CAIRO – Egyptian investment bank Beltone Financial Holding is diversifying into non-banking financial activities in a bid to return to profit in 2021, its CEO told Reuters on Tuesday.
The bank, one of Egypt’s biggest financial groups, will set up three new subsidiaries in September, for financial leasing, consumer finance and venture capital, CEO Ibrahim Karam said.
The financial leasing company will have an expected portfolio of 600 million Egyptian pounds ($37.78 million) within the first year of operations, while the consumer finance company’s portfolio is expected to reach 400 million pounds in the first year, Karam said in an interview.
Beltone, controlled by Egyptian billionaire Naguib Sawiris, had already obtained licences for the new companies this month, hired staff, set up offices and even agreed on some deals, he said.
“The new companies, along with strengthening existing activities, will help us return to profit in 2021,” Karam said.
The company said last year it was aiming for non-banking financial activities to contribute 30-40% of its revenues within three years.
Sawiris bought Beltone Financial in November 2015 for about 650 million pounds. The group, which has branches in Europe, the United States and the Middle East, now has 13 subsidiaries specialising in investment, asset management and securities.
Beltone’s consolidated losses shrank by about 52% in the second quarter of this year to 12.1 million pounds, from 25.2 million a year earlier.
In January, Beltone said that it plans to sell its 60% stake in New York-based brokerage Auerbach Grayson & Company to help stem losses. It bought the stake in 2016.
Asked when he expects Beltone’s exit from Auerbach Grayson, Karam said: “We are waiting for the regulatory authorities there to approve the deal, but we have concluded an agreement with a buyer and signed contracts.”
He didn’t disclose the identity of the buyer but said the investor was not from a Gulf country.
($1 = 15.8800 Egyptian pounds)
(Wroting by Mahmoud Mourad; Editing by Susan Fenton) (([email protected]))