41.5 percent a year ago. The bank s brokerage operations provided two-thirds of the firm s operating revenues in the quarter, up from 40.9 percent a year ago and 56.3 percent last quarter. EFG-Hermes also said it has closed two transactions at the start of the third quarter - Actis purchase of a 9.3 percent stake in Commercial International Bank for $243 million and a debt transaction for $1.1 billion for an oil company. EFG-Hermes shares ended up 2 percent in Thursday s trading at LE 26.04.
