EFG-Hermes, Egypt's biggest investment bank, said on Sunday its net profit for the second quarter of 2011 fell 19 percent year on year as operating costs outstripped revenue growth.
Net profit fell to 79 million Egyptian pounds ($13.2 million) from 97 million pounds in the second quarter of 2010, it said in an emailed statement. Political turmoil in Arab countries hit the region's investment banks by depressing stock markets and drying appetite for fresh capital. Analysts say the outlook remains grim.
EFG-Hermes said its operating revenue soared 94 percent year-on-year to 466 million pounds in the second quarter, supported by commercial banking, which produced revenue of 243 million pounds, or 52 percent of the total. Operating expenses at its investment banking business fell 14 percent to 173 million pounds, reflecting planned cost-cutting measures. But revenues from investment banking fell 36 percent on a drop in capital market and treasury operations. It also blamed a decline in brokerage revenue.
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