Dear Shareholders,
Each year I use this space to reflect on the year that has passed, its challenges and achievements as well as the headwinds and the tailwinds that shaped us as an organization. 2020 was a year unlike any other, not just for us as EFG Hermes but also for the world, yet despite its challenges and circumstances, I am proud to say the year was marked with numerous accomplishments. As is customary, this year we continued our progress in terms of our six pillars; the 6Ps, that guide our strategic progress: recruiting People with the most talented minds to join our growing family, our Positioning in the various markets in which we operate, the new Products and services we offer our clients, our proximity to clients in terms of our on-the-ground Presence and expertise, the Profitability we deliver our shareholders in terms of absolute figures and ROEs, and our Public responsibility towards the communities that we operate in continue to be primary areas of focus in every step that we take as a group.
Although the Firm continued to make accomplishments under each pillar, what set us apart this year was one thing: perseverance. Faced with a pandemic that continues to impact the lives of our employees, clients, and their loved ones, and one that claims lives daily, it is only through the incredible, collective effort of each and every one, from healthcare professionals to front-line workers, teachers to parents, employees both at home and at the office, that we have persevered as individuals and — for us here at EFG Hermes — as a Firm during the past 12 months. Our resilience in the face of challenges speaks volumes to the strength of the teams we have put together across our platforms, from the Buy-Side to our NBFIs as well as our Sell-Side divisions. Our revenue streams are well diversified, our systems are robust and, most importantly, we are backed by an incomparable and agile group of people working tirelessly in each of our jurisdictions.
We were fortunate to enter this latest crisis with an unleveraged balance sheet, but we were also proactive in managing our liquidity, prudent in implementing IFRS 9 (a year in advance of the required deadline), and sensibly provisioned for our growing NBFI loan book. Amid the chaos, we also started looking for ways to enhance our business model and increase opportunities for cross selling, which prepares us for more growth that should come in a post-COVID world. Our investment banking division successfully concluded 24 transactions worth an aggregate value of USD 1.7 billion, displaying our ability as a leading adviser across our markets executing high-value transactions in sub-optimal market conditions. On the Private Equity front, realized incentive fees of EGP 349 million from the strategic exit from our controlling stake in Vortex Solar significantly contributed to the Group’s performance for the period. Our NBFI platform continues to bring in stellar results, with our consumer financing platform valU recording its highest-ever bookings since launch.
Our outstanding support functions began preparing well in advance for potential work-from-home scenarios, allowing our employees to continue to serve clients at the level to which they have become accustomed, even as lockdowns across our multiple jurisdictions became a reality.
Perhaps our crowning achievement this year is being named Sustainability Champion by Egypt’s Financial Regulatory Authority (FRA) in its first publication recognizing players in the non-bank financial service industry championing sustainable development. Since 2014, EFG Hermes has made sustainability a fundamental strategy plank when it comes to our vision for the future. Our operations are aligned with the principles of the United Nations Global Compact (UNGC) and Sustainable Development Goals (SDGs), in addition to Egypt’s journey to inclusive development as outlined in the nation’s Vision 2030. In 2020, the Firm began laying the groundwork to implement frameworks to integrate ESG principles in decision making processes, investment strategies, client advisory solutions, and even in research products in the year ahead. With responsible investing becoming a strategic necessity around the globe, the Firm will continue to work toward growing its ESG ecosystem, identifying risks and impacts the business has on its stakeholders, as well as measuring and mitigating those impacts to drive shared value.
The past few years have seen the Firm build a robust business model to help withstand another year of volatility, with the challenges that plagued us in 2020 expected to carry into 2021. As always, we will remain committed to driving value for all our stakeholders, be that in terms of returns, employee engagement, or community development, and we could not be better positioned to come out the other end of the storm as strong, if not stronger than before.
