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The Egyptian Tax Authority will receive EGP393 million ($20.5 million) in corporate taxes from EFG Hermes Holding, a financial services company headquartered in Cairo.
EFG Hermes operates under the leadership of Egyptian investment banker Karim Awad.
According to information in its most recent financial statements, the company’s corporate income tax expense for the first half of 2022 was EGP393 million ($20.5 million), a 72-percent increase over the EGP228.4 million ($11.92 million) that it incurred during the same period the previous year.
The Cairo-based group revealed that the consolidation of its subsidiary operation, Arab Investment Bank (aiBank), which racked up a total of EGP142 million ($7.4 million) in income tax, as well as an increase in tax charges from its Egyptian operations, were the primary causes of the 72 percent increase in its corporate income tax expense.
The EGP594 million ($31.02 million) in taxes that the Awad-led business paid last year, when it claimed a profit of EGP1.46 billion ($79.6 million), is around 66 percent of the $20.5-million tax charge that it would face in the first half of 2022.
The increase in the group’s tax burden considerably weighed on its profitability in the first half of 2022, as profit after tax fell by one percent from EGP698 million ($36.4 million) during the same period in 2021 to EGP689 million ($36 million).
During the period, the company’s earnings were also significantly impacted by a 45-percent rise in operating expenses, which was the result of the consolidation of aiBank’s operating expenses, as well as an increase in its investment banking segment’s operating expenses.
Despite the single-digit slump in earnings, the bank’s assets grew by 15 percent during the first six months of its reporting period from EGP45.6 billion ($2.38 billion) at the start of the year to EGP52.6 billion ($2.74 billion), as it continued to improve liquidity management.
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