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UPDATE 1-EFG-Hermes Q3 consolidated net income down 42 pct

Published 11/30/2010, 04:32 AM
Updated 11/30/2010, 04:36 AM

* Plans to save $10 million a year after acquisition

* One-off charge of $10 million may hit in Q4

* Shares down 1.1 percent

(Adds detail)

CAIRO, Nov 30 (Reuters) - Egyptian investment bank EFG-Hermes reported a 42 percent fall in third-quarter net income and said it was working on a plan for $10 million annual savings after its recent acquisition of a Lebanese bank.

EFG-Hermes, which expanded into commercial banking when it bough a controlling interest in Credit Libanais in November, said on Tuesday it was finalising a corporate regorganisation to streamline business.

"The proposed plan is expected to result in cost savings of approximately $10 million in the annual operating expenses, at a cost of a one-off charge of $10 million to be potentially booked in Q4 2010," it said.

The bank's consolidated third-quarter net income fell to 88.1 million Egyptian pounds ($15.2 million). Fee and commission income rose 5 percent to 185 million pounds.

Lower brokerage revenues as a result of a summer lull coinciding with the Muslim fasting month of Ramadan when business typically slows was offset by an increase in revenue from investment and private banking activities, it said.

"The investment banking team is currently involved in two high-profile potential transactions. The first is the $6.6 billion merger of Weather and Vimpelcom and the second is the sale of Olympic Group to Electrolux for $475 million," it said.

Following the acquisition of Credit Libanais, total consolidated assets stood at 47.1 billion pounds at the end of the third quarter.

EFG-Hermes shares were down 1.1 percent by 0915 GMT, underperforming a broader market down 0.5 percent. (Writing by Edmund Blair; Editing by Dan Lalor) ($1 = 5.786 Egyptian pounds)

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