Egypt’s EFG-Hermes eyes revenue lift with Saxo Bank online trading deal

November 16, 2016 5:26 pm


* Egypt’s EFG-Hermes announced a strategic partnership with Saxo Bank

* Middle East has traditionally lagged behind US and Europe in electronic trading

* The new platform will allow clients access to financial instruments in MENA markets

Egypt’s EFG-Hermes, one of the Middle East’s largest investment banks, announced a strategic partnership on Wednesday with Saxo Bank to launch a multi-asset online trading platform as it seeks to grow its revenue in the digital space.

Lagging Middle East

The Middle East has traditionally lagged behind the United States and Europe in electronic trading with a lot of investors doing such business via the telephone or face-to-face.

But EFG-Hermes sees demand for electronic trading coming from its hundreds of thousands of brokerage clients, particularly in Saudi Arabia, Kuwait and the United Arab Emirates.

“We believe this partnership will generate revenues from year one for EFG-Hermes and we expect that to grow over time,” said Karim Awad, group chief executive of EFG-Hermes, which operates in Egypt, UAE, Saudi Arabia, Oman, Jordan and Kuwait.

“Globally, there’s been a migration towards online and electronic trading and I’m pretty confident the Middle East will follow. We are already seeing early signs.”

MENA access

The new platform will allow clients access to financial instruments in both multiple Middle East and North Africa markets, as well as global exchanges. Clients will be able to trade across equities, fixed income and foreign exchange from a single account.

Online trading took off in the United States in the 1990s, with Denmark-based Saxo Bank launching its first online trading platform in 1998. Kim Fournais, Saxo Bank’s chief executive and founder, estimated that more than half of trading in the Middle East and North Africa was done electronically.

Awad said EFG-Hermes planned to add a number of other digital services in the future, while expanding its “non-bank” offering in Egypt and hiring more staff in the Gulf to offer more products in the region.

Increasing its product offering was one part of the bank’s expansion strategy, with the other being extending its geographic footprint, said Awad.

Last month it said it was seeking regulatory approval to open a permanent office in New York to serve institutional clients in the United States.

Awad said the bank would also start operations from the first quarter of next year in Pakistan after acquiring earlier this year a 51 per cent stake in Invest & Finance Securities, a local financial firm.

 

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