Egypt’s EFG Hermes posts loss due to tax on Credit Libanais sale
EFG Hermes completed the sale of a 44.3 percent stake worth $310 million in the Lebanese bank in June. It sold to Arab and Lebanese investors at $33 per share and has said it would sell its remaining 19.5 percent stake next year.
The second quarter loss was attributed by the bank to taxes incurred through the sale and compares to a net profit of 177.49 million pounds during the same period last year.
“The taxes represent 118 million pounds from the 525 million pound sale,” Hanzada Nessim, head of investor relations, said.
The bank said in a statement that the earnings reflected a “one-off tax expense” from the quarter, but not “the EGP 525 million gain” from the sale. However, Nessim told Reuters that the bank expects to distribute profits from the sale by the end of the year.
“The governing council said yesterday that it will hold another meeting to propose methods of distribution, one of which will be cash distribution,” she said.
Revenues meanwhile jumped 10 percent year-on-year to 288 million Egyptian pounds on the back of a 14 percent rise in fees and commissions, which totalled 271 million Egyptian pounds.
EFG Hermes bought the Credit Libanais stake in 2010 for $542 million, saying at the time that the deal would aid expansion into Lebanon and the Levant and help broaden its product range.
But the civil war in Syria has hit Lebanese banks hard, prompting EFG Hermes to sell and resulting in the full separation of Crédit Libanais from EFG Hermes’ financials, the bank said on Thursday.
EFG Hermes reported that net losses in the first six months of the year amounted to 131.21 million Egyptian pounds.