EFG Hermes E : Annual Report 2021

Annual 2021

Report

A HOLISTIC SET OF

FINANCIAL PRODUCTS

AND SERVICES

Annual 2021

Report

A HOLISTIC SET OF FINANCIAL PRODUCTS AND SERVICES

Our success as a universal bank in Egypt with a leading investment bank franchise in Frontier Emerging Markets (FEM) comes from our ability to gain deep, on-the-ground knowledge of industries and countries, to focus on the needs of our diverse client base, and to then carve out avenues for growth.

Contents

EFG Hermes Holding at a Glance	04
Chairperson's Foreword	10
A Note from Our Group CEO	16
Management Discussion & Analysis	20
Sell-Side Platform	32
- Investment Banking	38
- Securities Brokerage	46
- Research	54
Buy-Side Platform	58
- Asset Management	62
- Private Equity	68
NBFI Platform	74
- Tanmeyah	80
- valU	86
- EFG Hermes Corp-Solutions	92
- PayTabs Egypt	98
- Bedaya	104
- Kaf	108
EFG EV Fintech	114
aiBANK	118
Corporate Governance	126
Risk and Compliance	132
Our People	138
Executive Committee	142
Board of Directors	150
Corporate Social Responsibility	160
Financial Statements	168

38

Years of success

EFG HERMES

HOLDING AT A

GLANCE

EFG Hermes Holding continues to expand its operational footprint not only to match changing dynamics in the market landscape but also to serve the ever-growing needs of its stakeholders

13

countries in our geographic footprint

75

MENA and frontier emerging markets in our coverage

EFG Hermes Holding at a Glance

EFG Hermes Holding at a Glance

EFG Hermes Holding offers its client base

• comprehensive suite of financial solutions through its three platforms: the Investment Bank, Non-Bank Financial Institutions (NBFI), and aiBANK

A Universal Bank in Egypt with the Leading Investment Bank Franchise in FEM

With a robust track record of over 38 years, EFG Hermes Holding continues to be a pioneer in the regions where it operates with its comprehensive suite of tailored financial solutions. From a leading investment bank to

1. full-fledgeduniversal bank in Egypt, with a leading investment bank arm and an extensive presence in 13 countries across four continents, the Firm continues to expand its operational footprint not only to match changing dynamics in the market landscape, but also to serve the ever-growing needs of its stakeholders. EFG Hermes Holding's holistic business strategy to bolster its operations through organic growth, strategic mergers, and acquisitions, has trans- formed the Firm into a universal bank in Egypt and a leading player in the financial services sector. The Firm offers its clientele a diverse array of products and services through its three verticals: the investment bank, the non-banking financial institutions (NBFI) platform, and the recently acquired commercial bank with an eye for driving shareholder value and fortifying its leadership position across its footprint.

and SMEs. During 2021, the Firm successfully captured the upside of global markets' recovery further, and it maintained the strong growth momentum across its core operations.

The Investment Bank

Securities Brokerage

EFG Hermes Securities Brokerage, the MEA region's premier brokerage house, offers its client base an unparalleled coverage across more than 75 MENA and Frontier Emerging Markets (FEMs). At present, the division's operational footprint spans across four continents in Egypt, Kuwait, the United Arab Emirate (UAE), Saudi Arabia (KSA), Oman, Jordan, Pakistan, Kenya, Nigeria, and Bangladesh.

Throughout 2021, EFG Hermes sustained its substantial market shares across its footprint, ranking first on the Egyptian Exchange (EGX), NASDAQ Dubai, and the Dubai Financial Market (DFM), and first on the Nairobi Securities Exchange (NSE). The Firm also ranked second in Abu Dhabi and the Ku- wait Stock Exchange (KSE) and fourth in Nigeria. At present, EFG Hermes Holding's Brokerage division covers 95% of the MSCI Frontier and MSCI Emerging Frontier indices, with the ability to execute in over 75 markets across Frontier and Emerging markets.

EFG Hermes One application was later launched in November 2021 in Egypt as well, including a roster of new features and tools, such as short-selling, margin trading, same-day trading, among others.

Investment Banking

The Firm's Investment Banking division has cemented its leading position in M&A advisory and ECM and DCM deal executions, becoming the regional investment bank of choice for FEM partners and clientele. The Investment Banking division continuously works toward expanding its geographical footprint, leveraging its wide network of MENA clients to raise demand for compelling opportunities, and carrying out the majority of the most prominent transactions in its markets of operations.

In 2021, the division delivered a stellar performance, registering a record-high of 41 transactions worth an aggregate value of USD 7.9 billion. Throughout the year, EFG Hermes' Investment Banking division continued to build on its year-on-year track record, successfully closing 16 DCM transactions with a total value of USD 560.4 million, 12 ECM transactions valued at USD 4.9 billion, and 13 M&A transactions worth USD 2.4 billion.

Research

What We Do

Through its three platforms, the Investment Bank, Non-Bank Financial Institutions (NBFI) and aiBANK, the group is perfectly positioned to consistently bring disruptive financial products and services to the market space, offering a wide portfolio that best serves its growing base of clients, including institutional investors, retail cli- ents, individuals, entrepreneurs, large institutions,

In 2021, the Firm launched an updated version of the EFG Hermes One application, its retail-focused online trading platform, by capitalizing on synergies in its business model. To further grow its digital pres- ence, the Firm launched the all-new EFG Hermes One application in Kenya, unlocking a multitude of compelling investment opportunities, with the platform offering online stock trading prospects on the Nairobi Securities Exchange (NSE). The all-new

EFG Hermes' Research division is the region's flagship provider of in-depth,real-time market insights, offering extensive equity, macro, strategy, and index research that paves the way for the Firm's divisions and ever-growing client base through financial decision-making processes. Boasting a team of experienced professionals and an expansive presence in numerous markets including Egypt, UAE, Pakistan, Kenya, Nigeria, KSA, Oman, and the UK, the division provides unrivalled market

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EFG Hermes Holding at a Glance

intelligence and insights on 319 stocks in 40 industries across 26 markets.

Asset Management

EFG Hermes' Asset Management division, the MENA region's flagship asset manager, offers its client base a diverse suite of mutual funds and discretionary portfolios comprising of both country-specific and regional mandates. The division's mandates include equity, money market, fixed income, indexed, and Sharia- and UCTIS-compliant mandates. At year-end 2021, the division recorded USD 2.6 billion in regional AUM and EGP 23.5 billion in Egypt.

Private Equity

Boasting a track record of over two decades, EFG Hermes' Private Equity division is a regional leader in the Private Equity field that is dedicated to driving accretive investments in strategic, high-demand sectors, with a specific focus on renewables, education, and healthcare. The division manages its renewables investments through its Vortex Energy platform, which was launched in 2014 with an eye for investing in high-impact renewable energy projects. On the education front, EFG Hermes' Egypt Education Fund (EEF) is a USD 150 million investment fund that was established in 2018, as part of a USD 300 million education platform in collaboration with Dubai-based education provider GEMS Education. In the healthcare sector, Rx Healthcare Management was established to manage a wide spectrum of investments across the healthcare sector to meet the rapidly-growing demand for healthcare solutions across Egypt, the MENA region, and Africa.

EFG EV Fintech

EFG EV Fintech was established in 2017 as a joint venture between EFG Hermes Holding and startup accelerator Egypt Ventures. Leveraging EFG Hermes Holding's world-class industry and financial know-how, EFG EV Fintech has worked its way to becoming Egypt's leading fintech-focused startup accelerator and micro-VC firm, continuously seeking out strategic fintech startups backed by innovative concepts and entrepreneurs. At present, the company boasts the country's largest fintech portfolio that encompasses renowned companies operating in key sectors, such as Insurance-tech,Regulatory-tech, Digital Banking, and SME lending.

EFG EV Fintech offers two separate investment programs, having operated an accelerator for seed- stage startups in collaboration with Falak Startups, which invested up to EGP 1 million in cash and EGP 300,000 worth of support functions in up to 10 companies per year. Simultaneously, the micro-VC arm invests up to EGP 5 million per company in later-stage startups, bridging the gap between seed finance and series-A funding.

By the end of 2021, EFG EV Fintech had invested a total of USD 1 million to fund seven startup com- panies, including Fintech Galaxy, Mozare3, Dayra, Fatura, Raseedi, Yashry/Edfa3ly, and Zvendo.

Non-Bank Financial Institutions

Tanmeyah

Established in 2009 and acquired by EFG Hermes Holding in 2016, Tanmeyah Microenterprise Services is Egypt's number one microfinance solutions provid- er, offering funding solutions to lower-income, small and micro enterprise owners with limited access to capital. Tanmeyah offers a myriad of innovative financial solutions targeted at governorates where business owners typically lack access to funding from conventional banking channels, with an eye for driving financial inclusion in Egypt and bolstering the development of surrounding communities.

By year-end 2021, Tanmeyah had a total of 300 operational branches serving over 381,000 borrowers in 25 of the 27 Egyptian governorates.

EFG Hermes Corp-Solutions

Established in 2020 as an integral part of EFG Hermes Holding's NBFI platform, EFG Hermes Corp-Solutions was launched with an eye for consolidating the Group's factoring and leasing businesses, EFG Hermes Leasing and EFG Hermes Factoring, into one integrated entity. The company offers its client base a wide array of top-notch, disruptive leasing and factoring tools and advisory services that help bolster business growth and development and create sustainable value for stakeholders.

By year-end 2021, EFG Hermes Corp-Solutions registered an aggregate value of leasing and factoring

bookings amounting to a record high of EGP 8.1 billion versus the EGP 4 billion booked at year-end 2020, reflecting a twofold Y-o-Y increase.

valU

Launched in 2017, valU is EFG Hermes Holding's leading Buy-Now,Pay-Later (BNPL) lifestyle- enabling fintech platform, offering convenient and customizable financing solutions to its client base. With over 5,000 points of sale and 300 websites, valU provides unrivaled access to a vast network of stores, service providers, and e-commerce platforms across a diverse array of categories, including home appliances, electronics, home finishing, furniture, residential solar solutions, healthcare, education, travel, and fashion, among others. valU grants customers the ability to use their smartphones to access the company's financing plans with over 1,657 merchants across Egypt over convenient installments from six to 60 months.

In 2021, valU delivered an outstanding performance, recording over 96,000 transacting customers and over 452,000 transactions completed through the company's application.

PayTabs Egypt

Established in KSA in 2014, PayTabs is an award- winning global fintech solutions platform with a presence spanning over seven countries. In 2019, EFG Hermes Holding partnered with PayTabs to establish PayTabs Egypt as part of the Firm's growing NBFI platform, collaborating to build a cutting-edge platform that drives financial inclusion and serves the digital payment needs of multiple consumer segments. Today, PayTabs Egypt is Egypt's most innovative provider of digital payment solutions.

Bedaya

Bedaya Mortgage Finance (Bedaya) was established in 2019 as a joint venture between Talaat Moustafa Group (TMG), Egypt's leading developer of premium real estate communities; Ghabbour Auto's NBFI arm, GB Capital; and EFG Hermes Holding's NBFI platform. Bedaya currently stands as Egypt's sole non-bank online mortgage provider, offering clients a comprehensive suite of superior mortgage financing

solutions on residential, commercial, and administrative properties in Egypt. The company finances up to 90% of the current property value for residential units and up to 80% for commercial units, capped at EGP 28 million and EGP 56 million, respectively.

In 2021, Bedaya's operational capital registered significant Y-o-Y growth, with the company recording a total of five banks, with facilities worth EGP 1.5 billion. The company also substantially grew its portfolio to record EGP 1,150 million, with a client base of 437.

Kaf

Kaf, the Firm's insurance arm, was established in 2020 after a 75% stake acquisition of Tokio Marine Egypt Family Takaful by EFG Hermes Holding and Ghabbour Auto (GB Auto). In the time following the acquisition, the company has begun positioning itself as a leading tech-enabled insurance provider that aims to offer bespoke life, savings, health, and car insurance services to individuals, businesses, and communities at large.

In 2021, Kaf's operations registered significant growth on the back of the increase in cross- selling synergies with GB Auto and EFG Hermes Holding. By the end of the year, the company had moved from less than 0.1 million to over 1 million individuals insured, making it one of the largest life insurers in the Egyptian market by the number of people covered.

Commercial Banking

aiBANK

In 2021, EFG Hermes Holding concluded the acquisition of a 51% majority stake in the Arab Investment Bank (aiBANK), marking the Firm's strategic entry into the Egyptian commercial banking sector, and transforming EFG Hermes Holding into a full-fledged universal bank in Egypt. The acquisition was executed in line with the Firm's strategy to continue providing clients with a comprehensive suite of innovative financial solutions. In partnership with the Sovereign Fund of Egypt (TSFE), EFG Hermes Holding aims to unify the country's public and private sectors, playing a pivotal role in leading the drive for financial inclusion and digitization across the country.

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