EFG was formed as the result of a merger between Egyptian Financial Group and the Hermes Group in 1996. In early 2000, Citibank acquired a minority stake in the company and continues to play an active role through its 4% stake in EFG. In 2001, EFG joined forces with CIIC, a leading private investor in Egypt and maintained its position as the largest player in the Egyptian investment banking industry. EFG’s shares are listed on the Cairo and London Stock Exchanges and are among the most actively traded stocks in Cairo. As of July 2005, EFG’s shareholders included the following: EFG Employee Trust (ESOP) 16%; Foreign Institutions 15%; Gulf retail investors 12%; Local Institutions 10%, and Treasury shares 5%. Public ownership amounted to 41%. EFG comprises of four business lines including investment banking, securities brokerage, asset management and private equity. Its total revenue and net income amounted to $32 million and $8.5 million, respectively, in 2004. Its’ ROAE and ROAA were 9.1% and 4.8%, respectively. As of June 30, 2005, total revenue grew to reach $42 million and net profit $15.8 million. EFG employs more than 350 people. EFG is seeking to consolidate its leading position in Egypt and capitalize on synergies in the Middle East region by becoming a regional financial institution. A regional expansion is central to its growth plans, since it will further enhance its distribution capability in the Gulf region and reduce its dependence on Egypt.

EFG’s expansion plan is estimated at $40 million to be financed through $40 million of loans to be provided by multilateral organizations including IFC and internal cash generation. The proposed IFC investment is a $20 million senior loan to EFG.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

EFG is headquartered in Cairo, Egypt. It also has a brokerage operation in Dubai since December 2004 and in Abu Dhabi since February 2005.

- By providing the proposed loan to EFG, IFC will expand the Company’s operation in the region and help bring additional competition in the respective markets. Ultimately, IFC’s investment would contribute to the development of regional capital markets. - IFC will promote further best practices in internal control policies and procedures. - IFC financing will strengthen the balance sheet of EFG by extending the maturity structure of its funding base.

This is a category C project according to IFC''s environmental and social review procedure. There will be minimal environmental and social impacts associated with this project. Therefore, no further environmental or social analysis is required.
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