EFG Hermes Corp-Solutions

Established in 2020 as part of EFG Hermes Holding’s Non-Bank Financial Institutions (NBFI) platform, EFG Hermes Corp-Solutions was formed with an eye to consolidating the Group’s factoring and leasing businesses, EFG Hermes Leasing and EFG Hermes Factoring, into one bundled entity. The company offers its client base a multitude of top-notch, disruptive leasing and factoring tools that help push forward business growth and development and create long-term value across the board. Backed by a team of highly experienced individuals, EFG Hermes Corp-Solutions continues to offer large corporates and SMEs cut-to-fit financing solutions that are prompt, effective, and impactful. Aside from the company’s leasing and factoring service offerings, EFG Hermes Corp-Solutions presents its clientele with regional market insights and intelligence, and financial advisory services, leveraging EFG Hermes Holding’s decades of expertise and exceptional in-house research capabilities. Today, EFG Hermes Corp-Solutions has worked its way towards becoming a one-stop-shop, consistently raising the bar in the Egyptian leasing and factoring markets, and playing a pivotal role in driving financial inclusion across the country.

2021 was a year full of record-breaking achievements for EFG Hermes Corp-Solutions. Despite the challenges faced by the company following the onset of the COVID-19 pandemic, which created liquidity shortages for many clients in addition to a highly competitive market environment, EFG Hermes Corp-Solutions continued to expand its service offerings across the Egyptian market, delivering exceptional results across its leasing and factoring operations. At year-end 2021, the company contributed a stellar EGP 8.1 billion to the Group’s NBFI platform. The year also saw EFG Hermes Corp-Solutions take strategic measures to grow its roster of clients, expanding its portfolio to house even more prominent clients in the country’s key industries, such as the real estate and retail sectors. By the end of the year, EFG Hermes Corp-Solutions had a total of 236active clients utilizing its leasing and factoring services.

On the leasing front, 2021 saw EFG Hermes Corp-Solutions provide clients with more financing solutions that enabled them to capitalize on compelling market opportunities, enrich and expand product offerings, reengineer technological infrastructure, and much more. The division focused heavily on pioneering leasing tools that add long-term value to clientele, all while safeguarding their assets and laying the foundation for them to explore accretive business growth and scaling prospects. At the end of the year, EFG Hermes Corp-Solutions’ leasing business attained a total value of bookings amounting to EGP 3.9 billion, reflecting a remarkable 62.5% increase from the EGP 2.4 billion booked at year-end 2020. The leasing business’s exceptional performance enabled EFG Hermes Corp-Solutions to capture a larger market share of 10.39%, coming in at third place in the market at the end of 2021.

On the factoring front, EFG Hermes Corp-Solutions continued to offer its client base of companies a vast range of debt and export factoring tools, that enabled them to expand their regional footprint, bolster liquidity positions, and maintain healthy and lucrative relationships with suppliers and creditors alike. By the end of 2021, EFG Hermes Corp-Solutions had successfully grown its factoring portfolio by 53%, recording a total value of bookings amounting to EGP 4.2 billion versus the EGP 1.6 billion booked one year previously. The company’s factoring business cemented its first-place ranking in the Egyptian factoring market, maintaining the lion’s share of 22.82% of the market.

Additionally, the year witnessed EFG Hermes Corp-Solutions substantially capitalize on the cross-selling prospects with EFG Hermes Holding’s other lines of business, particularly with the Group’s leading Investment Banking division. During the year, the company also signed an EGP 750 million sale and leaseback agreement with real estate powerhouse Misr Italia Properties to refinance and accelerate the construction of its state-of-the-art property Garden 8 Mall in New Cairo. In addition to Misr Italia and Marakez, EFG Hermes Corp-Solutions also acted as the lender on a sale and leaseback agreement amounting to EGP 750 million with real estate developer Madinet Nasr for Housing and Development (MNHD), while EFG Hermes’ Investment Banking division acted as the financial advisor for the transaction, which is expected to encompass several follow-on securitization issuances. These two transactions have garnered significant traction, attesting to EFG Hermes Corp-Solutions’ ability to develop robust business models and innovative solutions that enable companies to access funding that best serves their ever-growing needs. By cross-selling with the Group’s flagship Investment Bank, EFG Hermes Corp-Solutions continues to bridge the gap for securitization transactions.

As part and parcel of the Group’s strategy to continue leveraging its successful products and bringing them to the market, the Firm’s Investment Banking division concluded EFG Hermes Corp-Solution’s issuance of a securitization bond worth EGP 790 million backed by a receivables portfolio of EGP 815.1 million, representing 47 lease contracts. This transaction marked the first issuance in the bond program with a value of EGP 3 billion.

Parallel to cross-selling with the Firm’s Investment Banking division, 2021 saw EFG Hermes Corp-Solutions leverage cross-selling prospects with other flagship players in the Group’s NBFI platform. As such, the company formed a partnership with Buy-Now, Pay-Later (BNPL) lifestyle enabling fintech platform valU, accessing a larger number of valU’s merchants and providing factoring services in the BNPL sphere. Through this partnership, merchants received access to financing with a pre-approved limit ranging from EGP 50K to EGP 10 million. Additionally, EFG Hermes Corp-Solutions partnered with the NBFI platform’s Fintech accelerator and micro-VC arm, EFG EV Fintech, unlocking opportunities for start-ups to access financing methods, and ultimately elevating entrepreneurial activities in the Fintech industry across the region. In 2021 specifically, EFG Hermes Corp-Solutions partnered with EFG EV Fintech to offer financing solutions for start-ups such as Dayra, Cayesh, and Edfa3ly.

In 2021, EFG Hermes Corp-Solutions delivered exceptional results across its core operations, recording 1,308 new bookings in 2021 compared to 729 bookings recorded in 2020. Consequently, total value of new bookings grew twofold to record EGP 8 billion, up from the EGP 4 billion booked at year-end 2020. The company recorded a net profit of EGP 109 million at year-end 2021, reflecting a 92% increase from the EGP 57 million booked one year previously.

Going forward, EFG Hermes Corp-Solutions aims to continue capitalizing on cross-selling prospects with EFG Hermes Holding’s entities, especially the Firm’s Investment Banking division, leveraging the division’s intellectual credibility to launch a comprehensive suite of bespoke financial products and services that best serve clients’ different sizes, operational sectors, and risk appetites. Additionally, the company will continue expanding its operational footprint, and growing its portfolio to house a wider range of clients and sectors. As such, EFG Hermes Corp-Solutions continuously explores market opportunities, with an eye to launching new products and services that will perfectly position the company to capture a larger share in its markets of operations, cementing its position as one of Egypt’s leading leasing and factoring service providers.