The Coronavirus pandemic has been called “the great equalizer” in the sense that it has stopped us all in our tracks regardless of where we live and what we do for a living. It has also exposed certain vulnerabilities such as inequalities in healthcare systems and there is no doubt that it is disproportionately affecting socially disadvantaged groups and low-income populations but at the end of the day, we are all at risk, we are all connected, and we must all stand together to put an end to it.

For multinational companies such as EFG Hermes, we were also faced with the challenge of dealing with the laws and regulations of multiple jurisdictions when it came to abiding by public health guidelines and government mandated shutdowns. It has been a delicate balance to maintain. We had to constantly look at the best ways to ensure the health and safety of our employees and clients, while maintaining our operations and remaining profitable throughout. The beautiful thing is that we not only managed to do so but we also managed to score a number of major wins for the company, a true testament to our resilience.

Because we had the foresight to establish our NBFI platform years ago, we have been able to survive the cyclical nature of capital markets in the past, and last year was no different. Our NBFI Platform, which was originally launched in 2015 to oversee our activities in the non-bank financing sector, continued to grow, outperform the market, and contribute positively to our bottom line. In 2020, we successfully merged our factoring and leasing arms under one entity and we added a new payment solutions provider, PayTabs Egypt, to our NBFI roster. The two new companies join our existing NBFI success stories; valU our online installment sale service app, Tanmeyah Microfinance, Egypt’s leading provider of microloans and Bedaya our mortgage service provider.

Our NBFI Platform, which was originally launched in 2015 to oversee our activities in the non-bank financing sector, continued to grow, outperform the market, and contribute positively to our bottom line. In 2020, we successfully merged our factoring and leasing arms under one entity and we added a new payment solutions provider, PayTabs Egypt, to our NBFI roster. The two new companies join our existing NBFI success stories; valU our online installment sale service app, Tanmeyah Microfinance, Egypt’s leading provider of microloans and Bedaya our mortgage service provider.

All of these assets were particularly crucial for us last year as more and more retail moved online due to COVID-19 health and safety measures. During the crisis, we found ourselves perfectly positioned to expand on our NBFI product offering which is part of our overall goal to widen our portfolio of NBFI companies and to bolster financial inclusion in Egypt.

In 2020, we also received the approval of the Central Bank of Egypt to conduct due diligence on the Arab Investment Bank, an acquisition target that we are pursuing in partnership with the Sovereign Fund of Egypt (TSFE). Together we aim to acquire 76% of the capital of the Bank. When concluded, the transaction will mark another important step in our strategy to transform EFG Hermes from a pure play investment bank into a universal bank that provides both banking and non-banking services to its clients in our home market of Egypt. It will also help to further the stability of our business and will be of great benefit to our shareholders.

Even during this remarkably challenging year, EFG Hermes remained the market leader and precedent setter it has always been. In terms of transactions, we concluded our first cross-border M&A transaction in East Africa since entering the Kenyan market in 2017 with advisory services to Pakistan’s United Bank Limited (UBL) on the sale of its Tanzanian subsidiary to Exim Bank Tanzania Limited. We also continued to ramp up our operations in KSA with the successful conclusion of advisory on the USD 700 million IPO of Dr. Sulaiman Al Habib Group on Tadawul early in the year and advisory on Alkhorayef Water & Power Technologies’ USD 144 million IPO on the Tadawul a year later in March 2021.

Our Securities Brokerage continued to top the league tables across our footprint with first place rankings in our key markets; Egypt, Kuwait, Dubai, and Kenya. We are also very proud of the fact that we were able to maintain the corporate access that we are renowned for by seamlessly transitioning our signature investor conferences to a virtual format. Two virtual investor conferences were held in 2020 and the third took place in March 2021.

The virtual conferences were a great success with a record number of attendees and thousands of virtual meetings being held between companies and investors across the globe. Everyone is adapting to the new normal and making the best of the situation that we are faced with. Along the way, we have learned that you can have virtual conferences, road shows and meetings from the safety of your own home and office, and still achieve your objectives. I believe that once the lockdowns and constraints are lifted and we have regained our freedom to move, travel and communicate without risk, the world will continue to conduct virtual activities alongside face-to-face meetings.

Throughout, we have also continued to maintain our values and ESG principles. The challenges of the past year have not adversely affected our commitment to sustainability, good governance and giving back to our communities; on the contrary, they have strengthened our resolve to lead by example as a responsible investor. We continued to be leaders in green investments and products. Our renewable energy platform Vortex Energy divested its solar platform (Vortex III) in 2020 but we are already making plans to begin investing in a number of new renewable assets including both solar and wind.

The EFG Hermes Foundation continued to work on its longstanding sustainable development initiatives in the Naga’ El Fawal and El Deir villages south of Egypt where we are committed to carrying out a comprehensive integrated development plan. The Foundation has also partnered with the Egyptian Food Bank and the Ministry of Social Solidarity to support thousands of families through the hardships of the pandemic in the Luxor governorate.

None of these remarkable achievements would have been possible without our people. I am extremely proud of our management, board members, and each and every member of our team across the 13 countries in which we operate, for having pulled through despite the pressure and the adverse conditions that prevailed and still prevail. I will continue to say that our best and most valuable asset is our people. Despite the impact of COVID-19, they have stood up to the challenge and proven the true resilience of the organization.

I would like to thank the shareholders and our esteemed Board of Directors for their support during these very difficult times. Our multinational board resides in 7 different countries including the US, the UK, France, Greece, Pakistan, the UAE and Egypt which meant we had to accommodate different time zones, but nonetheless, we managed to hold all our board meetings virtually and we were one of the very first public companies to hold a virtual Annual General Meeting (AGM) with electronic voting and attendance.

I am very grateful for the year that we have had and for the fact that we were fortunate enough to have built a large resilient organization that can withstand challenges even ones of such great magnitude as COVID-19. I am very well aware that we are among the most privileged, and that many businesses, particularly small and medium sized enterprises, in our home country and across the globe have been severely impacted by the crisis. We are also painfully aware that many of us have endured personal losses and hardships and have had to live with the pain of seeing family, friends and loved ones fall ill from the Coronavirus. I am however optimistic that there is some light at the end of the tunnel as vaccine rollout continues to accelerate and an economic recovery that favors emerging markets begins to take shape. As economic activity gains momentum, we can hopefully reverse some of the damage that has been done.

I am certain that together we will overcome.

Mona Zulficar

Chairperson