RNS Number : 6830C
EFG Holding S.A.E.
30 April 2026
http://www.rns-pdf.londonstockexchange.com/rns/6830C_1-2026-4-30.pdf
EFG Holding Company
(Egyptian Joint Stock Company)
Consolidated financial statements.
For the year ended 31 December 2025
-
Table of contents
Page(s)
Independent auditor's report
1 - 4
Consolidated statement of financial position Consolidated statement of profit or loss
5 6
Consolidated statement of comprehensive income
7
Consolidated statement of changes in equity
8 - 9
Consolidated statement of cash flows
10 - 11
Notes to the consolidated financial statements
12 - 120
Consolidated statement of financial position
As at 31 December 2025
These consolidated financial statements were approved and authorised for issue on 30 April 2026 and signed by:
Mona Zulficar Chairperson
Karim Awad Group Chief Executive Officer
The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.
Consolidated statement of profit or loss
For the year ended 31 December 2025
Notes
2025 EGP Thousand
2024 EGP Thousand
Interest income
31
26,981,276
22,319,642
Interest expense
(19,544,037)
(15,310,258)
Net interest income
7,437,239
7,009,384
Fee and commission income
31
14,009,331
11,452,386
Fee and commission expense
(2,349,074)
(1,357,101)
Net fee and commission income
11,660,257
10,095,285
Realized securities' gain/(loss)
2
661,111
(57,356)
Net changes in the fair value of investments at FVTPL
6
762,731
2,844,098
Dividend income
31
127,846
85,998
Other revenues
27
1,844,508
462,570
Net gains on derecognition of financial assets at amortized cost
31
2,508,493
960,692
Impairment loss on financial assets - net of recoveries
28
(950,925)
(773,002)
Foreign currencies exchange differences
31
594,928
2,907,706
Share of gain from equity accounted investees
31
72,682
48,853
24,718,870
23,584,228
General and administrative expenses
30
(16,334,826)
(14,713,532)
Financial guarantee provision
22
(113,575)
(40,678)
Provisions
22
(333,083)
(738,908)
Depreciation and amortisation
30.2
(895,095)
(633,597)
Profit before tax
7,042,291
7,457,513
Income tax expense
29
(1,239,570)
(2,370,417)
Profit for the year
5,802,721
5,087,096
Attributable to:
Shareholders of the Holding Company
3,753,339
4,098,933
Non-controlling interests
2,049,382
988,163
5,802,721
5,087,096
Earnings per share:
Basic earnings per share - EGP
33
2.61
2.84
Diluted earnings per share - EGP
33
2.61
2.84
The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.
Consolidated statement of comprehensive income
For the year ended 31 December 2025
Notes
2025
2024
EGP Thousand
EGP Thousand
Profit for the year
5,802,721
5,087,096
Other comprehensive income items:
Items that may be reclassified to the consolidated statement of profit or loss
Foreign currency translation differences - reclassified to profit or loss
(886,520)
(26,944)
Net gain on investments in debt instruments at FVOCI- net change in fair value
137,113
186,661
Investments at fair value through OCI-net change in fair value - reclassified to profit or loss
(17,468)
213,739
Tax relating to such items
21
(2,037)
(102,709)
(1,442,481)
7,326,009
Items that will not be reclassified to the consolidated statement of profit or loss
Investment at fair value through OCI - reclassified to retained earnings
(99,927)
555
Net (loss)/gain on investments in equity instruments designated at fair value through OCI - net change in fair value
(396,839)
20,241
Actuarial (loss)/gain on remeasurement of employees' benefits obligations
20.2
(21,483)
2,178
Share of other comprehensive income of equity accounted investees
12,491
4,672
Other comprehensive income, net of tax
(1,948,239)
7,353,655
Total comprehensive income for the year
3,854,482
12,440,751
Attributable to:
Shareholders of the Holding Company
1,856,730
11,076,685
Non-controlling interests
1,997,752
1,364,066
3,854,482
12,440,751
The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2025
Attributable to owners of the Company
Other reserves
2024 EGP Thousand
Share capital
Legal reserve
Share premium
General reserve
Translation reserve
Fair value reserve
Employee stock ownership plan reserve
Operational risk reserve
Treasury shares
Retained earnings
Total
Non-controlling interests
Total equity
Balance as at 31 December 2023, as previously reported
7,298,030
972,344
1,668,624
158
5,650,019
(1,285,459)
419,950
58,442
-
8,538,917
23,321,025
4,074,904
27,395,929
Impact of purchase price allocation on subsidiary
-
-
-
-
-
-
-
-
-
(4,461)
(4,461)
7,571
3,110
Restated balance as at 31 December 2023
7,298,030
972,344
1,668,624
158
5,650,019
(1,285,459)
419,950
58,442
-
8,534,456
23,316,564
4,082,475
27,399,039
Total comprehensive income
Profit
-
-
-
-
-
-
-
-
-
4,098,933
4,098,933
988,163
5,087,096
Other comprehensive income
-
-
-
-
6,728,166
247,408
-
-
-
2,178
6,977,752
375,903
7,353,655
Total comprehensive income
-
-
-
-
6,728,166
247,408
-
-
-
4,101,111
11,076,685
1,364,066
12,440,751
Transactions with owners of the Group
Contributions and distributions
Dividends
-
-
-
-
-
-
-
-
-
(5,809)
(5,809)
(139,963)
(145,772)
Transferred to legal reserve
-
21,345
-
-
-
-
-
-
-
(21,345)
-
-
-
Transferred to share premium
-
-
129,214
-
-
-
(55,276)
-
-
-
73,938
-
73,938
Operational risk reserve
-
-
-
-
-
-
-
37,155
-
(37,155)
-
-
-
Purchasing of treasury shares
-
-
-
-
-
-
-
-
(399,975)
-
(399,975)
-
(399,975)
Sale of equity securities through OCI
-
-
-
-
-
-
-
-
-
2,975
2,975
1,296
4,271
Changes in ownership interests
Changes in ownership interests without a change in control
-
-
-
-
-
-
-
-
-
(5,552)
(5,552)
1,265
(4,287)
Balance as at 31 December 2024
7,298,030
993,689
1,797,838
158
12,378,185
(1,038,051)
364,674
95,597
(399,975)
12,568,681
34,058,826
5,309,139
39,367,965
The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.
Consolidated statement of changes in equity (continued)
For the year ended 31 December 2025
Attributable to owners of the Company
Other reserves
2025 EGP Thousand
Share capital
Legal reserve
Share premium
General reserve
Translation reserve
Fair value reserve
Employee stock ownership plan reserve
Operational risk reserve
Treasury shares
Retained earnings
Total
Non-controlling interests
Total equity
Balance as at 31 December 2024
7,298,030
993,689
1,797,838
158
12,378,185
(1,038,051)
364,674
95,597
(399,975)
12,568,681
34,058,826
5,309,139
39,367,965
Total comprehensive income
Profit
-
-
-
-
-
-
-
-
-
3,753,339
3,753,339
2,049,382
5,802,721
Other comprehensive income
-
-
-
-
(1,453,852)
(421,274)
-
-
-
(21,483)
(1,896,609)
(51,630)
(1,948,239)
Total comprehensive income
-
-
-
-
(1,453,852)
(421,274)
-
-
-
3,731,856
1,856,730
1,997,752
3,854,482
Transactions with owners of the Group
Contributions and distributions
Dividends
-
-
-
-
-
-
-
-
-
(344,162)
(344,162)
(210,497)
(554,659)
Transferred to share premium
-
-
327,114
-
-
-
(243,114)
-
-
-
84,000
-
84,000
Operational risk reserve
-
-
-
-
-
-
-
(21,138)
-
21,138
-
-
-
Writing off treasury shares
(118,565)
-
(281,410)
-
-
-
-
-
399,975
-
-
-
-
Sale of equity securities through OCI
-
-
-
-
-
-
-
-
-
99,927
99,927
-
99,927
Changes in ownership interests
Changes in ownership interests without a change in control
-
-
-
-
-
-
-
-
-
(332,722)
(332,722)
381,869
49,147
Share of NCI in the increase of subsidiaries' paid-up capital
-
-
-
-
-
-
-
-
-
-
-
2,057,119
2,057,119
Balance as at 31 December 2025
7,179,465
993,689
1,843,542
158
10,924,333
(1,459,325)
121,560
74,459
-
15,744,718
35,422,599
9,535,382
44,957,981
The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.
Consolidated statement of cash flows
For the year ended 31 December 2025
Notes
2025
2024
EGP Thousand
EGP Thousand
Cash flows from operating activities
Profit for the year before income tax
7,042,291
7,457,513
Adjustments for:
Depreciation and amortisation
30.2
895,095
633,597
Changes in provisions
22
204,255
502,961
Gains on sale of property, plant and equipment
27
(16,414)
(22,882)
Gain from securitization
(2,508,493)
(960,692)
Gain on sale of investment property
-
(7,648)
Gain/(loss) on sale of investment held at FVOCI
(21,385)
203,295
Amortisation of premium / issue discount
(1,725,768)
(2,171,081)
Gain from assets acquired as settlement of debts
(41,593)
(17,398)
Gain on sale of other assets
(1,207,010)
-
Changes in the fair value of investments held at FVTPL
(762,731)
(2,844,098)
Share of gain from equity accounted investees
31
(72,682)
(48,853)
Impairment loss on assets
28
950,925
773,002
Share-based payment
83,890
73,938
Provision for employees' benefits
20.2
17,724
15,477
Foreign currency translation differences
(1,036,445)
6,395,850
Foreign currency exchange differences
31
(594,928)
(2,907,706)
Gain on selling of investments in subsidiaries and associates
(503,129)
(2,599)
Operating profit before changes in assets and liabilities
703,602
7,072,676
Changes in assets and liabilities:
Other assets
(3,982,646)
(137,305)
Creditors and other credit balances
(1,125,801)
(2,800,194)
Accounts receivables
558,807
(3,869,228)
Accounts payable
1,201,269
(895,777)
Accounts payable - customers credit balance at FVTPL
6,086,255
7,221,146
Loans and facilities to customers
(28,245,740)
(20,424,633)
Due from banks
(1,880,784)
(4,699,056)
Due to banks
2,327,980
(3,196,040)
Customers deposits
13,065,583
9,102,583
Employees' benefits obligations paid
20.2
(1,995)
(37,828)
Investments at FVTPL
(10,636,605)
466,184
Income tax paid
(1,470,852)
(1,052,558)
Net cash used in operating activities
(23,400,927)
(13,250,030)
Cash flows from investing activities:
Purchase of property, plant and equipment and other intangible assets
(930,532)
(1,241,297)
Proceeds from sale of property, plant and equipment
75,328
36,355
Proceeds from sale of assets held for sale
13,293
-
Proceeds from sale of investment property
-
9,579
Proceeds from sale of other assets
2,086,688
-
Proceeds from sale of investments at FVOCI
22,026,767
29,663,914
Purchase of investments at FVOCI
(33,983,879)
(26,353,791)
Payments to purchase investment in subsidiaries
(257,609)
(5,562)
Proceeds from sale of investment in subsidiaries
500,045
-
Purchase of equity accounted investees
(66,000)
(71,000)
Proceeds from sale of equity accounted investees
762,317
13,083
Dividends received
10,000
16,185
Net cash (used in)/generated from investing activities
(9,763,582)
2,067,466
The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.
Consolidated statement of cash flows (continued)
For the year ended 31 December 2025
Notes
2025
2024
EGP Thousand
EGP Thousand
Cash flows from financing activities:
Capital contributions from non-controlling interests in subsidiaries
2,057,119
-
Dividends paid
(366,290)
(621,494)
Proceeds from securitization
9,532,638
4,935,750
Proceeds from issued bonds
3,550,000
1,432,665
Payments for issued bonds
(1,073,040)
(749,003)
Proceeds from financial institutions
24,755,942
2,142,133
Payments to financial institutions
(16,670,447)
-
Proceeds from loans and borrowings
11,149,001
4,914,826
Payments for loans and borrowings
(7,602,922)
(1,752,246)
Purchase of treasury shares
-
(399,975)
Net cash generated from financing activities
25,332,001
9,902,656
Net change in cash and cash equivalents
(7,832,508)
(1,279,908)
Cash and cash equivalents at 1 January
24,541,976
20,295,762
Effect of exchange rate changes
(539,218)
5,526,122
Cash and cash equivalents at 31 December
5
16,170,250
24,541,976
The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.
1 Incorporation and principal activities
1.1 Incorporation
- EFG Holding Company (Previously EFG Hermes Holding Company) (Egyptian Joint Stock Company) (the "Group" or "Holding Company") is an Egyptian Joint Stock Company subject to the provisions of the Capital Market Law No.95 of 1992 and its executive regulations. The Group's registered office is located in Smart Village building No. B129, phase 3, KM 28 Cairo / Alexandria Desert Road, 6 October 12577 Egypt.
- The name of the company has been changed to EFG Holding through the approval of the General Assembly dated May 24, 2023 and was reflected in the commercial register on June 14, 2023.
- EFG Holding shares are listed on the Egyptian Ex-change (EGX) and the London Stock Exchange (LSE) in the form of USD-denominated Global Depository Receipts ("GDRs").
1.2 Purpose of the Group
EFG Holding Company (Previously EFG Hermes Holding Company) is a premiere financial services corporation that offers diverse investment banking services including securities brokerage, investment banking, asset management and private equity. In addition, the Group also has non-bank finance products, which include leasing and micro-finance, instalment services, factoring, securitization, collection and tasquek. The purpose of the Group also includes participation in the establishment of companies which issue securities or in increasing their share capital, custody activities, margin trading and commercial bank activities.
2 Basis of preparation
Statement of compliance
The consolidated financial statements of the Group have been prepared in accordance with IFRS Accounting Standards and interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under IFRS Accounting Standards. The consolidated financial statements comply with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
Basis of measurement
These consolidated financial statements have been prepared under the historical cost basis, except for the following:
· Financial assets measured at fair value through profit or loss (FVTPL);
· Financial assets at fair value through other comprehensive income (FVOCI);
· Assets held for sale at fair value at the lower of their carrying amount and fair value less costs to sell; and
· Accounts payable - customers credit balance at fair value through profit and loss.
Functional and presentation currency
The Group's consolidated financial statements are presented in Egyptian Pound ("EGP") because the EGP forms the major currency in which the Group transacts and funds its business. The EGP is also the Group's functional currency because it is the most significant currency relevant to the underlying transactions, events and conditions of the Group and its subsidiaries, as well as representing a significant proportion of its funds generated from financing activities.
The Group has decided to present its consolidated statement of financial position in order of liquidity rather than bifurcating its assets and liabilities into a current/ non - current classification, as the banking subsidiary consolidated in these financial statements, which represents majority of the Group's assets and liabilities, was presented in a liquidity order format.
2 Basis of preparation (continued)
Use of estimates and judgements
The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
In applying the Group's accounting policies, IFRS Accounting Standards require management to select suitable accounting policies, apply them consistently and make judgements, estimates and assumptions that are reasonable and prudent and would result in relevant and reliable information. Management, based on guidance in IFRS Accounting Standards and the IASB's framework for the preparation and presentation of financial statements has made these estimates, judgements and assumptions. Listed below are those estimates and judgements which could have the most significant effect on the amounts recognised in the consolidated financial statements.
Estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experiences and other factors, including expectation of future events that may have a financial impact on the Group and considered to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
(a) Going concern
The Group's management has made an assessment of the Group's ability to continue as a going concern and is satisfied that the Group has resources to continue in business for the foreseeable future. In making this assessment, management has considered a wide range of information including projections of profitability, regulatory capital requirements and funding needs. The assessment also includes consideration of reasonably possible downside economic scenarios and their potential impacts on the profitability, capital and liquidity of the Group. In making this assessment, the Group has considered the impact of climate related matters on their going concern assessment.
Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. Therefore, the consolidated financial statements continue to be prepared on going concern basis.
(b) Impairment charge on financial assets
The measurement of impairment losses under IFRS 9 across all categories of financial assets requires assumptions, in particular, in the estimation of the amount and timing of future cash flows and collateral values when determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, changes in which can result in different levels of allowances.
The Group's ECL calculations are outputs of multiple models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. Elements of the ECL models that are considered accounting judgements and estimates include:
· The Group's internal credit grading model, which assigns PDs to the individual grades.
· The Group's criteria for assessing if there has been a significant increase in credit risk and so allowances for financial assets should be measured on a lifetime ECL basis and the qualitative assessment.
· The segmentation of financial assets when their ECL is assessed on a collective basis.
· Development of ECL models, including the various formulas and the choice of inputs.
· Determination of impacts between economic inputs, such as gross domestic product and collateral values etc. on PDs, EADs and LGDs.
· Selection of forward looking macroeconomic scenarios and their probability weightings, to derive the economic inputs into the ECL models.
Group's policy is to regularly review its models in the context of actual loss experience and adjust when necessary.
Impairment losses are evaluated as described in Note 3.16.
2 Basis of preparation (continued)
Use of estimates and judgements (continued)
(c) Impairment charge on property and equipment and investment properties
In determining the net realisable value, the Group uses the selling prices determined by external independent valuer companies, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued. The selling prices are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm's length transaction.
Impairment losses are evaluated as described in Note 3.16.
(d) Valuation of financial instruments
The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the consolidated statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The valuation techniques of financial instruments may require certain unobservable inputs to be estimated by management.
(e) Defined benefit plan
The cost of end of service defined benefit and the present value of the related obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, withdrawal before normal retirement age and mortality rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Additional information on these assumptions is disclosed in Note 20.2.
(f) Financial asset and liability classification
The Group's accounting policies provide scope for the classification and assessment of the business model for financial assets and liabilities to be designated on inception into different accounting categories. The classification criteria are mentioned in policy Note 3.12.
Classification and measurement of financial assets depends on the results of the SPPI and the business model test. The Group determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence including how the performance of the assets is evaluated and their performance measured, the risks that affect the performance of the assets and how these are managed and how the managers of the assets are compensated. The Group monitors financial assets measured at amortised cost or fair value through other comprehensive income that are derecognised prior to their maturity to understand the reason for their disposal and whether the reasons are consistent with the objective of the business for which the asset was held. Monitoring is part of the group's continuous assessment of whether the business model for which the remaining financial assets are held continues to be appropriate and if it is not appropriate whether there has been a change in business model and so a prospective change to the classification of those assets. No such changes were required during the periods presented.
(g) Operating segments
In preparation of the segment information disclosure, management has made certain assumptions to arrive at the segment reporting. These assumptions would be reassessed by management on a periodic basis. Operating segments are detailed in Note 31.
2 Basis of preparation (continued)
Use of estimates and judgements (continued)
(h) Goodwill impairment testing
The Group estimates that reasonably possible changes in the assumptions used for the impairment would not cause the recoverable amount of either CGU to decline below the carrying amount. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its recoverable amount. CGU is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the Group consolidated statement of profit or loss statement. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of other assets in the unit (group or units) on a pro rata basis.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(i) Tax
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. In determining the amount of current and deferred tax, the Group considers the impact of tax exposures, including whether additional taxes and interest maybe due. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities would impact tax expense in the period in which such a determination is made (refer Note 21).
3 Summary of material accounting policies
3.1 New or revised Standards or Interpretations
The Standards and amendments that are effective for the first time in 2025 and could be applicable to the Group are:
Standards and amendments
Effective date
Lack of exchangeability (Amendments to IAS 21)
1 January 2025
These amendments do not have a significant impact on these consolidated financial statements and therefore the disclosures have not been made.
Standards, amendments and Interpretations to existing Standards that are not yet effective and have not been adopted early by the Group.
Other Standards and amendments that are not yet effective and have not been adopted early by the Group include:
Standards and amendments
Effective date
Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)
1 January 2026
Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)
1 January 2026
IFRS 18 'Presentation and Disclosure in Financial Statements'
1 January 2027
IFRS 19 'Subsidiaries without Public Accountability: Disclosures'
1 January 2027
Amendments to IFRS 19 'Subsidiaries without Public Accountability: Disclosures'
1 January 2027
Annual improvements to IFRS Accounting Standards - Volume 11
1 January 2026
Sale or contribution of assets between an investor and its associate or joint venture - Amendments to IFRS 10 and IAS 28
Effective date deferred indefinitely
These Standards and amendments are not expected to have a significant impact on the consolidated financial statements in the period of initial application and therefore no disclosures have been made.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement.
3.2 Basis of consolidation
Business combination
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition comprises of:
· fair values of the assets transferred
· liabilities incurred to the former owners of the acquired business
· equity interests issued by the Group
· fair value of any asset or liability resulting from a contingent consideration arrangement, and
· fair value of any pre-existing equity interest in the subsidiary.
3 Summary of material accounting policies (continued)
3.2 Basis of consolidation (conitinued)
Business combination (continued)
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities in which case those instruments are recognized at fair value, net of transaction costs.
The excess of the consideration transferred, amount of any non-controlling interest in the acquired entity and acquisition-date fair value of any previous equity interest in the acquired entity, over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
3 Summary of material accounting policies (continued)
3.2 Basis of consolidation (continued)
Subsidiaries (continued)
The consolidated financial statements for the year ended 31 December 2025 comprise the financial statements of the Group and those of its following subsidiaries:
Name of subsidiary
Direct ownership %
Indirect ownership %
EFG Hermes International Securities Brokerage
99.87
0.09
EFG Hermes Fund Management
88.51
11.49
Hermes Portfolio and Fund Management
78.81
21.19
Hermes Securities Brokerage
97.58
2.42
Hermes Corporate Finance
100
-
EFG - Hermes Advisory Inc.
100
-
EFG- Hermes Financial Management (Egypt) Ltd.
-
100
EFG - Hermes Promoting & Underwriting
99.88
-
Bayonne Enterprises Ltd.
100
-
EFG- Hermes Fixed Income
99
1
EFG Hermes for Digital solutions
96.3
3.7
EFG- Hermes Private Equity-BVI
-
100
EFG- Hermes UAE LLC.
-
100
Flemming CIIC Holding
100
-
Flemming Mansour Securities
-
99.33
Flemming CIIC Securities
-
96
Flemming CIIC Corporate Finance
-
74.92
EFG- Hermes UAE Ltd.
-
100
EFG- Hermes KSA
-
100
Mena Opportunities Management Limited
-
95
Mena (BVI) Holding Ltd.
-
95
EFG - Hermes Mena Securities Ltd.
-
100
Middle East North Africa Financial Investments W.L.L
-
100
EFG- Hermes Regional Investment Ltd.
-
100
Offset Holding KSC *
-
50
EFG- Hermes IFA Financial Brokerage
-
63.084
IDEAVELOPERS
-
81
EFG- Hermes CB Holding Limited
-
100
EFG- Hermes Global CB Holding Limited
100
-
Mena Long-Term Value Feeder Holdings Ltd. *
-
50
Mena Long-Term Value Master Holdings Ltd. *
-
45
Mena Long-Term Value Management Ltd. *
-
45
EFG - Hermes CL Holding SAL
-
100
EFG-Hermes IB Limited
100
-
EFG Hermes Securitization
100
-
EFG Hermes-Direct Investment Fund
64
-
Tanmeyah Micro Enterprise Services S.A.E
-
100
EFG - Hermes Brokerage Holdings Ltd
100
-
EFG - Hermes USA
100
-
EFG Capital Partners III
-
100
Health Management Company*
-
54.6875
EFG - Hermes Kenya Ltd.
-
100
EFG Finance Holding
99.82
0.18
EFG - Hermes UK Limited
-
100
OLT Investment International Company (B.S.C)
-
100
Frontier Investment Management Partners LTD *
-
50
EFG-Hermes SP limited
-
100
U Consumer Finance
-
67
EFG Corp - Solutions
-
100
Beaufort Asset Managers LTD
-
100
EFG Hermes Bangladesh Limited
-
100
EFG Hermes FI Limited
-
100
EFG Securitization
-
100
3 Summary of material accounting policies (continued)
3.2 Basis of consolidation (continued)
Subsidiaries (continued)
Name of subsidiary
Direct ownership %
Indirect ownership %
EFG International Treasury Management Ltd
-(previously) EFG Hermes PE Holding LLC
100
-
Etkan for Inquiry and Collection and Business Processes
-
100
RX Healthcare Management*
-
54.6875
FIM Partners KSA*
-
50
Egypt Education Fund GP Limited
-
80
EFG Hermes Nigeria Limited
-
100
EFG-Hermes Int. Fin Corp
100
-
FIM Partners UK Ltd*
-
50
EFG Hermes Sukuk
90
10
Beaufort Holding LTD
-
100
Beaufort Management LTD
-
100
Vortex IV GP LTD
-
100
Beaufort SLP Holding
-
100
Beaufort Private Investment Holding LTD
-
100
RX Healthcare Management
-
100
Bank NXT
51
-
EFG VA Holdco Limited
-
100
EFG VA Investco Limited
-
100
Lighthouse Energy GP Limited
-
100
Beaufort SLP II Limited
-
100
Lighthouse Energy GP II
-
100
Beaufort Management Spain
-
100
EFG Singapore PTE LTD
-
100
Elevate Holdco B.V
-(Previously) Fatura Netherlands B.V
-
100
EFG Payment
100
FIM Partners Muscat SPC*
-
50
Noutah for electronic commerce
-
100
VA LTIP Holdco 1 limited
- (Previously) EFG National Holding Limited
-
100
VA LTIP Holdco 2 limited
-(Previously) EFG IB Holdco Limited
-
100
EFG For SME Financing
EFG Finance B.V
-
100
Valu for payments and Digital Solutions
-
100
Paynas BV
-
67
EFG Hermes PE Holdco Ltd
-
67
EFG Hermes IB Holding Ltd
-
100
WM Holdco Limited
-
100
Wolfraam B.V
-
100
* Management has determined that the Group controls these entities even though the Holding Company may own 50% or less of the issued capital of those entities. This is because the Holding Company is exposed and has the right to the variable returns of these entities and is able to use its power over these entities to affect their returns.
4 Summary of material accounting policies (continued)
3.3 Basis of consolidation (continued)
Subsidiaries (continued)
Following are the details of ownership held in subsidiaries at 31 December 2024:
Name of subsidiary
Direct ownership %
Indirect ownership %
EFG Hermes International Securities Brokerage
99.87
0.09
EFG Hermes Fund Management
88.51
11.49
Hermes Portfolio and Fund Management
78.81
21.19
Hermes Securities Brokerage
97.58
2.42
Hermes Corporate Finance
99.42
0.48
EFG - Hermes Advisory Inc.
100.00
-
EFG- Hermes Financial Management (Egypt) Ltd.
-
100
EFG - Hermes Promoting & Underwriting
99.88
-
Bayonne Enterprises Ltd.
100
-
EFG- Hermes Fixed Income
99.00
1
EFG Hermes for Digital solutions -(Previously) EFG- Hermes Private Equity
96.30
3.70
EFG- Hermes Private Equity-BVI
-
100
EFG- Hermes UAE LLC.
100
-
Flemming CIIC Holding
100
-
Flemming Mansour Securities
-
99.33
Flemming CIIC Securities
-
96
Flemming CIIC Corporate Finance
-
74.92
EFG- Hermes UAE Ltd.
100
-
EFG- Hermes Holding - Lebanon
99
-
EFG- Hermes KSA
73.30
26.70
EFG- Hermes Lebanon
99
0.97
Mena Opportunities Management Limited
-
95
Mena (BVI) Holding Ltd.
-
95
EFG - Hermes Mena Securities Ltd.
-
100
Middle East North Africa Financial Investments W.L.L
-
100
EFG- Hermes Regional Investment Ltd.
-
100
Offset Holding KSC *
-
50
EFG- Hermes IFA Financial Brokerage
-
63.08
IDEAVELOPERS
-
81
EFG- Hermes CB Holding Limited
-
100
EFG- Hermes Global CB Holding Limited
100
-
Mena Long-Term Value Feeder Holdings Ltd. *
-
50
Mena Long-Term Value Master Holdings Ltd. *
-
45
Mena Long-Term Value Management Ltd. *
-
45
EFG - Hermes CL Holding SAL
-
100
EFG-Hermes IB Limited
100
-
EFG Hermes Securitization
100
-
EFG Hermes-Direct Investment Fund
64
-
Tanmeyah Micro Enterprise Services S.A.E
-
94.06
EFG - Hermes Brokerage Holdings Ltd
100
-
EFG - Hermes USA
100
-
EFG Capital Partners III
-
100
Health Management Company
-
52.50
EFG - Hermes Kenya Ltd.
-
100
EFG Finance Holding
99.82
0.18
EFG - Hermes UK Limited
-
100
OLT Investment International Company (B.S.C)
99.90
-
Frontier Investment Management Partners LTD *
-
50
EFG-Hermes SP limited
-
100
U Consumer Finance- Valu (previously)
-
94.96
3 Summary of material accounting policies (continued)
3.2 Basis of consolidation (continued)
Subsidiaries (continued)
Name of subsidiary
Direct ownership %
Indirect ownership %
EFG Corp - Solutions
-
100
Beaufort Asset Managers LTD
-
100
EFG Hermes Bangladesh Limited
-
100
EFG Hermes FI Limited
-
100
EFG Securitization
-
100
EFG International Treasury Management Ltd -EFG Hermes PE Holding LLC
100
-
Etkan for Inquiry and Collection and Business Processes
-
100
RX Healthcare Management
-
52.50
FIM Partners KSA *
-
50
Egypt Education Fund GP Limited
-
80
EFG Hermes Nigeria Limited
-
100
EFG-Hermes Int. Fin Corp
100
--
FIM Partners UK Ltd
-
50
EFG Hermes Sukuk
90
10
Beaufort Holding LTD.
-
100
Beaufort Management LTD.
-
100
Vortex IV GP LTD.
-
100
Beaufort SLP Holding
-
100
Beaufort Private Investment Holding LTD.
-
100
Bank NXT-(Previously - Arab Investment Bank)
51
-
EFG VA Holdco Limited
-
100
EFG VA Investco Limited
-
100
Lighthouse Energy GP Limited
-
100
Beaufort SLP II Limited
-
100
Lighthouse Energy GP II
-
100
Beaufort Management Spain
-
100
EFG Singapore PTE LTD
-
100
Fatura Netherlands B.V
-
94.06
Fatura L.L.C
-
94.06
ASASY FOR DIGITAL CONTENT
-
94.06
EFG Payment
-
100
FIM Partners Muscat SPC*
-
50
Noutah for electronic commerce
-
94.06
EFG National Holding Limited-(Previously-VA ESOP Limited)
-
100
EFG RMBV National Investco Limited
-
100
EFG IB Holdco Limited
-
100
EFG IB Investco Limited
-
100
EFG For SME Financing
-
100
Beaufort Managers SLP Limited
-
100
EFG Finance B.V
-
100
Valu for payments and Digital Solutions
-
94.96
Paynas BV
-
94.96
EFG Hermes PE Holdco Ltd
-
100
EFG Hermes IB Holding Ltd.
100
-
3 Summary of material accounting policies (continued)
3.2 Basis of consolidation (continued)
Non-controlling interests (NCI)
NCI are measured at their proportionate share of the acquiree's identifiable net assets at the date of acquisition. Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
Interests in equity-accounted investees
The Group's interests in equity-accounted investees comprise interests in associates and joint ventures. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Group has joint control, where by the Group has rights to the net assets of the arrangement. Rather than rights to its assets and obligations for its liabilities. Interests in associates and the joint venture are accounted for using the equity method. They are initially recognized at cost, which includes transaction costs.
Subsequent to initial recognition, the consolidated financial statements include the Group's share of the profit or loss and OCI of equity accounted investees, until the date on which significant influence or joint control ceases.
Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income and expenses arising from intra-Group transactions, are eliminated. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
3.3 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are recognised in consolidated statement of profit or loss.
However, foreign currency differences arising from the translation of the following items are recognised in OCI:
- A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and
- Qualifying cash flow hedges to the extent that the hedges are effective.
3 Summary of material accounting policies (continued)
3.3 Foreign currency (continued)
Foreign currency transactions (continued)
Exchange differences on a monetary item that is part of a net investment in a foreign operation are recognised in other comprehensive income in consolidated accounts. On disposal of a foreign operation, exchange differences previously recognised in other comprehensive income are reclassified to the income statement as a reclassification adjustment.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated at the exchange rates at the reporting date. The income and expenses of foreign operations are translated at the exchange rates at the dates of the transactions.
Foreign currency differences are recognized in OCI and accumulated in the translation reserve, except to the extent that the translation difference is allocated to NCI
When a foreign operation is disposed off in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
3.4 Discontinued operation
A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group. Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation had been discontinued from the start of the comparative period.
3.5 Revenue
Gain on sale of investments
Gain (loss) resulting from sale of investments are recognized on transaction date and measured by the difference between cost and selling price less selling commission and expenses.
In case of derecognition of investments in associates, the difference between the carrying amount and the sum of both the consideration received and cumulative gain or loss that had been recognized in shareholders' equity is recognized in the consolidated statement of profit or loss.
Dividend income
Dividend income is recognized when declared and the right to receive payment is established.
Custody fee
Custody fees are recognized when the service is provided. Assets held in a fiduciary capacity are not treated as assets of the Group as they are only held in trust where the Group acts as a custodian on customers' behalf. The Group has no liability or obligations towards the customer on these assets held in trust. Accordingly, these assets are not included in these consolidated financial statements.
3 Summary of material accounting policies (continued)
3.5 Revenue (continued)
Interest income and expenses
Interest income and expense for all interest-bearing financial instruments, except for those classified as FVTPL or designated at fair value through profit or loss, are recognized within 'interest income' and 'interest expense' in the consolidated statement of profit or loss using the effective interest method. Interest income and expense are recognized in the consolidated statement of profit or loss using the effective interest method. The 'effective interest rate' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
· the gross carrying amount of the financial asset; or
· the amortized cost of the financial liability.
When calculating the effective interest rate for financial instruments other than credit-impaired assets, the Groups estimate future cash flows considering all contractual terms of the financial instrument, but not expected credit losses.
The calculation of the effective interest rate includes transaction costs and fees and points paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.
Presentation
Interest income and expense presented in the consolidated statement of profit or loss and OCI include:
Interest on financial assets and financial liabilities measured at amortized cost calculated on an effective interest basis; and
Interest on financial investment is measured at FVOCI calculated on an effective interest basis; Interest income and expense on other financial assets and financial liabilities at FVTPL are presented in net income from other financial instruments at FVTPL.
Amortized cost and gross carrying amount
The 'amortized cost' of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured on initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any expected credit loss allowance.
The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any expected credit loss allowance.
For financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
For financial assets that were credit-impaired on initial recognition, interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the asset. The calculation of interest income does not revert to a gross basis, even if the credit risk of the asset improves.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability.
3 Summary of material accounting policies (continued)
3.5 Revenue (continued)
Fee and commission income
Fee and commission income and expense that are integral to the effective interest rate of a financial asset or liability are included in the measurement of the effective interest rate.
Other fee and commission income, including account servicing fees, placement fees and syndication fees, are recognised as the related services are performed.
A contract with a customer that results in a recognised financial instrument in the Group's financial statements may be partially in the scope of IFRS 9 and partially in the scope of IFRS 15. If this is the case, then the Group first applies IFRS 9 to separate and measure the part of the contract that is in the scope of IFRS 9 and then applies IFRS 15 to the residual.
Other fees and commission expenses relates mainly to transaction and service fees, which are expensed in the consolidated statement of profit or loss as the services are received.
Brokerage commission
Brokerage commission resulting from purchase of and sale of securities in favor of clients are recorded upon the execution of the transaction.
Management fee
Management fee is calculated as determined by the management contract of each investment fund and portfolio and recorded on accrual basis.
Incentive fee
Incentive fee is calculated based on certain percentages of the annual return realized by the fund and portfolio, however these incentive fee will not be recognized until revenue realization conditions are satisfied and there is adequate assurance of collection.
Investment property rental income
Rental income from investment property is recognized as revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease. Rental income from other property is recognized as other income.
Revenue from micro-finance services
- Revenue from micro-finance services is recognized based on time proportion taking into consideration the rate of return on asset. Revenue yield is recognized in the consolidated statement of profit or loss using the effective interest method for all financial instruments that carry a yield, the effective interest method is the method of measuring the amortized cost of a financial asset and distributing the revenue over the lifetime of the relevant instrument. The effective interest rate is the rate that discounts estimated future cash receipts during the expected life of the financial instrument to reach the book value of the financial asset.
- When classifying loans to customers as irregular, no income is recognized on its return, and it is recognized in marginal records outside the financial statements and are recognized as revenue in accordance with the cash basis when it is collected.
- The commission income is represented in the value of the difference between the yield of the financing granted micro-enterprises and the accruals of the Group's bank by deducting the services provided directly from the amounts collected from the entrepreneurs.
- The benefits and commissions resulting from the performance of the service are recognized, according to the accrual basis as soon as the service is provided to the client unless those revenues cover more of the financial period are recognized on a time proportion basis.
- The administrative commission of the loan granted to customers is collected on contracting in exchange for the issuance of the loan service and administrative commission revenue are proven in the consolidated statement of profit or loss upon the issuance of the loan to the client.
3 Summary of material accounting policies (continued)
3.5 Revenue (continued)
Revenue from micro-finance services (continued)
- A commission delay in payments of premiums is collected at rates agreed upon within the contracts and are recognized as soon as customers delayed payment on the basis of the extended delay.
Gains from securitization
Gains from securitization is measured as the difference between the fair value of the consideration received or is still due to the Group at the end of securitization process and the carrying amount of the securitization portfolios in the Group's books on the date of the transfer agreement.
3.6 Income tax
Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in OCI.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for:
- Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
- Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.
- Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.
Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale, and the Group has not rebutted this presumption.
Deferred tax assets and liabilities are offset only if certain criteria are met.
3 Summary of material accounting policies (continued)
3.7 Property and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognized in profit or loss. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Reclassification to investment property
When the use of a property changes from owner-occupied to investment property, it is reclassified to investment property
3.8 Projects under construction
Projects under construction are recognized initially at cost, the book value is amended by any impairment concerning the value of these projects. Cost includes all expenditures directly attributable to bringing the asset to a working condition for its intended use. Property and equipment under construction are transferred to property and equipment caption when they are completed and are ready for their intended use.
3.9 Intangible assets and goodwill
Goodwill
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred or is in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.
3 Summary of material accounting policies (continued)
3.9 Intangible assets and goodwill (continued)
Goodwill (continued)
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units ("CGU") that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
Research and development
Expenditure on research activities is recognized in profit or loss as incurred.
Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset.
Otherwise, it is recognized in profit or loss as incurred.
Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.
Other intangible assets
Other intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses.
3.10 Investment property
Investment properties are measured initially at cost, including transaction costs. Transaction costs include transfer taxes, professional fees for legal services and (only in case of investment property held under a lease) initial leasing commissions to bring the properties to the condition necessary for them to be capable of operating.
Subsequent to initial recognition investment property is measured at cost less accumulated depreciation and impairment loss, if any. Investment property is depreciated on a straight-line basis over its useful life. The estimated useful life of investment property is 33 years.
3.11 Assets held for sale
Non-current assets, or disposal Groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal Groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal Group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Group's accounting policies. Impairment losses on initial classification as held-for-sale or held-for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.
3 Summary of material accounting policies (continued)
3.11 Assets held for sale (continued)
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.
3.12 Financial instruments
Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI - debt investment; FVOCI - equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an instrument‑by‑instrument basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
3 Summary of material accounting policies (continued)
3.12 Financial instruments (continued)
Classification and subsequent measurement (continued)
Financial assets (continued)
Financial assets - Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:
- The stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management's strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
- How the performance of the portfolio is evaluated and reported to the Group's management;
- The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
- How managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
- The frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group's continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:
- Contingent events that would change the amount or timing of cash flows;
- Terms that may adjust the contractual coupon rate, including variable rate‑ features;
- Prepayment and extension features; and
- Terms that limit the Group's claim to cash flows from specified assets (e.g. non‑recourse features)
3 Summary of material accounting policies (continued)
3.12 Financial instruments (continued)
Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest (continued)
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
Financial assets - Subsequent measurement and gains and losses
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortized cost
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.
Financial liabilities - Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held‑for‑trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
3 Summary of material accounting policies (continued)
3.12 Financial instruments (continued)
Derecognition (continued)
Financial assets (continued)
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
The Group enters transactions whereby it transfers assets recognised in its statement of financial position but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non‑cash assets transferred or liabilities assumed) is recognised in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
3.13 Fair value measurement
The fair value of financial instruments are determined based on the market value of the financial instrument or similar financial instruments at the date of the financial statements without deducting any estimated future selling costs.
3.14 Share capital
Ordinary shares
Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity. Income tax relating to transaction costs of an equity transaction are accounted for in accordance with IAS 12.
Repurchase and reissue of ordinary shares (treasury shares)
When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
3.15 Legal reserve
The Group's statutes provide for deduction of a sum equal to 5% of the annual net profit for formation of the legal reserve. Such deduction will be ceased when the total reserve reaches an amount equal to half of the Group's issued capital and when the reserve falls below this limit, it shall be necessary to resume.
3 Summary of material accounting policies (continued)
3.16 Impairment
Non-derivative financial assets
Financial instruments and contract assets
The Group recognizes loss allowances for Expected Credit Loss (ECLs) on:
- Financial assets measured at amortized cost;
- Debt investments measured at FVOCI;
- Contract assets.
The Group also recognizes loss allowances for ECLs on loans receivables.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12‑month ECLs:
- Debt securities that are determined to have low credit risk at the reporting date; and
- Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical experience and informed credit assessment, that includes forward‑looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. unless it can be rebutted.
The Group considers a financial asset to be in default when:
- The debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or
- The financial asset is more than 90 days past due unless it can be rebutted.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12‑month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
Measurement of ECLs
ECLs are an unbiased probability‑weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e., the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
3 Summary of material accounting policies (continued)
3.16 Impairment (continued)
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit‑impaired. A financial asset is 'credit‑impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit‑impaired includes the following observable data:
- Significant financial difficulty of the debtor;
- A breach of contract such as a default or being more than 90 days past due;
- The restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
- It is probable that the debtor will enter bankruptcy or other financial reorganisation; or
- The disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For individual customers, the Group has a policy of writing off the gross carrying amount when the financial asset is 180 days past due based on historical experience of recoveries of similar assets. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write‑off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group's procedures for recovery of amounts due.
Non-financial assets
- At each reporting date, the Group reviews the carrying amounts of its non‑financial assets (other than, investment property, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. Goodwill is tested annually for impairment.
- For impairment testing, assets are Grouped together into the smallest Group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or Groups of CGUs that are expected to benefit from the synergies of the combination.
- The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre‑tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
- An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
3 Summary of material accounting policies (continued)
3.16 Impairment (continued)
Non-financial assets (continued)
- Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.
- An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.17 Investments at fair value through profit or loss
These are securities that the Group acquire principally for the purpose of selling in the near term or holding as a part of portfolio that is managed together for short term profit or position taking. These assets are initially recognised at fair value and subsequently also measure at fair value in the consolidated statement of financial position. All changes in fair values are recognised as part of profit or loss.
3.18 Investments at fair value through other comprehensive income
Financial assets managed within a business model that is achieved by both collecting contractual cash flows and selling and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest are measured at FVOCI.
These comprise primarily debt securities. They are recognised on the trade date when the group enters into contractual arrangements to purchase and are generally derecognised when they are either sold or redeemed.
Investments in equity instruments at FVOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the investment revaluation reserve. The cumulative gain or loss will not be reclassified to profit or loss on disposal
of the investments.
Investments in debt instruments at FVOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the investment revaluation reserve. The cumulative gain or loss will be reclassified to profit or loss on disposal of the investments.
3.19 Financial instruments measured at amortised cost
Financial assets that are held to collect the contractual cash flows and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest are measured at amortised cost. Such financial assets include most loans and advances to banks and customers and some debt securities. In addition, most financial liabilities are measured at amortised cost. The group accounts for regular way amortised cost financial instruments using trade date accounting. The carrying value of these financial assets at initial recognition includes any directly attributable transactions costs.
3.20 Provisions
Provisions are recognized when the Group has a legal or constructive current obligation as a result of a past event and it is probable that a flow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and, where appropriate, the risks specific to the liability. Provisions are reviewed at the financial position date and amended (when necessary) to represent the best current estimate.
3 Summary of material accounting policies (continued)
3.21 Trade, and notes receivables, debtors and other debit balances
Trade, notes receivables, debtors and other debit balances are stated at nominal value less impairment losses.
The Group's lessees and the leased assets are regularly classified & evaluated, and their obligations are reduced by the rent value paid in each financial period, and with the assurance of the availability of adequate guarantee to collect the client's rent values.
3.22 Cash and cash equivalents
For the purpose of preparing the statement of cash flows, cash and cash equivalents include the balances, whose maturity do not exceed three months from the date of acquisition, cash on hand, cheques under collection and due from banks and financial institutions.
3.23 Profit sharing to employees
The Holding Company pays 10% of its dividends as profit sharing to its employees provided that it will not exceed total employees' annual salaries and directly charged on the consolidated statement of profit or loss as per IFRS accounting standards.
3.24 Employees benefits
Share based payments
Equity settled transactions
For equity-settled share-based payment transactions, the Group measures the services received, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. The fair value of those equity instruments is measured at grant date.
Vesting conditions, other than market conditions, are taken into account by adjusting the number of equity instruments included in the measurement of the transaction amount so that, ultimately, the amount recognized for services received as consideration for the equity instruments granted are based on the number of equity instruments that eventually vest. Hence, on a cumulative basis, no amount is recognized for services received if the equity instruments granted do not vest because of failure to satisfy a vesting condition.
The Group recognizes an amount for the services received during the vesting period based on the best available estimate of the number of equity instruments expected to vest and revise that estimate, if necessary, if subsequent information indicates that the number of equity instruments expected to vest differs from previous estimates. On vesting date, the entity shall revise the estimate to equal the number of equity instruments that ultimately vested.
3.25 Micro-enterprises receivables
Credit policy
Funding Consideration
- Funding is granted to clients who have previous experience not less than one year in their current activity which is confirmed by the clients with adequate documentation and field inquiry.
- Funding is granted to the clients and instalments are suitable to their predictable which it's instalment is suitable according to his predictable income activity and this is done through analyzing clients' revenues and expenses and their foreseeable marginal income, and this is done by the specialists of the Group on the prepared form for this purpose (financial study form and credit decision).
- Before grant funding, a client activity field inquiry is done.
- Recording inquiries results about client and guarantor with inquiring forms of the Group which reveal client's activity (visit form & Inquiry form).
3 Summary of material accounting policies (continued)
3.25 Micro-enterprises receivables(continued)
Credit policy (continued)
- The Group prohibit grant funding for new client unless the activity is existing with previous one year experience where the granted funds are within a minimum 1,000 EGP and maximum
30,000 EGP with loan duration of 12 months.
- Inquiries for clients are performed by I-Score Group before granting and in case of approval on granting. The credit limit of the client is considered when calculating the client's revenue and expenses.
Client's Life Insurance
The insurance process on the client is performed with the authorized companies from insurance supervisory authority.
Impairment loss of micro financed loans
The Group at the date of the financial statements estimates the impairment loss of micro financed loans, in the light of the basis and rules of granting credit and forming the provisions according to the Board of Directors decision of the Financial Supervisory Authority No. (173) issued on December 21, 2014, to deal with the impairment loss.
The accounting policies relating to micro-enterprises receivables are detailed under note 3.11.
3.26 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand‑alone prices. However, for the leases of property the Group has elected not to separate non‑lease components and account for the lease and non‑lease components as a single lease component.
The Group recognizes a right‑of‑use asset and a lease liability at the lease commencement date. The right‑of‑use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right of use asset is subsequently depreciated using the straight line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
3 Summary of material accounting policies (continued)
3.26 Leases (continued)
As a lessee (continued)
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in‑substance fixed payments; variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; amounts expected to be payable under a residual value guarantee; and the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension, or termination option or if there is a revised in‑substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right‑of‑use asset or is recorded in profit or loss if the carrying amount of the right‑of‑use asset has been reduced to zero.
The Group presents right‑of‑use assets that do not meet the definition of investment property in 'property, plant and equipment' and lease liabilities in 'loans and borrowings' in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognize right‑of‑use assets and lease liabilities for leases of low - value assets and short‑term leases, including IT equipment. The Group recognizes the lease payments associated with these leases as an expense on a straight‑line basis over the lease term.
As a lessor
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand- alone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for a major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.
3 Summary of material accounting policies (continued)
3.26 Leases (continued)
As a lessor (continued)
If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.
The Group applies the derecognition and impairment requirements of IFRS 9 to the net investment in the lease. The Group further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight- line basis over the lease term as part of 'other revenue'.
Sale and leaseback transactions are tested under IFRS 15 at the date of the transaction, and if the transaction qualifies as a sale, the underlying asset is derecognised and a right-of-use asset with a corresponding liability is recognised equal to the retained interest in the asset. Any gain or loss is recognised immediately in the consolidated income statement for the interest in the asset transferred to the lessor. If the transaction does not qualify as a sale under IFRS 15, a financial liability equal to the sale value is recognised in the consolidated financial statements
3.27 Operating segment
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment) or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. The Group's primary format for segment reporting is based on business segment.
3.28 Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
4 Significant management judgements and estimates
The preparation of the financial statements in conformity with IFRS Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about significant areas of estimation and uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are described below:
Impairment charge on financial assets
Impairment losses are evaluated as described in Note 3.16.
The measurement of impairment losses under IFRS 9 across all categories of financial assets requires judgement, in particular, the estimation of the amount and timing of future cash flows and collateral values when determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, changes in which can result in different levels of allowances. The Group's ECL calculations are outputs of complex models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. Elements of the ECL models that are considered accounting judgements and estimates include:
· The Group's internal credit grading model, which assigns PDs to the individual grades
· The Group's criteria for assessing if there has been a significant increase in credit risk and so allowances for financial assets should be measured on a lifetime ECL basis and the qualitative assessment
· The segmentation of financial assets when their ECL is assessed on a collective basis
· Development of ECL models, including the various formulas and the choice of inputs
· Determination of associations between macroeconomic scenarios and, economic inputs, such as unemployment levels, GDP and inflation rate and the effect on PDs, EADs and LGDs
· Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs into the ECL models It is the Group's policy to regularly review its models in the context of actual loss experience and adjust when necessary.
Fair value measurement
The Group's determination of fair value hierarchy of financial instruments is discussed in note 36.
The value of financial assets is determined by the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
· In the absence of an active market to determine the fair value of financial instruments, the fair value is estimated using various valuation techniques, taking into consideration the prices of the transactions occurred recently, and guided by the current fair value of other similar tools substantially - discounted cash flow method - or any other evaluation method to get resulting values that can rely on.
4 Significant management judgements and estimates (continued)
Fair value measurement (continued)
· When using the discounted cash flow method to evaluate, the future cash flows are estimated based on the best estimates of management. The discount rate used is determined in the light of the prevailing market price at the date of the consolidated financial statements that are similar in nature and conditions.
The fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Group determines fair values using other valuation techniques.
For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.
Valuation of financial instruments
The valuation techniques of financial instruments may require certain unobservable inputs to be estimated by the management. These are discussed in detail in Note 35.
The Group measures fair values using the fair value hierarchy outlined in Note 35, which reflects the significance of the inputs used in making the measurements. The Group has an established control framework with respect to the measurement of fair values.
This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including level 3 fair values, and reports directly to the CFO. The valuation team regularly reviews significant unobservable inputs and valuation adjustments.
The Group recognizes transfers between levels of the fair value hierarchy at the end of reporting period during which the change has occurred. Valuation techniques include net present value and discounted cash flow models, comparison with similar instruments for which market observable prices exist.
Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other premia used in estimating discount rates, bond and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.
The Group uses widely recognized valuation models for determining the fair value of common and more simple financial instruments, like interest rate and currency swaps that use only observable market data and require little management judgment and estimation. Observable prices or model inputs are usually available in the market for listed debt and equity securities, exchange-traded derivatives and simple over the counter derivatives such as interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgment and estimation and also reduces the uncertainty associated with determining fair values.
Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets.
The Group does not hold any derivatives at the year-end.
4 Significant management judgements and estimates (continued)
Determination of preliminary values of assets and liabilities acquired in business combinations
While the Group uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Group records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, pre-acquisition contingencies, and contingent consideration, where applicable. Although the Company believes the assumptions and estimates it has made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets acquired include; future expected cash flows, estimated market royalty rates, customer attrition rates, cost of developed technology and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
5 Cash and deposits
31 December 2025
31 December 2024
Cash on hand
290,255
254,489
Cheques under collection
8,940
115
Banks - current accounts
24,359,814
20,795,151
Banks - time deposits
12,368,336
21,808,653
Balance
37,027,345
42,858,408
Allowance for expected credit losses
(7,692)
(11,051)
Total cash and time deposits (note 5.3)
37,019,653
42,847,357
5.1 Obligatory reserve balance with Central Bank of Egypt (CBE) amounted to EGP Thousand 9,747,374 as 31 December 2025 (2024: 8,693,380) and relates to balances with the CBE within the statutory reserve ratio. These deposits are subject to regulatory restrictions and are therefore not available for general use and not available for use in the Group's day-to-day operations. Accordingly, it is not included in cash and cash equivalents.
5.2 For the purposes of presenting the consolidated statement of cash flows, cash and cash equivalents include balances whose maturity dates do not exceed three months from the date of placement.
5.3 The above figures reconcile to the amount of cash and cash equivalents shown in the consolidated statement of cash flows at the end of the financial year as follows:
31 December 2025
31 December 2024
Cash and time deposits as above
37,019,653
42,847,357
Allowance for expected credit losses
7,692
11,051
Time deposits maturing in more than 90 days
(881,035)
(54,245)
Bank overdraft
(20,916,540)
(19,297,065)
Treasury bills maturing in less than 90 days from date of purchase
940,480
1,034,878
Cash and cash equivalents
16,170,250
24,541,976
6 Investments at fair value through profit or loss
31 December 2025
31 December 2024
Mutual fund certificates
12,322,103
12,031,837
Equity securities
92,504
179,333
Debt securities
6,184,413
3,376,038
Treasury bills
1,819,431
-
Structured notes
13,987,720
7,901,466
34,406,171
23,488,674
31 December 2025
31 December 2024
Listed
6,234,686
3,512,743
Unlisted
28,171,485
19,975,931
34,406,171
23,488,674
Amounts recognized in profit or loss
Net change in the fair value of investments at FVPL as at 31 December 2025 amounted to EGP Thousands 762,731 (year ended 31 December 2024: EGP Thousands 2,844,098) being EGP Thousands 762,731 (31 December 2024: EGP Thousands 2,855,028) gains and no losses (31 December 2024: EGP Thousands 10,930). Those are recognized under changes in the fair value of the investment at fair value through profit and loss in the consolidated statement of profit or loss.
7 Accounts receivable
31 December 2025
31 December 2024
Accounts receivable
16,655,456
15,260,511
Other brokerage companies
1,441,209
1,001,976
18,096,665
16,262,487
Allowance for expected credit losses*
(423,713)
(489,105)
17,672,952
15,773,382
31 December 2025
31 December 2024
Balance at the beginning of the year
489,105
459,251
Impairment during the year
(14,803)
(49,764)
Write off during the year
(37,189)
(1,920)
Effect of foreign currency translation
(13,400)
81,538
Balance at the end of the year
423,713
489,105
*Allowance for expected credit losses
8 Loans and advances to customers
31 December 2025
31 December 2024
Banking loans and facilities (Bank NXT) (8.1)
48,315,986
30,093,577
Other loans and advances to customers (8.2)
29,812,038
27,835,026
78,128,024
57,928,603
8 Loans and advances to customers (continued)
8.1 Banking loans and facilities (Bank NXT)
31 December 2025
31 December 2024
Retail
Overdraft
48,737
62,409
Credit cards
1,029,995
392,631
Personal loans
13,763,361
8,061,791
Mortgage loans
3,085,375
1,804,463
17,927,468
10,321,294
Corporate loans including small loans for economic activities
Debit current accounts
1,274,568
267,268
Direct loans
25,304,128
16,141,445
Syndicated loans
6,821,061
5,782,660
33,399,757
22,191,373
Gross loans and facilities to customers
51,327,225
32,512,667
Less:
Allowance for expected credit losses*
(2,304,220)
(2,246,959)
Suspended interest
(643)
(643)
Interest payable
(706,376)
(171,488)
(3,011,239)
(2,419,090)
Banking loans and facilities (Bank NXT) - net
48,315,986
30,093,577
31 December 2025
31 December 2024
*Allowance for expected credit losses
Balance at the beginning of the year
2,246,959
1,622,463
Impairment during the year
300,730
303,774
Write off during the year
(231,438)
(196,095)
Recoveries
35,556
169,258
Effect of foreign currency translation
(47,587)
347,559
Balance at the end of the year
2,304,220
2,246,959
8.2 Other loans and advances to customers
31 December 2025
31 December 2024
Micro finance
6,063,580
6,511,264
Finance lease
8,476,718
14,419,802
Consumer finance
13,985,674
11,115,123
Factoring
5,839,134
4,619,596
SME lending
226,789
39,462
Other loans
2,582,842
2,599,774
Unearned interest
(6,658,732)
(10,711,693)
Balance
30,516,005
28,593,328
*Allowance for expected credit losses
(703,967)
(758,302)
29,812,038
27,835,026
31 December 2025
31 December 2024
*Allowance for expected credit losses
Balance at the beginning of the year
758,302
507,116
Impairment during the year
552,933
379,249
Write off during the year
(607,268)
(151,961)
Recoveries
-
-
Effect of foreign currency translation
-
23,898
Balance at the end of the year
703,967
758,302
9 Investments at fair value through OCI
31 December 2025
31 December 2024
Equity securities
1,205,839
301,995
Mutual fund certificates
137,412
301,572
Debt instruments
19,415,231
11,770,651
20,758,482
12,374,218
31 December 2025
31 December 2024
Listed
8,155,467
4,222,540
Unlisted
12,603,015
8,151,678
20,758,482
12,374,218
Financial assets at fair value through other comprehensive income (FVOCI) comprise:
- Equity securities and mutual funds certificates not held for trading and which the Group has irrevocably elected at initial recognition to recognise in this category. These are strategic investments, and the Group considers this classification to be more relevant.
- Debt securities where the contractual cash flows are solely principal, and interest and the objective of the Group's business model is achieved both by collecting contractual cash flows and selling financial assets.
10 Equity accounted investees
31 December 2025
Location
Assets
Liabilities
Net gain (losses)
Gross profit (losses)
Ownership %
Value
Interest in Joint Ventures
Bedaya Mortgage Finance Co
Egypt
1,282,320
835,856
143,423
213,547
33.34
157,454
EFG-EV Fintech
Egypt
54,127
807
(1,420)
311
50
29,245
Interest in Associates
Kaf Life Insurance takaful
Egypt
1,538,793
467,882
(43,855)
(44,244)
37.5
161,458
Prime for investment fund management *
Egypt
2,845
79
(259)
(540)
20
553
Falcon Partners GP Limited
UAE
18,965
22,772
(4,619)
--
25
--
Total
348,710
10 Equity accounted investees (continued)
31 December 2024
Location
Assets
Liabilities
Net gain (losses)
Gross profit (losses)
Ownership %
Value
Interest in Joint Ventures
Bedaya Mortgage Finance Co
Egypt
2,636,704
2,381,476
3,550
43,861
33.34
90,478
EFG-EV Fintech
Egypt
34,991
1,140
(712)
1,213
50
19,511
Interest in Associates
Kaf Life Insurance takaful
Egypt
511,682
332,023
7,830
38,904
37.5
115,655
Zahraa Elmaadi Company *
Egypt
2,668,051
798,153
343,780
451,075
20.33
380,225
Prime for investment fund management *
Egypt
3,042
209
534
354
20
503
Paytech 3100 BV
Netherlands
486,877
1,404
(563)
-
40.66
197,860
Falcon Partners GP Limited
UAE
2,195
1,435
(1,585)
-
25
635
Total
804,867
* Equity accounted investees acquired through Bank NXT.
- During the year, The Group sold its shareholding in Zahraa El Maadi Company, realizing a gain on sale amounting to EGP thousand 270,261.
- As part of the restructuring of U Consumer Finance, and based on the Board of Directors' resolution dated 18 March 2025, EFG Finance Holding and U Consumer Finance (subsidiaries) sold their direct shareholding in Paytech 3100 B.V. The transaction was executed at carrying amount.
11 Investments at amortized cost
31 December 2025
31 December 2024
Debt instruments - Listed
11,853,420
7,051,166
Debt instruments - Un-listed
5,623,977
5,499,413
17,477,397
12,550,579
Allowance for expected credit losses*
(73,331)
(63,034)
Total
17,404,066
12,487,545
12 Investment properties
31 December 2025
31 December 2024
Cost
As at 1 January
145,437
149,337
Disposal for the year
-
(3,900)
As at 31 December
145,437
145,437
Accumulated deprecations
As at 1 January
55,154
50,636
Disposal for the year
-
(1,185)
Depreciation charge for the year (Note 30.2)
5,602
5,703
As at 31 December
60,756
55,154
Net carrying amount as at 31 December
84,681
90,283
Investment property net carrying amounted to EGP Thousands 84,681 as of 31 December 2025, representing the following: -
-EGP Thousands 82,462 the book value of the area owned by EFG Holding Company in Nile City building, and with a fair value of EGP Thousands 796,080.
-EGP Thousands 2,219 the book value of the area owned by Hermes Securities Brokerage, one of the subsidiaries, in Elharam branch and with a fair value of EGP Thousands 24,322.
13 Property and equipment
14.1 Movement of goodwill and other intangible assets during the year is as follows:
2024
Goodwill
Customer relationships
Retailer list
Licenses
Brand name
Software
Total
Balance as at 1 January as previously reported
1,704,024
346,387
41,651
14,029
34,704
174,818
2,315,613
Adjustment
(147,152)
17,823
-
-
-
132,439
3,110
Balance as at 1 January
1,556,872
364,210
41,651
14,029
34,704
307,257
2,318,723
Additions
-
-
-
-
-
295,505
295,505
Disposals
-
-
-
(652)
-
(1,595)
(2,247)
Amortisation during the year
-
(81,399)
(7,689)
(3,642)
-
(86,885)
(179,615)
Disposals
-
-
-
652
-
935
1,587
Foreign currency translation differences
-
37,666
-
9,701
-
9,600
56,967
Balances as at 31 December
1,556,872
320,477
33,962
20,088
34,704
524,817
2,490,920
2025
Balance as at 1 January
1,556,872
320,477
33,962
20,088
34,704
524,817
2,490,920
Additions
-
-
-
-
-
333,712
333,712
Disposals
(373,698)
(218,240)
(32,039)
-
(34,704)
(55,274)
(713,955)
Amortisation during the year (Note 30.2)
-
(44,236)
(1,923)
(3,966)
-
(161,814)
(211,939)
Adjustment
-
-
-
-
-
9,369
9,369
Foreign currency translation differences
-
(3,710)
-
(1,084)
-
(12)
(4,806)
Balance as at 31 December
1,183,174
54,291
-
15,038
-
650,798
1,903,301
14.2 Goodwill relates to the acquisitions of the below subsidiaries:
31 December 2025
31 December 2024
EFG- Hermes IFA Financial Brokerage Company Kuwait -KSC
179,148
179,148
Tanmeyah Micro Enterprise Services S.A.E
365,399
365,399
Frontier Investment Management Partners LTD
325,801
325,801
Fatura LLC
--
373,698
Paynas BV
312,826
312,826
1,183,174
1,556,872
· During the year, EFG Finance B.V. (a subsidiary) entered into a Share Swap Agreement with MaxAB-Wasoko, a leading e-commerce and supply chain platform, whereby the Group transferred its ownership in Fatura (a subsidiary), a B2B e-commerce marketplace in Egypt, in addition to a cash payment of USD 5 million, in exchange for a 6.32% equity stake in MaxAB-Wasoko.
14 Goodwill and other intangible assets (continued)
14.2.1 Goodwill - Test for impairment
The Group assesses goodwill for impairment at least annually. This involves estimating the recoverable amount of the relevant subsidiaries, being the cash-generating units (CGUs). As of the reporting date, the estimated recoverable amounts of the CGUs exceeded their respective carrying values.
The recoverable amounts were determined using the value-in-use approach, applying the Discounted Cash Flow (DCF) method. Cash flow projections were based on a five-year business plan approved by management. The key assumptions used reflect management's expectations of market and industry trends and are supported by historical data sourced from both internal and external sources.
Discount rates were derived from observable market benchmarks, including government bond yields, equity risk premiums, and industry-specific beta factors. Terminal growth rates were aligned with long-term macroeconomic forecasts, including those published by the International Monetary Fund (IMF). A capital structure assumption of 100% equity was applied across all valuations.
In certain cases, the Dividend Discount Model (DDM) was applied where appropriate, using the same valuation principles.
Hence, the Weighted Average Cost of Capital (WACC) was computed using growth rates ranging from 2% to 5%, while the Equity Risk Premium ranged from 4% to 7%, resulting in WACC rates between 8% and 29%, depending on the entity being assessed and subject to market and country conditions.
The Group has performed an analysis by varying these input factors by a reasonably possible margin and assessing whether the change in input factors result in any of the goodwill allocated to appropriate cash generating units being impaired. Based on the above analysis, management has not recognized an impairment for the year ended 31 December 2025 in relation to goodwill.
15 Other assets
31 December 2025
31 December 2024
Deposits with others (Note 15.1)
292,628
382,767
Down payments to suppliers
182,737
166,987
Prepaid expenses
686,511
486,118
Employees' advances
244,930
218,347
Accrued revenues (Note 15.2)
3,820,979
2,470,694
Taxes withheld by others
60,660
74,310
Payments for investments
348,771
5
Settlement guarantee fund
536,446
38,536
Due from Egypt Gulf Bank- Tanmeyah clients
29,622
15,133
Receivables-sale of investments
109,130
1,364
Due from custodian
63,204
63,593
Due from payment channels
155,873
127,492
Securitizationsurplus
678,763
491,978
Sundry debtors
428,796
398,039
Assets acquired as settlement of debts (Note 15.3)
448,910
442,567
Advance Payments for the Acquisition of PPE and Intangible Assets (Note 15.4)
994,026
1,281,857
Total
9,081,986
6,659,787
Deduct: Allowance for expected credit losses
(118,609)
(76,451)
Balance
8,963,377
6,583,336
15.1 Deposits with others
- Deposits with others include an amount of EGP Thousands 21,507 in the name of the subsidiaries, EFG-Hermes International Securities Brokerage and Hermes Securities Brokerage Company which represent blocked deposits for same day trading operations settlements which take place in the Egyptian Stock Exchange. Both companies are not entitled to use these amounts without prior approval from Misr Clearance Company.
- Deposits with others include an amount of EGP Thousands 168,762 in the name of the subsidiary, EFG- Hermes KSA. This represents margin deposited with the General Clearing Member (GCM) as required by the Clearing House (Muqassa).
15.2 Accrued Revenue
- Accrued revenues includes management fees and interest accrued on Loans and advances to banks, Loans and advances to customers and investment.
15.3 Assets acquired as settlement of debts
- Assets acquired presented in other assets that have been acquired by Bank NXT in exchange for debt account receivables and the assets acquired are mainly land and buildings.
15.4 Advance Payments for the Acquisition of PPE and Intangible Assets
- Down payments to suppliers mainly related to subsidiaries, Bank NXT, EFG Hermes KSA and U Consumer Finance
16 Due to banks and financial institutions
31 December 2025
31 December 2024
Financial institutions
10,771,170
2,923,742
Bank overdraft *
20,916,540
19,297,065
Deposits**
2,645,342
10,577
Due to Central Bank**
3,212
--
Current account**
250,327
531,532
34,586,591
22,762,916
* Bank overdraft comprise facilities granted by the banks which include a pledged governmental bond contract to secure a credit facility amounting to EGP Thousands 1,066,264 as of 31 December, 2025.
** Relate to Bank NXT.
17 Customer Deposits (Bank NXT)
31 December 2025
31 December 2024
Call deposits
39,536,889
27,739,336
Term deposits
16,194,881
28,332,022
Saving and deposit certificates
22,639,765
10,074,913
Other deposits
950,500
1,062,314
Balance
79,322,035
67,208,585
Corporate deposits
44,860,335
45,754,381
Retail
34,461,700
21,454,204
Balance
79,322,035
67,208,585
18 Accounts payable - customers credit balance at fair value through profit and loss
This amount represents payable to customers against the structured notes issued by one of the Group companies. These financial liabilities are linked to assets/structured notes, where assets have been purchased on behalf of customers and accordingly a liability equivalent to the fair value of the assets is resided in this entity. These structured notes are linked mainly to treasury bills and quoted equity securities.
18.1 Accounts payable - customers credit balance
Accounts payable balances are mainly represented in the advances made by clients to buy shares in the activity of brokerage. Coupons collected and proceeds from the sale of shares for the benefit of clients are also being added to these accounts.
19 Issued bonds
The details of the EGP Thousand 3,909,625 issued bonds are as follows:
Issuer
Series
Issuance date
Maturity date
Face value
Type
EFG Corp Solutions
1st Program 2nd Issuance
October 2024
October 2029
360,000
Tradeable - Non-Convertible
EFG Corp Solutions
2nd Issuance
May 2025
June 2026
2,650,000
Tradeable - Non-Convertible
Hermes Securities Brokerage
3rd Program 1st Issuance
May 2025
May 2026
900,000
Tradeable - Non-Convertible
3,910,000
20 Creditors and other credit balances
31 December 2025
31 December 2024
Accrued expenses
6,267,250
8,010,373
Dividends payable (prior years)
5,993
154,092
Deferred revenues
93,477
145,647
Suppliers
1,119,338
725,083
Clients' coupons - custody activity
258,114
204,017
Tax authority
248,507
135,312
Social Insurance Association
18,770
16,981
Payables- purchase of investments
109,023
-
Medical takaful insurance tax
59,581
51,462
Deposits due to others -finance lease contracts
10,296
10,296
Pre-collected instalments
753,562
601,304
Sundry creditors
461,558
425,972
Lease liabilities (20.1)
1,314,765
560,583
Employees' benefits obligations (20.2)
120,873
89,516
Balance
10,841,107
11,130,638
20.1 Lease Liabilities
31 December 2025
31 December 2024
Balance at the beginning of the year
560,583
419,140
Additions
942,790
246,312
Disposals
(2,041)
(9,481)
Accretion of interest
197,603
70,179
Paid during the year
(369,592)
(245,847)
Effect of foreign currency translation
(14,578)
80,280
Balance at the end of the year
1,314,765
560,583
20 Creditors and other credit balances (continued)
20.2 Employees' benefits obligations
A- Movements in the net liabilities recognized in the consolidated statement of financial position and their components are as follows:
31 December 2025
31 December 2024
Balance at the beginning of the year
89,516
68,459
Charge for the year
17,724
15,477
Actuarial (loss)/gain on re-measurement of employees' benefit obligations
21,483
(2,178)
Paid during the year
(105)
(37,828)
Foreign currency translation difference
(5,855)
45,586
Transferred to related parties
(1,890)
-
Balance at the end of the year
120,873
89,516
B- Amounts recognized included in consolidated statement of profit or loss:
31 December 2025
31 December 2024
Current service cost
12,365
10,623
Interests on defined benefit obligation
5,359
4,854
Balance
17,724
15,477
C- The significant assumptions used in determining end-of-service benefit obligations for the Group's plans are shown below:
As at 31 December 2025
As at 31 December 2024
Discount rate
5.31%
6.25%
Future salary increase rate
5.00%
5.00%
D- A quantitative sensitivity analysis for significant assumptions on the defined benefit obligation are shown below:
As at 31 December 2025
As at 31 December 2024
Increase
Decrease
Increase
Decrease
(1%)
(1%)
(1%)
(1%)
Discount rate
108,110
136,123
82,030
98,796
Future salary increase rate
135,498
108,378
98,521
82,128
The sensitivity analysis above has been determined based on a method that extrapolates the impact on the defined employees' benefits obligation as a result of reasonable changes in key assumptions occurring at the end of reporting period.
21 Deferred tax assets/(liabilities)
31 December
2025
Balance as at 1 January
Recognized in profit or loss *
Recognized in equity
Disposals
Foreign currency differences
Net
Deferred tax assets
Deferred tax liabilities
Fixed assets depreciation
(203,745)
(16,575)
-
(875)
(54)
(221,249)
-
(221,249)
Claims provision
65,519
5,070
-
-
(3)
70,586
70,586
-
Impairment loss on assets
2,267
321
-
-
(43)
2,545
2,545
-
Prior year losses carried forward
151,392
(96,758)
-
-
(133)
54,501
54,501
-
Investment at fair value
(1,504,043)
861,709
(2,037)
-
-
(644,371)
-
(644,371)
Foreign currency translation differences
(336,807)
403,627
-
-
-
66,820
66,820
-
Revaluation of investment property
1,867
--
-
-
-
1,867
1,867
-
Investment in associates
(10,743)
10,709
-
-
-
(34)
-
(34)
ESOP deferred
12,867
(2,421)
-
-
-
10,446
10,446
-
Securitization surplus Revaluation
(28,346)
82
-
-
-
(28,264)
-
(28,264)
(1,849,772)
1,165,764
(2,037)
(875)
(233)
(687,153)
206,765
(893,918)
31 December
2024
Balance as at 1 January
Recognized in profit or loss * (note 30)
Recognised in equity
Foreign currency differences
Net
Deferred tax assets
Deferred tax liabilities
Fixed assets depreciation
(145,513)
(58,802)
-
570
(203,745)
-
(203,745)
Claims provision
40,997
23,915
-
607
65,519
65,519
-
Impairment loss on assets
1,417
799
-
51
2,267
2,267
-
Prior year losses carried forward
68,998
37,725
-
44,669
151,392
151,392
-
Investment at fair value
(745,611)
(655,723)
(102,709)
-
(1,504,043)
-
(1,504,043)
Foreign currency translation differences
(74,260)
(261,438)
-
(1,109)
(336,807)
-
(336,807)
Revaluation of investment property
1,867
-
-
-
1,867
1,867
-
Investment in associates
(11,592)
849
-
-
(10,743)
-
(10,743)
ESOP deferred
13,132
(265)
-
-
12,867
12,867
-
Securitization surplus Revaluation
(10,460)
(17,886)
-
-
(28,346)
-
(28,346)
(861,025)
(930,826)
(102,709)
44,788
(1,849,772)
233,912
(2,083,684)
*The amounts recognized in profit or loss are related to only those components where taxable temporary differences/deductible temporary differences arise.
22 Provisions
31 December 2025
31 December 2024
Claims provision
1,058,200
928,441
ECL on unfunded exposure (Bank NXT)
89,414
142,187
End of service benefits
759,071
801,766
Financial guarantee for contingent liabilities
78,072
40,883
1,984,757
1,913,277
2025
Claims provision
End of service benefits*
Financial guarantee for contingent liabilities
ECL on unfunded exposure (Bank NXT)
Total
Balance as at 1 January
928,441
801,766
40,883
142,187
1,913,277
Charged during the year
218,879
114,204
113,575
-
446,658
Foreign currency differences
(4,402)
(51,229)
-
(758)
(56,389)
Used during the year
(23,227)
(105,670)
-
-
(128,897)
Bad debt
-
-
(76,386)
-
(76,386)
Released (Note 27)
(61,491)
-
-
(52,015)
(113,506)
Balance as at 31 December
1,058,200
759,071
78,072
89,414
1,984,757
2024
Claims provision
End of service benefits*
Financial guarantee for contingent liabilities
ECL on unfunded exposure (Bank NXT)
Total
Balance as at 1 January
532,632
467,663
32,698
66,278
1,099,271
Charged during the year
588,952
75,927
40,678
74,029
779,586
Foreign currency differences
31,954
309,704
-
1,880
343,538
Used during the year
(184,085)
(47,310)
-
-
(231,395)
Bad debt
-
-
(32,493)
-
(32,493)
Released (Note 27)
(41,012)
(4,218)
-
-
(45,230)
Balance as at 31 December
928,441
801,766
40,883
142,187
1,913,277
* Related to Group entities outside Egypt.
23 Loans and borrowings
Borrowers
Borrowing limits
Contract dates
Maturity dates
31 December 2025
31 December 2024
EFG Corp-Solutions *
900 million
27/05/2024
27/05/2031
83,103
618,713
,,
201.7 million
20/05/2025
20/05/2032
174,119
5,015
,,
967.5 million
4/8/2025
4/8/2032
107,784
440,681
,,
500 million
2/9/2025
2/9/2032
455,100
456,449
,,
2 billion
21/04/2024
21/04/2031
86,077
347,529
,,
1.450 billion
24/06/2025
24/06/2032
788,158
548,415
,,
13.4 million
29/08/2022
31/10/2028
13,400
18,494
,,
3.55 million
21/06/2023
13/07/2027
199,150
--
,,
393 million
1/7/2024
21/08/2025
105,849
318,665
,,
100 million
25/06/2023
25/06/2030
--
7,033
,,
400 million
12/12/2023
12/12/2028
160,516
92,259
,,
120.6 million
20/10/2024
20/10/2031
120,565
174,830
,,
8 million
19/10/2017
3/3/2027
381,600
609,960
,,
107.5 million
24/06/2025
24/06/2032
107,432
124,342
,,
--
7/2/2018
7/2/2025
--
3,349
,,
1 billion
4/3/2025
4/3/2032
450,204
6,161
,,
900 million
11/6/2025
11/6/2032
--
488,264
,,
560 million
26/10/2025
26/10/2032
231,634
494,321
,,
4.783 million
26/11/2020
26/11/2027
4,784
13,006
,,
--
15/07/2025
15/07/2032
--
70,689
,,
200 million
10/8/2024
10/8/2029
158,361
41,396
,,
500 million
6/7/2025
6/7/2032
380,370
--
4,008,206
4,879,571
Tanmeyah Micro Enterprise Services S.A.E
220 million
25/01/2025
24/12/2026
148,134
204,768
,,
600 million
28/07/2025
29/07/2026
313,315
166,805
,,
200 million
5/3/2024
4/3/2026
--
143,740
,,
250 million
1/11/2025
14/09/2026
297,221
238,154
,,
175 million
1/11/2025
31/10/2026
164,401
--
923,071
753,467
U Consumer finance
700 million
18/09/2025
22/07/2026
688,053
598,438
,,
350 million
3/12/2024
2/12/2025
122,454
253,876
,,
325 million
5/2/2024
4/2/2025
167,589
324,264
,,
500 million
17/04/2025
16/04/2026
355,672
298,630
,,
50 million
12/11/2024
11/11/2025
18,167
49,394
,,
800 million
28/09/2025
31/08/2026
715,120
600,000
,,
400 million
15/12/2024
14/12/2025
305,989
392,361
,,
300 million
15/05/2025
14/05/2026
251,171
187,323
,,
1.244 billion
4/2/2025
31/12/2025
1,162,232
338,530
,,
4.700 billion
9/7/2024
8/7/2026
2,162,154
950,871
,,
750 million
2/5/2024
26/03/2025
--
473,800
,,
200 million
21/09/2025
31/08/2026
59,319
110,000
,,
1.100 billion
18/09/2025
20/08/2026
1,098,860
499,967
,,
170 million
21/01/2025
20/01/2026
171,963
--
,,
250 million
16/02/2025
15/02/2026
50,147
--
,,
150 million
14/12/2025
16/08/2026
149,685
--
,,
600 million
6/2/2025
5/2/2026
261,994
--
7,740,569
5,077,454
EFG Finance Holding
115 million
26/10/2025
26/10/2032
--
105,887
,,
--
24/06/2025
24/06/2032
--
166,001
,,
400 million
6/8/2025
5/8/2032
81,694
380,538
81,694
652,426
EFG For SME
150 million
29/07/2024
28/07/2025
131,998
5,475
,,
150 million
18/11/2024
15/09/2025
2,554
1,501
134,552
6,976
Bank NXT
120 million
18/08/2014
1/4/2040
110,683
119,673
Lease liabilities**
2,105,305
--
Balance
15,104,080
11,489,567
Distributed as follows:
Current
10,595,592
6,160,149
Non-current
4,508,488
5,329,418
15,104,080
11,489,567
23 Loans and borrowings (continued)
- Most interest rates on loans and credit facilities are based on SOFR, LIBOR, or the borrowing
rate announced by the Central Bank of Egypt (Corridor), plus a margin.
* EFG Corp Solutions (wholly owned subsidiary) is committed to settle the credit granted by waiving the rental value of the finance lease contracts to the banks within the credit amount. However, the Group does not have the intention to settle it on the net basis.
** Lease liabilities amount of EGP Thousands 2,105,305 in the name of EFG Holding Company that represents sale and lease back agreement for the entire land and buildings located in Smart Village and the owned area by the company in Nile City building.
* Note no. (12 &13).
24 Share capital
31 December 2025
31 December 2024
EGP Thousands
EGP Thousands
Authorized capital
30,000,000
30,000,000
Issued and paid up capital
7,179,465
7,298,030
Number of shares outstanding in Thousands
1,435,893
1,459,606
31 December 2025
31 December 2024
EGP
EGP
Par value per share
5
5
- The company's Extraordinary General Assembly approved in its session held on September 20, 2025 to decrease the company's issued capital from EGP Thousands 7,298,030 to EGP Thousands 7,179,465 distributed on 1,435,893,008 shares with an decrease amounting to EGP Thousands 118,565 through writing off 23,713,000 treasury shares with par value EGP 5 per share, which had been held for more than one year, while charging the price difference between the acquisition cost of the treasury shares and their par value, amounting to EGP Thousands 281,410 to the Share Premium account. All written-off shares were originally issued for cash consideration. The required procedures were completed, and the reduction was recorded in the company's Commercial Register.
24.1 Treasury shares
- The Holding Company's board of directors approved in its session held on May 22, 2024 to purchase a number of 25 million shares of the Holding Company's shares and the Holding Company has purchased a number of 23,713,000 shares from Egyptian stock exchange market at cost of EGP thousand 399,975.
- -The company's Extraordinary General Assembly approved in its session held on September 20, 2025 to write off the 23,713,000 treasury shares with par value EGP 5 per share, which had been purchased for more than one year.
25 Non - controlling interests ("NCIs")
31 December 2025
31 December 2024
Non-controlling interests
9,535,382
5,309,139
Movement in NCIs during the year was as follows
Balance as at 1 January
5,309,139
4,082,475
Comprehensive income for the year
1,997,752
1,364,066
Dividends during the year
(210,497)
(139,963)
Sale of equity securities through OCI
-
1,296
Changes in ownership interests without change in control
381,869
1,265
Share of NCI in the increase of subsidiaries paid up capital
2,057,119
-
Balance as at 31 December
9,535,382
5,309,139
25 Non - controlling interests ("NCIs") (continued)
The Group considers the Bank NXT as a subsidiary that has material non-controlling interests to the Group. The principal place of business of Bank NXT is the Arab Republic of Egypt. The proportion of ownership interests and voting rights held by non-controlling interests in Bank NXT represents 48.979% as of 31 December 2025 (31 December 2024: 48.979%). Summarized financial information of Bank NXT is disclosed under Note 31 under the Commercial bank (Bank NXT) business segment.
Accumulated non-controlling interests of Bank NXT amounted to EGP Thousand 7,690,627 as 31 December 2025 (2024: 4,218,199).
The profit allocated to non-controlling interests of Bank NXT during the year ended 31 December 2025 amounted to EGP Thousand 1,393,929 (2024: 860,846).
26 Contingent liabilities and commitments
The Holding Company guarantees its subsidiary EFG- Hermes UAE LLC against the Letters of Guarantee issued from banks amounting to:
31 December 2025
31 December 2024
AED
143,670
93,670
Equivalent to EGP
1,865,900
1,296,243
Assets under management (off-financial position item)
314,047,634
269,559,987
Securitization and Sukuk transactions
The Group has entered certain securitization and Sukuk transactions, the assets and liabilities related to those transactions do not qualify for the recognition criteria, accordingly the Group has not recognized those assets or liabilities.
The assets and liabilities related to those transactions are represented in:
31 December 2025
31 December 2024
Client portfolios related to securitization transactions
17,298,403
12,803,298
Balances with custodians
958,017
1,177,445
Land and buildings related to Sukuk transactions
600,000
600,000
Total assets
18,856,420
14,580,743
Bonds
14,933,920
10,342,453
Sukuk
240,000
420,000
Total liabilities
15,173,920
10,762,453
26 Contingent liabilities (continued)
The contingent liabilities of Bank NXT is as follows:
(i) Capital commitments
Financial investments
The value of commitments related to financial investments for which payments were not requested until the date of the financial position as at 31 December:
USD Thousands
31 December 2025
Contribution amount
Amount paid
Residual amount
African Export -Import Bank
5,776
2,442
3,335
ContributionAmount
Amount Paid
EGP Thousands Residual Amount
Long term assets
565,903
421,741
144,162
31 December 2024
Contribution Amount
Amount paid
USD Thousands Residual amount
African Export -Import Bank
5,336
2,294
3,042
Contribution Amount
Amount Paid
EGP Thousands Residual Amount
Long term assets
1,097,003
784,425
312,578
(ii) Commitments on loans, guarantees and facilities are as follows:
31 December 2025
31 December 2024
Loan Commitments
15,431,790
14,182,263
Letters of guarantees
3,287,494
2,282,896
Letters of credit (Export and Import)
1,778,560
938,697
Acceptances of supplier facilities
1,195,543
356,038
21,693,387
17,759,894
27 Other Revenue
Other revenues include rental income and non-recurring income as follows:
For the year ended
31 December 2025
31 December 2024
Release of provisions (Note 22)
113,506
45,230
Rental incomes
193,258
176,656
Gain on sale of property and equipment
16,414
22,882
Gain on sale of investment property
--
7,648
Gain on sale of other assets
1,207,010
--
Gain from assets acquired as settlement of debts
41,593
17,398
Custodian rebates
41,229
27,604
Advisory fees
125,011
4,651
Other gains
106,487
160,501
1,844,508
462,570
28 Impairment loss on financial assets - net of recoveries
For the year ended
31 December 2025
31 December 2024
Accounts receivable
(14,803)
(49,764)
Funded facilities to customers
552,933
379,250
Banking loans and facilities (Bank NXT)
300,730
303,774
Cash and cash equivalents
(2,881)
5,977
Other assets
100,450
58,422
Investments FVOCI - debt instruments
251
(14,881)
Investments at amortized cost - debt instruments
14,245
(789)
Equity accounted investees *
-
91,013
950,925
773,002
* This pertains to Paytabs (Joint Venture)
29 Income tax expense
For the year ended
December 2025
December 2024
Current income tax
2,405,334
1,439,591
Deferred income tax (Note 21)
(1,165,764)
930,826
1,239,570
2,370,417
Effective tax rate
December 2025
December 2024
Net profit (before tax)
7,042,291
7,457,513
Tax rate
22.50%
22.50%
Income tax calculated based on net income
1,584,515
1,677,940
Tax adjustments effect
820,819
(238,349)
Movement in unrecognised deferred tax
(1,165,764)
930,826
Income tax
1,239,570
2,370,417
Effective tax rate
17.60%
31.79%
29.1 Current tax Liability
For the year ended
December 2025
December 2024
Balance at the beginning of year
1,020,705
638,583
Charge for the year
2,405,334
1,439,591
Withholding tax receivable
(27,678)
(8,406)
Income tax paid
(1,470,852)
(1,052,558)
Effect of foreign currency translation
(4,494)
3,495
Balance at the end of year
1,923,015
1,020,705
30 General and administrative expenses
For the year ended
31 December 2025
31 December 2024
Wages, salaries and similar items (Note 30.1)
10,872,139
10,642,711
Marketing, technology and network expenses
1,741,727
1,174,566
Consultancy
1,290,109
835,706
Travel, accommodation and transportation
162,342
124,829
Leased line and communication expenses
614,322
561,565
Rent and utilities expenses
212,956
166,356
Other expenses
1,441,231
1,207,799
16,334,826
14,713,532
30.1 Wages, salaries and similar items
The Holding Company pays 10% of its dividends to its employees and directly charges such amount to the consolidated statement of profit or loss in accordance with the requirements of IFRS accounting standards.
Share-based payments
The Holding Company introduced an Employees Share Ownership plan (ESOP) in accordance with the shareholder's approval at the extraordinary general assembly meeting by issuing Free shares representing 5.5% of the issued capital of the Company shall be granted to employees, managers and executive board members of the Company and its subsidiaries.
The duration of this program is five years starting as of 1 January 2021 till 31 December 2025, the vesting period is 3-4 years starting from 1 January 2021 till 31 December 2024. The beneficiary entitled to shares granted to 4 equal instalments.
The equity instruments for share-based payment are recognized at fair value on the grant date and are recorded in the income statement with a corresponding increase in equity. The value of expenses charged to the income statement during the year amounted EGP Thousands 83,890.
Equity instruments during the year represents the following:
31 Operating segments
Basis for operating segment: Segment information is presented in respect of the Group's business segments. The primary format, business segment, is based on the Group's management and internal reporting structure. Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items directly attributable to a segment. The revenue & expense and assets & liabilities analyses in the table below are based on the type of business activities and services that are distinguishable component.
For the year ended 31 December 2025
Holding
Brokerage
Asset Management
Investment Banking
Private Equity
Finance Holding
Leasing
Micro Finance
Consumer finance
Factoring
SME Lending
Commercial Bank
Intersegment eliminations
Total
Interest income
1,560,008
2,162,237
8,219
14,351
7,578
74,656
2,325,076
3,561,441
1,475,079
931,394
38,308
15,563,104
(740,175)
26,981,276
Interest expense
(2,086,795)
(637,772)
-
(1,092)
-
(70,894)
(1,915,649)
(1,625,009)
(2,424,368)
(825,451)
(16,550)
(10,492,163)
551,706
(19,544,037)
Net interest income
(526,787)
1,524,465
8,219
13,259
7,578
3,762
409,427
1,936,432
(949,289)
105,943
21,758
5,070,941
(188,469)
7,437,239
Fee and commission income
498
5,625,793
2,793,604
1,804,285
420,389
-
144,286
445,540
1,865,989
120,262
5,030
876,599
(92,944)
14,009,331
Fee and commission expense
(1,779)
(1,236,181)
(614,812)
-
-
(87)
(484)
(129,218)
(65,590)
-
(921)
(300,002)
-
(2,349,074)
Net fee and commission income
(1,281)
4,389,612
2,178,792
1,804,285
420,389
(87)
143,802
316,322
1,800,399
120,262
4,109
576,597
(92,944)
11,660,257
Realized securities' gain
241,733
14,319
-
-
-
3,330
-
(7,190)
-
-
-
410,819
(1,900)
661,111
Net changes in the fair value of investments at FVTPL
769,818
5,157
-
(18,396)
3
-
-
-
753
-
-
3,496
1,900
762,731
Dividend Income
44,890
43,259
9,655
-
-
-
-
-
-
-
-
30,042
-
127,846
Other Revenues
248,809
36,937
789
125,489
6,659
(249)
1,759
129,507
3,152
36
(35)
1,369,594
(77,939)
1,844,508
Net gains on derecognition of financial assets measured at amortized cost
-
-
-
-
-
-
356,293
-
2,152,200
-
-
-
-
2,508,493
Impairment loss on financial assets - net of recoveries
(8,641)
9,843
(335)
(4,757)
5,870
(145)
46,074
(401,867)
(288,231)
(38,262)
(1,916)
(273,315)
4,757
(950,925)
Foreign Currencies Exchange Differences
497,075
17,175
-
-
-
45,038
(3,383)
37,058
(21,375)
(12,421)
(9)
35,770
-
594,928
Share of gain from equity accounted investees
-
-
-
-
(625)
54,021
-
-
-
-
-
19,286
-
72,682
Total Revenues
1,265,616
6,040,767
2,197,120
1,919,880
439,874
105,670
953,972
2,010,262
2,697,609
175,558
23,907
7,243,230
(354,595)
24,718,870
General and administrative expenses
(2,748,916)
(4,288,804)
(1,306,987)
(1,501,169)
(420,707)
(206,957)
(199,640)
(1,715,625)
(1,599,664)
(68,210)
(59,829)
(2,802,582)
584,264
(16,334,826)
Financial guarantee provision
-
-
-
-
-
-
-
(113,575)
-
-
-
-
-
(113,575)
Provisions
(6,249)
(130,421)
(4,037)
(15,586)
(2,705)
-
(1,551)
(1,423)
(17,000)
-
-
(153,940)
(171)
(333,083)
Depreciation and amortisation
(140,701)
(68,228)
(20,483)
(1,837)
(6,355)
(839)
(838)
(108,377)
(91,676)
(121)
(438)
(225,704)
(229,498)
(895,095)
Profit before tax
(1,630,250)
1,553,314
865,613
401,288
10,107
(102,126)
751,943
71,262
989,269
107,227
(36,360)
4,061,004
-
7,042,291
Income tax expense
946,578
(329,791)
(110,817)
(47,285)
1,509
(4,873)
(164,835)
(63,092)
(244,075)
(31,912)
(192)
(1,190,785)
-
(1,239,570)
Profit for the year
(683,672)
1,223,523
754,796
354,003
11,616
(106,999)
587,108
8,170
745,194
75,315
(36,552)
2,870,219
-
5,802,721
Total assets
31,190,626
57,643,085
2,874,878
1,213,300
304,182
1,267,900
9,457,440
7,359,419
14,166,291
3,095,652
227,765
101,846,516
-
230,647,054
Total liabilities
20,810,194
49,147,341
1,414,945
753,372
133,051
60,785
7,719,256
5,173,472
11,968,045
2,777,011
169,330
85,562,271
-
185,689,073
31 Operating segments (continued)
Basis for operating segment (continued)
For the year ended 31 December 2024
Holding
Brokerage
Asset Management
Investment Banking
Private Equity
Finance Holding
Leasing
Micro Financing
Consumer
Factoring
SME Lending
Commercial banking
Intersegment eliminations
Total
Interest income
1,489,194
1,924,393
11,993
100,000
17,605
19,654
1,955,980
2,812,568
1,363,055
654,254
15,671
12,369,651
(414,376)
22,319,642
Interest Expense
(1,410,188)
(585,338)
-
(64,079)
-
(46,079)
(1,561,820)
(1,464,730)
(1,460,603)
(622,892)
(118)
(8,458,569)
364,158
(15,310,258)
Net Interest Income
79,006
1,339,055
11,993
35,921
17,605
(26,425)
394,160
1,347,838
(97,548)
31,362
15,553
3,911,082
(50,218)
7,009,384
Fee and commission income
-
4,360,330
1,705,231
2,310,953
287,777
-
118,597
539,150
1,095,694
96,250
522
934,176
3,706
11,452,386
Fee and commission expense
(6,044)
(799,920)
(210,876)
14
(431)
(71)
(41)
(55,397)
(30,177)
(4)
(38)
(254,116)
-
(1,357,101)
Net Fees and commission Income
(6,044)
3,560,410
1,494,355
2,310,967
287,346
(71)
118,556
483,753
1,065,517
96,246
484
680,060
3,706
10,095,285
Realized securities' (losses)
(207,191)
18,212
1,098
-
23,853
(89)
-
-
-
-
(117)
106,878
-
(57,356)
Net changes in the fair value of investments at FVTPL
2,843,111
(3,650)
5,804
-
(333)
(1,576)
-
-
742
-
-
-
-
2,844,098
Dividend Income
22,392
31,831
-
-
(36)
-
-
-
-
-
-
31,811
-
85,998
Other Revenues
149,005
97,959
7,423
4,652
17,501
-
2,226
104,332
11,750
-
-
85,559
(17,837)
462,570
Foreign Currencies Exchange Differences
2,540,657
11,438
-
-
-
(13,658)
145,753
1,525
96,086
37,785
(179)
88,299
-
2,907,706
Share of Gain from equity accounted investees
-
-
-
-
(8,372)
2,403
-
-
-
-
-
54,822
-
48,853
Net gains on derecognition of financial assets measured at amortized cost
-
-
-
-
-
-
125,980
-
834,712
-
-
-
-
960,692
Impairment loss on financial assets - net of recoveries
61,745
81,337
(2,142)
(8,644)
(37,328)
(90,874)
(81,226)
(144,479)
(171,822)
(60,281)
(1,028)
(316,953)
(1,307)
(773,002)
Total Revenues
5,482,681
5,136,592
1,518,531
2,342,896
300,236
(130,290)
705,449
1,792,969
1,739,437
105,112
14,713
4,641,558
(65,656)
23,584,228
General administrative expenses
(2,994,815)
(4,107,710)
(1,062,591)
(1,631,920)
(412,469)
(101,027)
(166,911)
(1,380,510)
(1,087,961)
(50,296)
(21,991)
(1,893,592)
198,261
(14,713,532)
Financial Guarantee Provision
-
-
-
-
-
-
-
(40,678)
-
-
-
-
-
(40,678)
Provisions
(347,436)
(81,591)
(4,198)
(86)
(2,327)
-
-
(149,590)
(8,000)
-
-
(145,680)
-
(738,908)
Depreciation and amortisation
(167,156)
(45,343)
(14,950)
(507)
(5,709)
(39)
(288)
(77,882)
(56,429)
(609)
(99)
(131,981)
(132,605)
(633,597)
Profit before tax
1,973,274
901,948
436,792
710,383
(120,269)
(231,356)
538,250
144,309
587,047
54,207
(7,377)
2,470,305
-
7,457,513
Income tax expense
(755,108)
(397,593)
20,916
(54,937)
399
2,479
(118,422)
(74,809)
(104,619)
(15,432)
(170)
(873,121)
-
(2,370,417)
Profit for the year
1,218,166
5 04,355
457,708
655,446
(119,870)
(228,877)
419,828
69,500
482,428
38,775
(7,547)
1,597,184
-
5,087,096
Total assets
25,335,823
45,846,393
2,246,988
1,673,334
562,549
374,288
8,738,515
6,859,121
10,562,145
4,589,069
90,752
79,999,434
-
186,878,411
Total liabilities
11,934,391
37,861,579
829,118
1,256,836
417,810
79,717
6,749,751
5,297,004
8,423,267
4,034,120
17,761
70,609,092
-
147,510,446
31 Operating segments (continued)
Geographical segments
The Group operates in three main geographical areas: Egypt, GCC and other. In presenting the geographic information, segment revenue has been based on the geographical location of operation and the segment assets were based on the geographical location of the assets. The Group's operations are reported under geographical segments, reflecting their respective size of operation.
The revenue analysis in the tables below is based on the location of the operating Group, which is the same as the location of the major customers and the location of the operating companies.
December 31, 2025
Egypt
GCC
Other
Total
Total revenues
17,707,015
6,626,335
385,520
24,718,870
Segment assets
152,871,885
68,470,916
9,304,253
230,647,054
December 31, 2024
Egypt
GCC
Other
Total
Total revenues
18,607,126
4,473,266
503,836
23,584,228
Segment assets
132,046,768
42,327,605
12,504,038
186,878,411
For the year ended
Interest income from:
31 December 2025
31 December 2024
Banks and financial institutions
1,324,234
1,462,542
Accounts receivables
928,731
942,710
Loans and facilities to customer
19,785,624
15,643,584
Investment through fair value
3,345,405
3,056,475
Investment at amortized cost
1,597,282
1,214,331
Balance
26,981,276
22,319,642
For the year ended
Interest expenses paid to:
31 December 2025
31 December 2024
Banks and financial institutions
3,865,610
2,794,351
Customer deposits
10,433,697
8,426,422
Loans and borrowings
4,523,311
3,848,268
Short term bonds
716,060
236,363
Interest on defined benefit obligation
5,359
4,854
Balance
19,544,037
15,310,258
32 Tax status (The Holding Company)
-As to Income Tax, for the years from the start of operations until 2019, the competent Tax Inspectorate inspected the parent company's books and all the disputed points have been settled with the Internal Committee. And as to years 2020/2022 have been inspected and appealed and as to years 2023/2024 have not been inspected yet.
- As to Salaries Tax the parent company's books had been examined till 2022 and all the disputed points have been settled with the Internal committee and as to years 2023- December 2025 have not been inspected yet.
- As to Stamp Tax the parent company's books had been examined from year 1998 till 2022 and all the disputed points have been settled with the competent Tax Inspectorate and as to years 2023/2025 have not been inspected yet.
- As to Property Tax for Smart Village building the company paid tax till December 31, 2025 and for Nile City's first building the company paid tax till December 31, 2025.
33 Earnings per share
Earnings per share is calculated by dividing the net profit for the year after deduction of Tier 1 capital notes payment by the weighted average number of ordinary shares in issue during the year as set out below:
31 December 2025
31 December 2024
Net profit for the year attributable to the shareholders of the Holding Company
3,753,339
4,098,933
Weighted average number of ordinary shares:
Number of shares issued/deemed to be outstanding from the beginning of the year
1,459,606
1,459,606
Effect of treasury shares during the year 2025
(23,713)
(14,448)
Weighted average number of ordinary shares
1,435,893
1,445,158
Basic earnings per share - EGP
2.61
2.84
Net profit for the year for calculating diluted earnings per share
3,753,339
4,098,933
Weighted average number of ordinary shares in issue for diluted earnings per share
1,435,893
1,445,158
Diluted earnings per share - EGP
2.61
2.84
Basic and diluted earnings per share are the same due to the fact that the Group has fully issued the shares under share-based payment scheme (Note 30) hence, the impact of dilution is nil for the year ended 31 December 2025 and the year ended 31 December 2024.
34 Financial risk management
The Group, because of its activities, is exposed to various financial risks, considering the risk acceptance is the basis of the financial activity. Some risks or a group of risks are analyzed, assessed, and managed collectively, and therefore the Group intends to achieve an appropriate balance between risk and interest and to reduce the potential negative effects on the financial performance of the Bank. The most significant types of financial risks are credit risk, market risk and liquidity risk and other operating risks. Market risk includes foreign exchange rate risk, and interest rate risk.
Risk management policies are adopted to determine and analyse risks to limit, control and monitor the risks and commit to limits through the reliable techniques and updated information systems. The Bank periodically reviews and modifies the risk management policies and systems to reflect changes in markets, products, services, and the best recent applications.
Risks are managed by Risk Function in terms of the policies approved by the Board of Directors. Risk Function determines, assesses and covers the financial risks in close cooperation with the various operating units of the Bank. The Board of Directors provides written principles for managing the risks as a whole, in addition to written policies covering specific risk areas such as credit risk, foreign exchange risk, interest rate risk and the use of derivative and non-derivative instruments. In addition, the Risk Function is independently responsible for periodic review of the risk management and control environment.
34 Financial risk management (continued)
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management program seeks to minimize potential adverse effects on the Group's financial performance. Management of financial risk in the commercial bank (Bank NXT) is conducted through a separate organization from the investment bank due to regulatory rules and operational necessity. Below is a summary of the risk management framework in both business segments.
34.1 Risk management framework in the investment bank
The investment bank has a central treasury department that works closely with the operating units throughout the Group. The board of directors provides, through its audit and risk committee, guidance to management to issues regarding risk. The board of directors is responsible for:
· Overseeing, ratifying, and reviewing the duties of the risk management department.
· Approving the investment bank's risk appetite framework ("RAF") and ensure it remains consistent with the Firm's short- and long-term strategy, business and capital plans and risk capacity.
· Discuss and determine actions if any of the RAF measures are breached.
Credit risk
I. Investment Banking's Credit risk:
Credit Risk is the risk of loss arising from the inability or failure of a customer, client or counterparty to meet its obligations. We define the credit exposure to a client or counterparty as the loss potential arising from all product classifications including brokerage's margin lending, overdrafts, DVP, FOP, debt instrument's assets held for-sale & assets held to maturity including T-bills & government bonds and cash placement with commercial banks.
A. Margin Lending
Margin trades involve paying for part of the cost (50%) of a security; a loan for the rest is loaned (50%) by our Brokerage arm to its clients and leaving the securities on deposit under EFG's custody as collateral. Margin trades also involve funding 100% of the trade whenever the client submits collateral that maintains a loan ratio of 50%. The margin lending is bearing interest charges calculated monthly
The Role of Risk Management
· The Credit Risk Officer within the Risk Management Function review and scrutinize the margin trading portfolio on a daily basis.
· The Risk Management Function prepare and develop regular reports on the portfolio associated risks and provide recommendations to facilitate the decision-making process.
· The Risk Management Function is responsible to closely monitor the periodic reports issued by the Margin Trading Desk.
· The Risk Management Function continuously monitor clients' limits to ensure that no single client or group of clients exceeds 5% of HSB's margin portfolio and ensure that the clients' holdings are diversified.
· Concentration limits (stock/client/country) limits set by the Risk Management function.
· On Quarterly basis, the credit risk management runs the ECL model to calculate the expected credit loss for the HSB's margin portfolio and to monitor the change from stage to stage concerning margin exposure and the quality of the collateral the risk management coordinate with the Finance Department on the final ECL figure after running different scenarios to be reflected in the Group's provision.
· On a weekly basis the risk management department runs historical and hypothetical stress tests scenarios to assess the possible losses in the margin book. The reports also include a multitude of risk metrics and reports including time to liquidate exposures, clients' portfolios liquidation risk, single stocks exposures and client's concentration risks.
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Credit risk (continued)
B. Client on-boarding
Margin Trading is applicable only to the approved list of stocks for Margin Trading by the EFG Hermes' risk management.
a) Each client should meet min. requirement to be eligible for margin trading. The risk management assess the client creditworthiness, Risk tolerance & his/her trading experience.
b) the risk management has set the following limits to the margin trading:
· Single client exposure
· Single stock exposure/Collateral, Maximum single stock exposure:
· Marginable Stock/Collateral selection,
· Client with single stock as collateral,
· Margin to Free Float & Margin to market cap,
· Board member transactions,
II. NBFI's Credit Risk:
The NBFI's is exposed to credit risk which is the risk resulting from a party's failure to meet its contractual obligations towards the lending entity. The credit risk is considered to be the most significant risk, therefore requiring a prudent risk management framework. Credit risk is mainly represented in lending activities that give rise to funding facilities. Financial risk management and control are present in each subsidiary reporting to its BOD and the head of each business unit regularly. All risk management activities are further overlooked and managed in a centralized unit within the NBFI which additionally reports to the Group's Board of Directors.
Credit risk measurement
Each subsidiary assesses the Probability of Default of its client using internal credit underwriting criteria tailored to its business line. These techniques have been developed internally and analyses its credit worthiness and risk rating. Below is a summary for the internal Risk Rating for the Corporate lending arms:
Corporate lending risk rating:
Corporate Risk Rating Matrix
Grade
1
Low Risk
Performing
2
Moderate Risk
3
Satisfactory Risk
4
Adequate Risk
5
Acceptable Risk
6
Marginally Acceptable
7
Watch List
8
Substandard
Non-Performing
9
Doubtful
10
Loss
Credit risk classification
NBFI assesses the probability of default at the level of each client/ customer using several different techniques based on the nature of the business. This differs from corporate clients to retail whereby the creditworthiness of the client/customers is verified using internally developed models and evaluation techniques for the categories of counterparties, customers and the nature of various facilities. A full study is completed for each client/customer using external data received from the Central bank of Egypt, I-score etc. For Corporate Clients, a full credit study is conducted based on qualitative and quantitative parameters that fully assess the client's creditworthiness. Each client is assigned a risk rating based on the in-depth credit study that accordingly leads to a specific provision coverage.
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Credit risk (continued)
ECL Calculation
For all lending activities under the NBFI; forecasts are developed to assess whether there is a significant increase in credit risk and for the accurate estimation of the expected credit losses (ECL). Management determines the main economic variables that affect credit risk and expected credit losses for each credit portfolio by carrying out an analysis of historical data. The economic variables and the related effect on both Probability of Default (PD) and the Exposure at Default (EAD) and Loss Given Default (LGD) are different depending on the line of business and collateral/financial asset supporting the facility. This is further reviewed and validated by Group's Validation Unit for prudency that undergoes the below:
- Carries out the "regression analysis" to determine the impact of such economic variables on Probability of Default (PD). This allows the management to better understand the historical effects arising from such variables on the default rates and the inputs used in calculating the PD. Further to the key economic scenarios, the validation unit establishes other potential scenarios in addition to assumptions relating to each scenario separately.
- The lifetime probability of default (PD) relating to the key assumption and other assumptions are used, as the outcome of scenario weights are determined for each assumption with the related probabilities of each, in addition to the supporting indicators and qualitative indicators. Based on the results of such study, it is assessed whether this financial asset is located at the first, second or third level, on the basis of which it is determined whether the expected credit losses "ECL" will be computed on 12- month basis "12-month ECL" or over lifetime of the financial instrument "Lifetime ECL".
- The expectations and probabilities of occurrence are subject to a high degree of uncertainty, as it is known to any economic forecasts, therefore the actual results may be significantly different from those anticipated. The Validation unit makes the best estimate of these potential expectations and carries out an analytical study of the irrelevant and non -similar factors for the different credit portfolios to conclude appropriate assumptions for all possible scenarios this is also through the use of "Back-testing Methodology".
Modifications of facilities terms and rescheduling
Each subsidiary under NBFI may modify the terms of the facilities granted to the clients/customers due to commercial renegotiation or financial distress to increase the chances of recovery. The activities of restructuring include arrangements of extension of repayment terms, grace periods, exemption from repayment or some or full interests. Restructuring policies and practices are based on criteria that indicate that repayment is likely to continue. These policies are constantly reviewed.
Reduction and risk avoidance policies
Under NBFI, each subsidiary manages its own risk thresholds including but not limited to Credit limits, Group limits, concentration CAPs related to sectors, tenors, industries, countries, debtors etc. Each subsidiary regulates the levels of acceptable credit risk by setting limits to the amount of risk that will be accepted. These risks are monitored constantly and are reviewed annually or on a recurring basis, when necessary. All thresholds are approved by the risk committee and BOD being the only body of authority allowed to approve alterations to previous CAP's.
Risk Measurement Model
All subsidiaries under NBFI are required to build up provisions in accordance with the instructions of creditworthiness and based on a specific formula set forth by the FRA that is based on the client's customer's repayment behaviour (Days Past Due-DPD). In the event that the required provisions in accordance with the rules of the FRA exceeds the expected credit losses calculated for the purposes of preparing the financial statements, the subsidiary is required to set aside a reserve with the difference between both calculations and this reserve is periodically adjusted by increase or decrease so that it is always equal to the amount of the increase between the two provisions, and this reserve is not distributable.
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Credit risk (continued)
Following is a table showing provision calculation based on FRA for the various subsidiaries:
Leasing:
- Regarding the Performing/Regular Clients, a minimum of 1% provision should be taken.
Level
Delay Period in Days
Category
Provisioning Amount
Comments
1
90 < days < 180
Follow up
10% of the uncovered amount of the asset
N/A
2
180 < days < 275
Substandard
25% of the uncovered amount of the asset
Non-Accrual/Marginalized interest
3
275 < days < 365
Doubtful
50% of the uncovered amount of the asset
Non-Accrual/Marginalized interest
4
365 < days
Inferior
100% of the uncovered amount of the asset
Non-Accrual/Marginalized interest
- Regarding the non-performing/irregular clients: they are defined as any client having overdue rentals exceeding 90 days whereby, the concept of "Cross default" will be applied across the portfolio for each client regardless of the repayment behaviour of individual contracts.
Asset Shrinkage Margin
Asset class
Asset value consideration after Shrinkage %
RE
80% from the current market value after the asset re-evaluation
PV &CV
70% from the current market value after the asset re-evaluation
All other Assets
50% from the current market value after the asset re-evaluation
Intangible Assets
0% not considered as a client balance coverage
- Consequently, a provision % will be applied depending on the days past due (as found in the table below) on the Remaining and Uncovered O/S Dues[1] after applying shrinkage margins on Evaluated Assets.
- All assets related to Non-Performing Leases must be re-evaluated every 6 months and above shrinkage margins to be applied based on each asset class. Asset Cost after Shrinkage is to be compared to the O/S Dues and the following action to be applied:
o If Asset after Shrinkage > O/S Dues: then the normal provision rate (for performing loans) i.e., 1% is to be applied on the O/S Dues (O/S Principal + Overdue Rents and Corridor).
o If Asset after Shrinkage < O/S Dues: then the provision % (as found in above table) is to be applied on the uncovered portion of O/S dues.
Factoring:
- Regarding the Performing/Regular Clients, a minimum of 1% provision should be taken.
- Regarding the non-performing/irregular clients the provisions calculation below should be implemented after excluding the portfolio that is secured by banks, correspondent factoring companies, credit insurance or any other securities accepted by the FRA. Provisions for irregular clients will be calculated as follows:
Overdue tenor
Provision %
Notes
From 60 days to 90 days
10%
-
< 90 days to 120 days
25%
-
< 120 days to 180 days
50%
-
< 180 days to 365 days
70%
Marginalizing interest
< 365 days
100%
Marginalizing interest
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Credit risk (continued)
SMEs:
- Regarding the Performing/Regular Clients, a minimum of 1% provision should be taken after one year of getting the activity license.
- Regarding the non-performing/ irregular clients: they are defined as any client having overdue instalments and consequently a provision % will be applied depending on the days past due as stipulated in the table below:
Level
Delay Period in Days
Category
Provisioning Amount
Comments
1
≥ 30 days and ≤90 days
Requires Follow-up
10%
Non-Accrual/Marginalized interest
2
> 90 days and<120 days
Requires Follow-up
20%
Non-Accrual/Marginalized interest
3
>120 days and ≥ 180 days
Doubtful
50%
Non-Accrual/Marginalized interest
4
> 180 days
Inferior
10%
Non-Accrual/Marginalized interest
Micro-Finance:
- The Group is required to take provision percentage based on Days Past Due performance per customer as highlighted in the table below:
Delay Period in Days
Provisioning Amount
Punctual clients that pay on due date or have delays not exceeding 7 days
2%
Have delays from > 7 days and<30 days
10%
Have delays from > 30 days and<60 days
25%
Have delays from > 60 days and<90 days
50%
Have delays from > 90 days and<120 days
70%
More than 120 days
100%
Clients have deferred instalments (not exceeding 3 instalments)
10%
Rescheduled customers
50%
*The above excludes the case of a deceased customer whereby the full provision should be accounted for after excluding any insurance in favor of the Group (if available)
*The above provisions should be calculated on the full O/S dues related to the full facility of any customer and not only on the due instalment(s).
Consumer Finance:
- Regarding the Performing/Regular Clients: a minimum of 1% provision should be taken for performing portfolio after one year of getting the activity license.
- Regarding the non-performing/ irregular customers (not related to movable assets financing): they are defined as any customer having overdue instalments and consequently a provision % will be applied depending on the days past due as stipulated in the below table:
Level
Delay Period in Days
Category
Provisioning Amount
Comments
1
≥ 30 days and ≤90 days
Requires Follow-up
10%
Non-Accrual/Marginalized interest
2
> 90 days and<120 days
Requires Follow-up
30%
Non-Accrual/Marginalized interest
3
>120 days and ≥ 180 days
Doubtful
50%
Non-Accrual/Marginalized interest
4
> 180 days
Inferior
100%
Non-Accrual/Marginalized interest
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Credit risk (continued)
- Regarding the non-performing/ irregular customers related to movable asset financing: they are defined as any customer having overdue instalments and consequently a provision % will be applied depending on the days past due as stipulated in the below table and calculation is based on the book value of the asset after discounting 70%.
Level
Delay Period in Days
Category
Provisioning Amount
Comments
1
≥ 30 days and ≤90 days
Requires Follow-up
10% of the uncovered amount of the asset
-
2
> 90 days and<120 days
Requires Follow-up
30% of the uncovered amount of the asset
Non-Accrual/Marginalized interest
3
>120 days and ≥ 180 days
Doubtful
50% of the uncovered amount of the asset
Non-Accrual/Marginalized interest
4
> 180 days
Inferior
100% of the uncovered amount of the asset
Non-Accrual/Marginalized interest
The following table provides information on the quality of financial assets subject to ECL calculation during the financial year:
31 December 2025
Account
Stage 1
Stage 2
Stage 3
Total
Banks and Time deposits
Banks
23,971,015
--
--
23,971,015
Time Deposit
3,628,095
987,675
--
4,615,770
ECL
(2,497)
(1,322)
--
(3,819)
Net carrying amount
27,596,613
986,353
--
28,582,966
Loans and advances to customers
Loans and facilitates to customers
28,832,806
919,747
763,452
30,516,005
ECL
(196,349)
(69,153)
(438,465)
(703,967)
Net carrying amount
28,636,457
850,594
324,988
29,812,038
Accounts Receivable
Accounts Receivable
17,550,304
29,059
517,303
18,096,666
ECL
(17,720)
(4,488)
(401,505)
(423,714)
Net carrying amount
17,532,584
24,571
115,798
17,672,952
Financial Investments
Debt Instruments
29,533,652
--
--
29,533,652
ECL
(11,011)
--
--
(11,011)
Net carrying amount
29,522,641
--
--
29,522,641
Other Assets
Other assets
5,668,086
59,724
176,724
5,904,534
ECL
(31,009)
(2,571)
(63,388)
(96,968)
Net carrying amount
5,637,077
57,153
113,335
5,807,566
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Credit risk (continued)
31 December 2024
Account
Stage 1
Stage 2
Stage 3
Total
Banks and Time deposits
Banks
20,694,387
-
-
20,694,387
Time Deposit
8,840,978
1,070,551
-
9,911,529
ECL
(2,184)
(4,855)
-
(7,039)
Net carrying amount
29,533,181
1,065,696
-
30,598,877
Loans and facilities to customers
Loans and facilitates to customers
27,074,496
876,635
642,197
28,593,328
ECL
(371,414)
(78,426)
(308,462)
(758,302)
Net carrying amount
26,703,082
798,209
333,735
27,835,026
Accounts Receivable
Accounts Receivable
15,759,494
54,966
448,028
16,262,488
ECL
(40,583)
(4,669)
(443,854)
(489,106)
Net carrying amount
15,718,911
50,297
4,174
15,773,382
Investments FVOCI
Debt Instruments
1,035,890
-
-
1,035,890
ECL
-
-
-
-
Net carrying amount
1,035,890
-
-
1,035,890
Other Assets
Other assets
3,748,945
46,029
74,166
3,869,140
ECL
(2,960)
(1,573)
(58,626)
(63,159)
Net carrying amount
3,745,985
44,456
15,540
3,805,981
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Credit risk (continued)
Activity segments
The following table represents the analysis of the Investment Bank's main credit exposure at carrying value categorized by the activities practiced by the Investment bank's customers.
31 December 2025
Commercial activity
Industrial activity
Financial institutions
Real estate companies
Governmental sector
Other Activities
Individuals
Total
Banks and Time deposits
--
--
28,582,966
--
--
--
--
28,582,966
Loans and facilities to customers
5,761,669
2,659,080
461,934
6,435,436
--
160,143
14,333,776
29,812,038
Accounts Receivable
554,264
--
9,741,249
--
--
--
7,377,439
17,672,952
Investment FVTPL
2,405
--
32,185,417
--
--
410,418
--
32,598,240
Investment FVOCI
889,141
--
9,492,472
17,448
--
1,102
--
10,400,163
Other assets
--
--
5,140,192
--
4,372
522,103
140,899
5,807,566
Total
7,207,479
2,659,080
85,604,230
6,452,884
4,372
1,093,766
21,852,114
124,873,925
31 December 2024
Banks and Time deposits
-
-
30,598,877
-
-
-
-
30,598,877
Loans and facilities to customers
7,885,923
982,959
521,702
6,677,525
-
1,644,000
10,122,917
27,835,026
Accounts Receivable
756,555
-
7,029,100
-
-
90,572
7,897,155
15,773,382
Investment FVTPL
2,405
-
23,343,594
-
-
142,675
-
23,488,674
Investment FVOCI
-
-
1,192,446
190,004
-
1,172
-
1,383,622
Other assets
6,775
2,885
3,062,432
-
3,422
376,715
353,753
3,805,982
Total
8,651,658
985,844
65,748,151
6,867,529
3,422
2,255,134
18,373,825
102,885,563
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Market risk
Market risk is defined as the potential loss in both on and off-balance sheet positions resulting from movements in market risk factors such as foreign exchange rates, interest rates, and equity prices.
Market risk is represented in the factors which affect values, earnings and profits of all securities negotiated in stock exchange or affect the value, earning and profit of a particular security.
According to the Group's investment policy, the following procedures are undertaken to reduce the effect of this risk.
- Performing the necessary studies before investment decision to verify the merits of the investment.
- Diversification of investments in different sectors and industries.
- Performing continuous studies required to follow up the Group's investments and their development.
Foreign exchange risk
The investment bank operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the US dollar and other GCC currencies. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.
Management requires investment bank companies to manage their foreign currency risk against their functional currency. Commercial transactions are conducted either in the functional currency of the investment bank country or in transaction currency.
The investment bank actively manages its currency exposure by holding different currency positions in accordance with the RAF and may use derivatives or hedging tools if needed. If the Egyptian pound had weakened/strengthened by 10% against the US dollar with all other variables held constant the Holding Company would have recognized gains or losses for the year as follows:
Year ended 31 December 2025
Year ended 31 December 2024
Weakened 10 %
1,157,262
1,289,806
Strengthened 10 %
(1,157,262)
(1,289,806)
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Market risk (continued)
Exposure to market risks- Trading Portfolios
Value at Risk is used to measure market risk exposure within the Group's trading portfolios which comprise of trading investments at fair value through profit or loss is Value at Risk ("VaR"). The VaR of a trading portfolio is the expected loss that will arise on a portfolio over a specified period of time (holding period) from an adverse market movement with a specified probability (confidence level). The VaR model uses historical simulation based on a 99% confidence level and assumes a 1-day holding period.
VaR- Trading Book
EGP'000
2025
52,515
2024
52,093
Trading Book Top Contribution VaR by Classification
Y-2025 (%)
Y-2024 (%)
Fixed Income
99.63
89.8
Funds
-0.57
5.89
Equity
0.94
4.31
Exposure to market risks- Investment Portfolios
The principal analytical tool also used to measure and control market risk exposure within the Group's investments portfolios which comprise of trading investments at fair value through other comprehensive income is Value at Risk ("VaR"). The VaR model uses historical simulation based on a 99% confidence level and assumes a 1-day holding period.
VaR- Investment Book
EGP'000
2025
22,027
2024
16,518
Investment Book Top Contribution VaR by Classification
Y-2025 (%)
Y-2024 (%)
Equity
-0.60
84.36
Fixed Income
100.60
15.64
Interest rate risk
Interest rate risk stems from the sensitivity of earnings to future movements in interest rates applied on assets and liabilities. The Group's management closely monitors interest rate fluctuations on a continuous basis and ensures that assets and liabilities are matched and re-priced in a timely manner.
The Group is exposed to interest rate risk as a result of mismatches or gaps in the amounts of assets and liabilities that mature or are re-priced in a given period. The most important source of interest rate risk derives from the lending, funding and investing activities, where fluctuations in interest rates are reflected in interest margins and earnings.
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Market risk (continued)
Interest rate risk (continued)
The tables below summaries the Investment Bank 's exposure to the interest rate fluctuations risk:
31 December 2025
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without interest
Total
Financial Assets
Cash and cash equivalents
16,952,410
777,825
830,169
--
--
10,046,786
28,607,190
Accounts Receivable
2,972,009
2,555,891
2,452,280
2,050,407
--
7,642,365
17,672,952
Loans and advances to customers
1,675,066
2,831,389
10,510,389
14,769,819
25,375
--
29,812,038
Investments at fair value through other comprehensive income
--
570,564
6,713,789
2,044,442
13,331
1,058,037
10,400,163
Investments at Fair value through profit or loss
818,748
6,781,248
7,463,309
3,026,884
2,305,121
12,202,930
32,598,240
Equity accounted investees
--
--
--
--
--
348,157
348,157
Other Assets
--
--
--
--
--
5,807,566
5,807,566
Total financial assets at 31 December 2025
22,418,233
13,516,917
27,969,936
21,891,552
2,343,827
37,105,841
125,246,306
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without interest
Total
Financial liabilities
Due to banks and financial institutions and overdraft
1,424,098
4,523,138
24,521,909
1,218,564
--
--
31,687,709
Loans and borrowing
539,783
1,840,691
6,921,909
3,585,709
2,105,305
--
14,993,397
Other liabilities
4,604
61,242
99,890
162,161
--
8,686,821
9,014,718
Accounts payable - customers credit balance at fair value through profit and loss
818,748
6,781,248
6,072,031
315,693
--
--
13,987,720
Accounts payable - customers credit balance
--
--
--
--
--
23,136,225
23,136,225
Issued bonds
--
--
3,909,625
--
--
--
3,909,625
Total financial liabilities at 31 December 2025
2,787,233
13,206,319
41,525,364
5,282,127
2,105,305
31,823,046
96,729,394
31 December 2025
19,631,000
310,598
(13,555,428)
16,609,425
238,522
5,283,348
28,517,465
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
31 December 2024
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without interest
Total
Financial Assets
Cash and cash equivalents
25,501,575
3,260,093
-
60
-
1,851,008
30,612,736
Accounts Receivable
4,848,339
73,396
5,344,520
-
-
5,507,127
15,773,382
Loans and advances to customers
825,058
2,249,797
8,113,530
15,549,892
406,185
690,564
27,835,026
Investments at fair value through other comprehensive income
-
-
-
1,040,605
60,638
282,379
1,383,622
Investments at Fair value through profit or loss
114,900
679,492
8,438,532
704,043
1,488,975
12,062,732
23,488,674
Investments in associates
-
-
-
-
-
424,139
424,139
Other Assets
221,137
-
-
182,536
-
3,402,309
3,805,982
Total financial assets at 31 December 2024
31,511,009
6,262,778
21,896,582
17,477,136
1,955,798
24,220,258
103,323,561
Financial liabilities
Due to banks and financial institutions and overdraft
2,354,369
1,652,760
17,774,022
439,656
-
-
22,220,807
Loans and borrowing
73,739
127,911
2,088,839
9,073,764
5,639
-
11,369,892
Other liabilities
23,042
21,266
40,862
415,084
-
8,871,124
9,371,378
Accounts payable - customers credit balance at fair value through profit and loss
-
-
7,901,466
-
-
-
7,901,466
Accounts payable - customers credit balance
-
-
-
-
-
20,566,943
20,566,943
Issued bonds
-
-
1,032,665
400,000
-
-
1,432,665
Total financial liabilities at 31 December 2024
2,451,150
1,801,937
28,837,854
10,328,504
5,639
29,438,067
72,863,151
31 December 2024
29,059,859
1,342,369
(3,822,800)
7,148,632
1,950,159
(5,217,809)
30,460,410
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Market risk (continued)
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its payment obligations when they fall due under normal and stress circumstances. To limit this risk, management has arranged diversified funding sources.
Cash flow forecasting is performed in the operating entities of the bank and aggregated by the central treasury unit. The unit monitors the bank's liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its committed short-term facilities at all times so that the bank does not breach any capital adequacy rules.
Surplus cash held by the operating entities over and above balance required for working capital management are, with the input of central treasury, are either up streamed to the Holding Company invested in time deposits, money market accounts and investment funds.
31 December 2025
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without maturity
Total
Due to banks and financial institutions and overdraft
1,424,098
4,523,138
24,521,909
1,218,564
-
-
31,687,709
Loans and borrowing
539,783
1,840,691
6,921,909
3,585,709
2,105,305
-
14,993,397
Other liabilities
949,410
1,620,751
2,321,867
307,456
432,885
3,382,349
9,014,718
Accounts payable - customers credit balance at fair value through profit and loss
818,748
6,781,248
6,072,031
315,693
-
-
13,987,720
Accounts payable - customers credit balance
23,136,225
-
-
-
-
-
23,136,225
Issued bonds
-
-
3,909,625
-
-
-
3,909,625
Current Tax Liability
-
-
1,033,628
-
-
-
1,033,628
Total financial liabilities according to the contractual maturity date
26,868,264
14,765,828
44,780,969
5,427,422
2,538,190
3,382,349
97,763,022
Total financial assets according to the contractual maturity date
41,002,676
18,799,986
31,220,963
22,147,188
7,668,362
4,407,131
125,246,306
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Market risk (continued)
Liquidity risk (continued)
31 December 2024
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without maturity
Total
Due to banks and financial institutions and overdraft
2,354,369
1,652,760
17,774,023
439,656
-
-
22,220,808
Loans and borrowing
73,738
127,911
2,088,840
9,073,764
5,639
-
11,369,893
Other liabilities
494,802
4,115,836
4,011,498
588,488
-
160,755
9,371,378
Accounts payable - customers credit balance at fair value through profit and loss
-
-
7,901,466
-
-
-
7,901,466
Accounts payable - customers credit balance
20,566,943
-
-
-
-
-
20,566,943
Issued bonds
-
-
1,032,665
400,000
-
-
1,432,665
Current Tax Liability
-
-
615,193
-
-
-
615,193
Total financial liabilities according to the contractual maturity date
23,489,852
5,896,507
33,423,684
10,501,908
5,639
160,755
73,478,345
Total financial assets according to the contractual maturity date
40,811,360
7,441,765
28,310,473
19,312,238
1,957,941
6,260,601
104,094,378
34 Financial risk management (continued)
34.1 Risk management framework in the investment bank (continued)
Operational risk
Operational risk is the risk of direct or indirect loss due to an event or action causing failure of technology, process infrastructure, personnel, and other risks having an operational risk impact. The Group seeks to minimize actual or potential losses from operational risk failure through a framework of policies and procedures that identify, assess, control, manage, and report those risks.
Controls include effective segregation of duties, access, authorization and reconciliation procedures, staff education and assessment processes.
34.2 Risk management framework in Bank NXT
Credit risk
The Bank is exposed to credit risk which is the risk resulting from a party's failure to meet its contractual obligations towards the Bank. The credit risk is considered to be the most significant risk for the Bank, therefore requiring careful management. Credit risk is mainly represented in lending activities that give rise to loans, facilities and investment activities that result in the Bank's assets including debt instruments.
Credit risk exists also in financial instruments outside the financial position such as loan commitments. The financial risk management and control are centralized in a financial risk management team in the Bank's Risk Management Department which reports to the Board of Directors and head of each business unit regularly.
Loans and facilities to banks and customers (including commitments and financial guarantee contracts)
In measuring credit risk of Funded facilities to customers and to banks, the Bank's rating system is based on three key pillars:
- Current exposures to the counterparty and its likely future development, from which the Bank derive the (exposure at default);
- The risk of default failure (Loss given default); and
- The probability of default by the customer or counterparty on its contractual obligations.
These credit risk measurements, are embedded in the Bank's daily operations which reflect expected loss through the expected loss model required by the Banking Supervision Committee, and the operational measures can contradict with the burden of impairment in accordance with the previous standards that depend on the losses that have realized on the date of the financial statements (realized loss model) and not the expected losses as will come after.
The Bank assesses the probability of default per each customer using internal rating techniques tailored to the various categories of customers. These techniques have been developed internally and the statistical analyses combine credit officers' personal judgment to reach the appropriate viability rating.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Customers of the Bank are segmented into four viability rating classes. The Bank's viability rating scale, which is shown below, reflects the range of default probabilities defined for each rating class. This means that, in principle, credit positions migrate between classes as the assessment of their probability of default changes. The rating techniques are kept under review and are upgraded as necessary. The Bank regularly validates the performance of the viability rating techniques and their ability to predict cases of default.
Bank's internal rating classes Bank's rating
Rating description
1
Performing debts
2
Standard monitoring
3
Special monitoring
4
Non- performing debts
The position exposed to default depends on the amounts expected by the Bank to be outstanding when default occurs. For example, for a loan, this position is the nominal value and for commitments, the Bank recognizes all amounts actually withdrawn in addition to other amounts that are expected to have been withdrawn up to the date of the delay if it occurs.
Loss given default or loss severity represents the Bank's expectation of the extent of loss on a claim should a default occur. It is expressed as percentage of loss to debt and typically varies by type of the debtor, seniority of claim and availability of collateral or other credit coverages.
Estimation of exposure to credit risks to manage the credit risks is a complex matter that requires the use of statistical and electronic models, as the level of exposure to credit risks changes depending on the changes in market conditions and other economic areas in a complex and rapid degree. The exposure to credit risk changes depending on the changes in the level, value and timing of expected cash flows and the passage of time. Accordingly, assessment of the credit risk of the assets portfolio requires further estimations of the probability of default and the related loss rates. The Bank measures credit risk losses by using the probability of default (default in contractual liabilities) based on the carrying amount balance of the financial instrument at the date of Exposure at Default and loss given default.
Classification of credit risks
The Bank assesses the probability of default at the level of each customer / related Group / credit product, by using techniques to classify the customers into different categories, taking into account the minimum rating in accordance with the CBE instructions in terms of determining the creditworthiness of the customers and making the provisions issued during the year 2005. Therefore, the Bank uses a Group of internally developed models and evaluation techniques for the categories of counterparties, customers and the nature of various loans in light of the available information that is collected on the date of adoption of the used model (such as: level of income, level of disposable income and guarantees for individual clients, revenues, type of industry, and other financial and non-financial indicators of the institutions). The Bank completes such indicators with a set of external data, such as the inquiry reports issued by both CBE and credit reporting companies on borrowers and the reports issued by the other local and external credit rating agencies. Moreover, the models used by the Bank allow the systematic exercise of expert assessment by credit risk officials in the final internal credit rating. Therefore, this allows to consider other matters and indicators that may not have been taken as part of other data inputs in the internally or externally developed assessment models and techniques or through external sources.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Classification of credit risks (continued)
Credit grades are assessed so that the risk of default increases incrementally at each higher risk grade, namely the difference in default rates between the rating grade A and A- is less than the difference in default rates between rating grade B and B-. Additional considerations for each type of credit portfolio held by the Bank are set out below:
Individuals, retail banking products and small & micro enterprises
After the date of initial recognition, the borrower's payment behaviour is monitored periodically to calculate a measurement of the payment pattern. Any other information known about the borrower, supposed to be determined by the Bank, may have an impact the creditworthiness, such as unemployment rates and non- payment precedents, as they are included to measure the payment pattern and default rates are, accordingly, determined for each payment pattern measurement.
(Large & Medium) Enterprises and Companies
The rating is determined at the level of the borrower / Groups with similar credit risks. Any updated or new credit information or assessments are included in the credit system constantly and periodically. In addition, information about the creditworthiness of the borrower / Groups with similar credit risks is also updated periodically from other sources such as financial statements and other published financial and non-financial statements.
Debt Instruments, Treasury Bills and Government Bonds
The Bank uses the external ratings issued by the institutions mentioned in the CBE's instructions to manage the credit risk in terms of the debt instruments in the investment portfolio. These published classifications are monitored and updated regularly and periodically. The default rates associated with each rating are determined based on the rates realized over the previous twelve months, as published by the aforementioned rating agencies. The loss rate of the government and CBE debt instruments dominated in local currency is zero.
Future data used in the expected loss model
Future data is used in assessing whether there is a significant increase in the credit risk of financial instruments and estimating the expected credit losses (ECL). The management of Bank determines the main economic variables that affect credit risk and expected credit losses for each credit portfolio by carrying out an analysis of historical data. The economic variables and the related effect on both Probability of Default "PD" and the Exposure at Default "EAD" and Loss Given Default "LGD" are different depending on the financial asset. The Bank will use expert opinions regarding these assumptions and estimates, if necessary.
To determine the impact of such economic variables on both Probability of Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD), the management of the Bank carries out the "regression analysis" to understand the historical effects arising from such variables on the default rates and the inputs used in calculating both Exposure at Default (EAD) and Loss Given Default (LGD). Further to the key economic scenarios, the management of Bank establishes other potential scenarios in addition to assumptions relating to each scenario separately.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Classification of credit risks (continued)
Future data used in the expected loss model (continued)
The lifetime probability of default (PD) relating to the key assumption and other assumptions are used, as the outcome of multiplication is determined for each assumption with the related probabilities of each, in addition to the supporting indicators and qualitative indicators. Based on the results of such study, it is assessed whether this financial asset is located at the first, second or third level, on the basis of which it is determined whether the expected credit losses "ECL" will be computed on 12- month bases "12-month ECL" or over lifetime of the financial instrument "Lifetime ECL".
The expectations and probabilities of occurrence are subject to a high degree of uncertainty, as it is known to any economic forecasts, therefore the actual results may be significantly different from those anticipated. The Bank makes the best estimate of these potential expectations and carries out an analytical study of the irrelevant and non -similar factors for the different credit portfolios to conclude appropriate assumptions for all possible scenarios.
Variable Economic Assumptions
The most significant assumptions that have an impact on the expected credit losses "ECL" are:
(i) Consumption Pricing Indicators (CPI)
(ii) Unemployment Rate
(iii) Gross Domestic Product (GDP)
(iv) Gross national saving/investment
(v) Real available income
Classification of the instruments relating to the losses measured on basis of the similar Groups
For ECL provisions, Groups are classified on the basis of similar credit risk characteristics, as risk exposure within the Bank is homogeneous. When carrying out this classification, it is taken into consideration that there is sufficient information that enables the Bank to classify the Bank with statistical reliability. When sufficient information is not available, the Bank takes into consideration the complementary internal / external reference data.
Corporate loans
- Probability of default model (S& P) is used.
- A conciliation was made between "S&P" and "ORR".
- The model was updated by some economic indicates to keep the probability of default in line with the clients existing in Egypt.
- The model was updated by the ratios of change in the low credit rating of the other clients of the Bank for two years to keep the ratios of model default in line with the clients of the Bank.
Maximum Exposure to Credit Risks - Impaired Financial Instruments
The following table includes the analysis of maximum exposure to the credit risks of financial instruments for which the provision of expected credit risks (ECL) is recognized
The following table represents the total carrying amount of the financial assets and the maximum exposure to credit risk on these financial assets.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Maximum exposure to credit risks - impaired financial instruments (continued)
EGP Thousands
Retail
31 December 2025
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
Overdraft
31,513
--
5
31,518
Personal loans
13,082,285
825
1,078
13,084,188
Credit cards
984,714
--
55
984,769
Mortgage Loans
3,068,529
--
5,227
3,073,756
Special monitoring
Overdraft
16,530
87
602
17,219
Personal loans
47,080
459,231
172,862
679,173
Credit cards
24,800
3,945
16,481
45,226
Mortgage Loans
3,315
7,196
1,108
11,619
Total carrying amount
17,258,766
471,284
197,418
17,927,468
Expected credit losses
(39,118)
(32,418)
(195,006)
(266,542)
Net carrying amount
17,219,648
438,866
2,412
17,660,926
Collaterals
4,167,762
335,459
1,122
4,504,343
EGP Thousands
Retail
31 December 2024
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
Overdraft
61,700
95
467
62,262
Personal loans
7,684,007
229,312
20,927
7,934,246
Credit cards
387,902
1,661
231
389,794
Mortgage Loans
1,784,129
13,473
6,298
1,803,900
Special monitoring
Overdraft
-
-
147
147
Personal loans
6,945
285
120,315
127,545
Credit cards
2,300
70
467
2,837
Mortgage Loans
-
-
563
563
Total carrying amount
9,926,983
244,896
149,415
10,321,294
Expected credit losses
(40,232)
(9,388)
(148,911)
(198,531)
Net carrying amount
9,886,751
235,508
504
10,122,763
Collaterals
2,911,374
26,335
1,706
2,939,415
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Maximum exposure to credit risks - impaired financial instruments (continued)
EGP Thousands
Corporate
31 December 2025
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
Overdraft
1,270,830
1,022
--
1,271,852
Direct loans
24,244,813
75,490
--
24,320,303
Syndicated Loans
5,338,574
1,280,353
--
6,618,927
Special monitoring
Overdraft
--
106
--
106
Direct loans
--
209,348
--
209,348
Default
Overdraft
--
--
2,610
2,610
Direct loans
--
--
774,477
774,477
Syndicated Loans
--
--
202,134
202,134
Total carrying amount
30,854,217
1,566,319
979,221
33,399,757
Expected credit losses
(283,662)
(866,189)
(887,827)
(2,037,678)
Net carrying amount
30,570,555
700,130
91,394
31,362,079
Collaterals
4,531,299
259,046
96,742
4,887,087
EGP Thousands
Corporate
31 December 2024
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
Overdraft
263,840
19
-
263,859
Direct loans
14,871,233
322,318
-
15,193,551
Syndicated Loans
4,816,629
304,567
-
5,121,196
Special monitoring
Overdraft
-
493
-
493
Direct loans
-
34,693
-
34,693
Syndicated Loans
-
459,330
-
459,330
Default
Overdraft
-
-
2,916
2,916
Direct loans
-
-
913,201
913,201
Syndicated Loans
-
-
202,134
202,134
Total carrying amount
19,951,702
1,121,420
1,118,251
22,191,373
Expected credit losses
(525,427)
(468,763)
(1,054,238)
(2,048,428)
Net carrying amount
19,426,275
652,657
64,013
20,142,945
Collaterals
2,379,740
302,803
70,200
2,752,743
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Maximum exposure to credit risks - impaired financial instruments (continued)
EGP Thousands
Due From Banks
31 December 2025
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
8,141,365
--
--
8,141,365
Total carrying amount
8,141,365
--
--
8,141,365
Expected credit losses
(3,873)
--
--
(3,873)
Net carrying amount
8,137,492
--
--
8,137,492
EGP Thousands
Financial Investments
31 December 2025
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
29,361,551
--
--
29,361,551
Total carrying amount
29,361,551
--
--
29,361,551
Expected credit losses
(92,728)
--
--
(92,728)
Net carrying amount
29,268,823
--
--
29,268,823
EGP Thousands
Other Assets
31 December 2025
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
3,177,452
--
--
3,177,452
Total carrying amount
3,177,452
--
--
3,177,452
Expected credit losses
(21,641)
--
--
(21,641)
Net carrying amount
3,155,811
--
--
3,155,811
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Maximum exposure to credit risks - impaired financial instruments (continued)
EGP Thousands
Due From Banks
31 December 2024
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
11,997,888
-
-
11,997,888
Total carrying amount
11,997,888
-
-
11,997,888
Expected credit losses
(4,012)
-
-
(4,012)
Net carrying amount
11,993,876
-
-
11,993,876
EGP Thousands
Financial Investments
31 December 2024
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
23,285,422
-
-
23,285,422
Total carrying amount
23,285,422
-
-
23,285,422
Expected credit losses
(96,781)
-
-
(96,781)
Net carrying amount
23,188,641
-
-
23,188,641
EGP Thousands
Other Assets
31 December 2024
Order of Expected Credit Losses
Stage 1
Stage 2
Stage 3
Total
Credit Rating
12 Month
Lifetime
Lifetime
Standard monitoring
2,817,087
-
-
2,817,087
Total carrying amount
2,817,087
-
-
2,817,087
Expected credit losses
(13,293)
-
-
(13,293)
Net carrying amount
2,803,794
-
-
2,803,794
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
The following table displays changes in balances and ECL between the beginning and end of the year:
Corporate Loans
Stage 1
Stage 2
Stage 3
EGP Thousands
12 months
Lifetime
Lifetime
Total
ECL
ECL
ECL
ECL
Balance as of 1 January 2025
525,427
468,763
1,054,238
2,048,428
New financial assets purchased or issued
170,651
177,832
10
348,493
Financial assets matured or derecognized
(154,299)
(38,454)
(21,935)
(214,688)
Transfer to stage 1
1,733
(1,733)
--
--
Transfer to stage 2
(28,491)
28,491
--
--
Transfer to stage 3
(610)
(2,089)
2,699
--
Changes in the probability of default
(222,680)
239,933
(5,156)
12,097
Write- off during the year
--
--
(129,146)
(129,146)
Proceeds from previously written off debts
--
--
20,150
20,150
Foreign exchange differences
(8,069)
(6,554)
(33,033)
(47,656)
Balance as of 31 December 2025
283,662
866,189
887,827
2,037,678
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Corporate Loans
Stage 1 12 months ECL
Stage 2 Life time ECL
Stage 3 Life time ECL
EGP Thousands Total ECL
Balance as of 1 January 2024
347,350
167,724
917,827
1,432,901
New financial assets purchased or issued
272,778
38,021
-
310,799
Financial assets matured or derecognised
(116,118)
(21,784)
(87,164)
(225,066)
Transfer to stage 1
-
-
-
-
Transfer to stage 2
(494)
494
-
-
Transfer to stage 3
(438)
(2,883)
3,321
-
Changes in the probability of default
(30,587)
245,588
(38,123)
176,878
Write- off during the year
-
-
(94,670)
(94,670)
Proceeds from previously written off debts
-
-
100,154
100,154
Foreign exchange differences
52,936
41,603
252,893
347,432
Balance as of 31 December 2024
525,427
468,763
1,054,238
2,048,428
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Retail Loans
Stage 1
Stage 2
Stage 3
EGP Thousands
12 months
Lifetime
Lifetime
Total
ECL
ECL
ECL
ECL
Balance as of 1 January 2025
40,232
9,388
148,911
198,531
New financial assets purchased or issued
10,120
9,248
28,949
48,317
Financial assets matured or derecognized
(2,230)
(165)
25,839
23,444
Transfer to stage 1
30,547
(2,758)
(27,789)
--
Transfer to stage 2
(857)
2,371
(1,514)
--
Transfer to stage 3
(223)
(3,362)
3,585
--
Changes in the probability of default
(38,442)
17,644
103,865
83,067
Write- off during the period
--
--
(102,292)
(102,292)
Proceeds from previously written off debts
--
--
15,406
15,406
Foreign exchange differences
(29)
52
46
69
Balance as of 31 December 2025
39,118
32,418
195,006
266,542
34 Financial risk management (continued)
EGP Thousands
Retail Loans
Stage 1 12 months ECL
Stage 2 Life time ECL
Stage 3 Life time ECL
Total ECL
Balance as of 1 January 2024
20,775
14,831
153,956
189,562
New financial assets purchased or issued
17,030
1,267
-
18,297
Financial assets matured or derecognised
(1,585)
(1,303)
12,175
9,287
Transfer to stage 1
23,593
(1,773)
(21,820)
-
Transfer to stage 2
(947)
3,869
(2,922)
-
Transfer to stage 3
(331)
(5,475)
5,806
-
Changes in the probability of default
(18,323)
(2,028)
33,930
13,579
Write- off during the year
-
-
(101,425)
(101,425)
Proceeds from previously written off debts
-
-
69,104
69,104
Foreign exchange differences
20
-
107
127
Balance as of 31 December 2024
40,232
9,388
148,911
198,531
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
31 December 2025
Due From Banks
Stage 1
Stage 2
Stage 3
EGP Thousands
12 months
Life time
Life time
Total
ECL
ECL
ECL
ECL
Balance as of 1 January 2025
4,012
--
--
4,012
New financial assets purchased or issued
26,569
--
--
26,569
Financial assets matured or derecognized
(18,554)
--
--
(18,554)
Changes in the probability of default
(7,741)
--
--
(7,741)
Foreign exchange differences
(413)
--
--
(413)
Balance as of 31 December 2025
3,873
--
--
3,873
31 December 2024
Balance as of 1 January 2024
2,716
--
--
2,716
New financial assets purchased or issued
23,137
--
--
23,137
Financial assets matured or derecognised
(13,995)
--
--
(13,995)
Changes in the probability of default
(8,159)
--
--
(8,159)
Foreign exchange differences
313
--
--
313
Balance as of 31 December 2024
4,012
--
--
4,012
34 Financial risk management (continued)
31 December 2025
Financial Investments at fair value through Other Comprehensive income
Stage 1
Stage 2
Stage 3
EGP Thousands
12 months
Life time
Life time
Total
ECL
ECL
ECL
ECL
Balance as of 1 January 2025
33,747
--
--
33,747
New financial assets purchased or issued
8,220
--
--
8,220
Financial assets matured or derecognised
(6,058)
--
--
(6,058)
Changes in the probability of default
(15,711)
--
--
(15,711)
Foreign exchange differences
(801)
--
--
(801)
Balance as of 31 December 2025
19,397
--
--
19,397
31 December 2024
Balance as of 1 January 2024
30,314
--
--
30,314
New financial assets purchased or issued
13,872
--
--
13,872
Financial assets matured or derecognised
(13,770)
--
--
(13,770)
Changes in the probability of default
(410)
--
--
(410)
Foreign exchange differences
3,741
--
--
3,741
Balance as of 31 December 2024
33,747
--
--
33,747
34 Financial risk management (continued)
34.1 Risk management framework in Bank NXT (continued)
Credit risk (continued)
31 December 2025
Financial Investments at AC
Stage 1
Stage 2
Stage 3
EGP Thousands
12 months
Life time
Life time
Total
ECL
ECL
ECL
ECL
Balance as of 1 January 2025
63,034
--
--
63,034
New financial assets purchased or issued
28,090
--
--
28,090
Financial assets matured or derecognized
(22,989)
--
--
(22,989)
Changes in the probability of default
9,144
--
--
9,144
Foreign exchange differences
(3,948)
--
--
(3,948)
Balance as of 31 December 2025
73,331
--
--
73,331
31 December 2024
Balance as of 1 January 2024
40,120
--
--
40,120
New financial assets purchased or issued
65,296
--
--
65,296
Financial assets matured or derecognised
(3,626)
--
--
(3,626)
Changes in the probability of default
(62,459)
--
--
(62,459)
Foreign exchange differences
23,703
--
--
23,703
Balance as of 31 December 2024
63,034
--
--
63,034
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Credit Guarantees
The Bank uses many policies and practices to limit the credit risks. The most widely adopted of these is the acceptability of collateral for debt instruments and loan commitments. The Bank has internal policies regarding classes of collateral that can be accepted to limit or decrease the credit risks.
The Bank accrues out an assessment of the guarantees that have been obtained when establishing these loans. This assessment is regularly assessed. The key types of guarantees are:
· Cash and cash equivalent
· Real estate mortgage
· Derivatives margin agreement that has been signed with the Bank as a part of main offsetting agreements.
· Commercial mortgages
· Financial assets pledge such as debt instruments and equity instruments.
The guarantees held as collateral against the financial assets other than loans and facilities depend on the nature of the instrument, as debt securities, government bonds and other qualified bills are generally not secured, except for the asset-backed securities and similar instruments secured by portfolios of financial instruments. The derivatives are often secured.
The policies adopted by the Bank have not been changed significantly in terms of obtaining guarantees during the financial year, and there has been no change in the quality of those guarantees held by the Bank compared to the previous financial year.
The Bank closely monitors the guarantees held against the low - credit financial assets, as it is likely that the Bank will hold collateral to mitigate potential credit losses.
Written-off Financial Instruments (Loans)
The Bank excludes the financial assets that are still under compulsory collection for unpaid contractual amounts of the bad assets. The Bank seeks to fully recover some amounts legally due that were partially or fully written off due to the lack of a possibility of a full recovery.
Modifications of loans terms and rescheduling
The Bank sometimes modifies terms of the loans granted to the customers due to the commercial renegotiation or non-performing to increase the chances of recovery. The activities of restructuring include arrangements of extension of repayment terms, grace periods, exemption from repayment or some or full interests. Restructuring policies and practices are based on indicators or criteria that indicate - based on the discretion of management- that repayment is likely to continue. These policies are constantly reviewed.
Reduction and Risk Avoidance Policies
The Bank manages, limits, and controls the concentration of credit risks at the debtor level, Groups, industries, and countries. The Bank regulates the levels of acceptable credit risks by setting limits to the amount of risk that will be accepted at the level of each borrower, or Group of borrowers, and at the level of economic activities and geographical sectors.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Reduction and Risk Avoidance Policies (continued)
These risks are monitored constantly and are reviewed annually or on a recurring basis, when necessary. Limits of the credit risks at the level of the borrower / bank, producer, sector, and country are quarterly approved by the Board of Directors.
Credit limits for any borrower, including banks, are divided into sub-limits that include the amounts on- and off- balance sheet, and the daily risk limit relating to trading items such as forward foreign exchange contracts. Actual amounts are compared with the daily limits. Exposure to credit risks is also managed through periodic analysis of the ability of borrowers and potential borrowers to meet the repayment of their liabilities and by amending lending limits, if appropriate.
Means of setting limits of to the risks are shown as following:
Guarantees
The Bank adopts many policies and controls to limit the credit risks. These means include the guarantees obtained against borrowed funds. The Bank sets guiding rules for specific acceptable classes of guarantees. The key types guarantee of loans and facilities are:
· Real estate mortgages.
· Mortgage of activity assets such as machinery and merchandise
· Mortgage of financial instruments such as debt instruments and equity.
The financing is often granted in the longer term and loans to the companies are secured. In order to reduce the credit loss to a minimum, the Bank seeks to get additional guarantees from the concerned parties and when indicators of impairment are shown for a loan or facilities. The guarantees taken as collateral for assets other than loans and facilities are determined based on the nature of the instrument. Generally, the debt instruments and treasury bills are not secured, except for Groups of financial instruments covered by Asset-Backed Securities and similar instruments that are secured by a portfolio of financial instruments.
Derivatives
The Bank maintains strict control limits on net open derivative positions (i.e., the difference between purchase and sale contracts) by both amount and term. The amount exposed to credit risk, at any time, is determined at the fair value of the instrument that provides a benefit for the Bank, i.e. an asset with a positive fair value that represents a portion of the contractual / notional value used to express the size of the existing instruments. This credit risk exposure is managed as part of the overall lending limits with customers, together with potential exposures from market movements. Collateral or other security is not usually obtained for credit risk exposures on these instruments, except where the Bank requires margin deposits from counterparties.
Settlement risk arises in any situation where a payment in cash, securities or equities is made against the expectation of a corresponding receipt in cash, securities, or equities. Daily settlement limits are established for each counter party to cover the aggregate of all settlement risk arising from the Bank's market transactions on any single day.
Master Netting Arrangements
The Bank further restricts its exposure to credit losses by entering into master netting arrangements with counterparties with which it undertakes a significant volume of transactions. Master netting arrangements do not generally result in an offset of assets and liabilities shown in the balance sheet, as transactions are usually settled on a gross basis. However, the credit risk associated with favorable contracts is reduced by a master netting arrangement to the extent that if a default occurs, all amounts with the counterparty are terminated and settled on a net basis. The Bank's overall exposure to credit risk on derivative instruments subject to master netting arrangements can change substantially within a short year, as it is affected by each transaction subject to the arrangement.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Credit Related Commitments
The main purpose of credit-related commitments is to ensure that funds are available to the customer on demand, and financial guarantee contracts carry a credit risk related to loans, and documentary and commercial credits issued by the Bank on behalf of the customer to grant a third party the right to withdraw from the Bank within certain amounts and under specific terms and conditions often secured against the goods being shipped and therefore carries a lower degree of risk than a direct loan.
Credit Related Commitments (continued)
Commitments to extend credit represent unused portions of authorizations to extend credit in the form of loans, guarantees or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to loss in an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused commitments, as most commitments to extend credit are contingent upon customers maintaining specific credit standards. The Bank monitors the term to maturity of credit commitments because longer-term commitments generally have a greater degree of credit risk than shorter-term commitments.
Expected Credit Loss Measurement Policy
The Bank's policy requires defining three stages for classifying financial assets that are measured at amortized cost, loan commitments and financial guarantees, as well as debt instruments at fair value through other comprehensive income, according to changes in credit quality since the initial recognition, and then measuring (expected credit losses) in the value related to these instruments as follows:
The unimpaired financial asset is classified upon initial recognition in Stage 1 and credit risk is monitored on an ongoing basis by the Bank's credit risk department.
If there has been a significant increase in credit risk since initial recognition, the financial asset is transferred to Stage 2 and the financial asset is not considered impaired at this stage (lifetime expected credit loss in the absence of credit impairment).
If there are indications of impairment in the value of the financial asset, it is transferred to Stage 3, and the Bank relies on the following indicators to determine whether there are objective evidence indicating.
· A significant increase in the rate of interest on the financial asset because of the increase in credit risk.
· Negative material changes in the activity and financial or economic conditions in which the borrower operates.
· A scheduling request because of difficulties facing the borrower.
· Negative material changes in actual or expected operating results or cash flows.
· Early signs of cash flow/liquidity problems such as delays in servicing creditors/business loans.
· Cancellation of a direct facility by the Bank due to the borrower's high credit risk.
General Bank Risk Measurement Model
The management performs classifications in the form of a more detailed sub-Group to comply with the requirements of the Central Bank of Egypt, and the assets exposed to credit risk are classified according to detailed rules and conditions that depend largely on the information related to the customer, his activity, his financial status, and the extent of his regularity of payment.
The Bank calculates the required provisions in accordance with the instructions of creditworthiness, on the basis of specific ratios by the Central Bank of Egypt, and in the event that the required provisions in accordance with the rules of the Central Bank of Egypt exceed the expected credit losses calculated for the purposes of preparing the financial statements, the general bank risk reserve is set aside within rights ownership with a discount on the distributable profits by the amount of that increase .
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
General Bank Risk Measurement Model (continued)
This reserve is periodically adjusted by increase or decrease so that it is always equal to the amount of the increase between the two provisions, and this reserve is not distributable.
Following is a table on the creditworthiness levels for institutions in accordance with the internal assessment bases compared to the Central Bank of Egypt assessment bases and the provision ratios required for the impairment of the assets exposed to credit risk:
CBE Rating
Rating description
Provision %
Internal rating description
1
Low Risk
0%
Good debts
2
Moderate Risk
1%
Good debts
3
Satisfactory Risk
1%
Good debts
4
Reasonable Risk
2%
Good debts
5
Acceptable Risk
2%
Good debts
6
Marginally Acceptable Risk
3%
Standard monitoring
7
Watch List
5%
Special monitoring
8
Substandard
20%
Non-performing debts
9
Doubtful
50%
Non-performing debts
10
Bad Debt
100%
Non-performing debts
Maximum limits for credit risk before collateral - items exposed to credit risk (on-balance sheet)
31 December 2025
31 December 2024
Treasury Bills and other Government Securities
12,502,180
13,042,703
Due from banks
8,137,492
11,993,876
Loans and facilities to customers
Retail Loans
Personal loans
13,547,692
7,890,500
Credit cards
987,338
375,008
Overdraft
48,737
62,322
Mortgage loans
3,077,159
1,794,933
Corporate Loans
Overdraft
1,264,530
263,166
Direct loans
24,309,881
14,945,541
Syndicated loans
5,787,668
4,934,238
Suspended interest
(643)
(643)
Unearned interest
(706,376)
(171,488)
Financial Investment
Debt instruments
16,786,040
10,179,603
Other assets - accrued revenue
1,336,750
989,741
87,078,448
66,299,500
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Off-balance sheet items exposed to Credit risk :
31-Dec-25
31-Dec-24
LoanCommitment
15,431,790
14,182,263
Letters of guarantee
4,513,566
3,611,737
Letters of credit
1,790,308
1,017,394
Acceptances on supplier facilities
1,200,646
357,051
22,936,310
19,168,445
The above table represents the maximum bank exposure to credit risk 31 December 2025 and 31 December 2024 without taking in consideration any collateral held for in-balance sheet items the balances included are based on net carrying amounts as reported in the balance sheet and as shown above 55.39% of the maximum exposure arising from loans and facilities to customers against 45.04% at 31 December 2024; While investments in debt tools represent 33.75% compared to 35.53% on December 31, 2024.
Management is confident in its ability to continue to control and sustain minimal exposure of credit risk to the Bank resulting from both its loan and facility portfolio and debt instruments based on the following:
- 98.09% of the loans and facility portfolio is categorized in the top two grades of the internal rating system against 96.56% on 31 December 2024.
- 90.06% of the loans and facility portfolio without accruals or impairment indicators against 90.59% on 31 December 2024.
- 89.93% of the investments in debt instruments and treasury bills represent the debt instruments on Egyptian Government against 88.28% on 31 December 2024
Loans and facilities
Balances of loans and facilities at 31 December 2025 are set out below:
31 December 2025
31 December 2024
Stage 1
48,112,983
29,878,685
Stage 2
2,037,603
1,366,316
Stage 3
1,176,639
1,267,666
Total
51,327,225
32,512,667
Less:
Expected credit losses
(2,304,220)
(2,246,959)
Reserved interests
(643)
(643)
Interest unearned
(706,376)
(171,488)
Net
48,315,986
30,093,577
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Loans and facilities according to past due periods
31 December 2025
Retail
Corporate
EGP Thousand Rating
Overdraft
Credit cards
Personal loans
Mortgage loans
Overdraft
Direct loans
Syndicated loans
Total loans and facilities tocustomers
Performing /No Dues
47,195
860,110
12,017,364
3,050,551
1,273,693
23,695,459
5,282,719
46,227,091
Past due up to 30 days
472
124,500
1,113,218
26,824
297
799,424
451,908
2,516,643
Past due 30-60 days
253
20,325
294,054
5,516
42
16,640
--
336,830
Past due more than 60 to 90 days
259
8,001
170,713
1,936
61
14,650
275,586
471,206
Impairment
558
17,059
168,012
548
475
777,955
810,848
1,775,455
Total
48,737
1,029,995
13,763,361
3,085,375
1,274,568
25,304,128
6,821,061
51,327,225
Expected Credit Losses
--
(42,657)
(215,669)
(8,216)
(10,038)
(994,247)
(1,033,393)
(2,304,220)
Suspended interest
--
--
(5)
--
--
(638)
--
(643)
Unearned interest
--
--
(700,329)
--
--
(6,047)
--
(706,376)
Total
48,737
987,338
12,847,358
3,077,159
1,264,530
24,303,196
5,787,668
48,315,986
31 December 2024
Retail
Corporate
EGP Thousand Rating
Overdraft
Credit cards
Personal loans
Mortgage loans
Overdraft
Direct loans
Syndicated loans
Total loans and facilities tocustomers
Performing /No Dues
62,200
341,221
7,191,045
1,795,038
267,207
14,216,338
5,580,526
29,453,575
Past due up to 30 days
-
40,297
500,736
6,736
-
962,623
-
1,510,392
Past due 30-60 days
62
5,989
146,353
1,864
9
24,480
-
178,757
Past due more than 60 to 90 days
-
2,286
96,468
262
-
11,714
-
110,730
Impairment
147
2,838
127,189
563
52
926,290
202,134
1,259,213
Total
62,409
392,631
8,061,791
1,804,463
267,268
16,141,445
5,782,660
32,512,667
Expected Credit Losses
(87)
(17,623)
(171,291)
(9,530)
(4,102)
(1,195,904)
(848,422)
(2,246,959)
Suspended interest
-
-
(5)
-
-
(638)
-
(643)
Unearned interest
-
-
(149,209)
-
-
(22,279)
-
(171,488)
Total
62,322
375,008
7,741,286
1,794,933
263,166
14,922,624
4,934,238
30,093,577
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Restructured loans and facilities
Restructuring activities include extending payment arrangements, implementing forced management programs, modifying, and postponing payments. Policies for implementing restructuring depend on indicators or criteria that indicate that there is a high probability of Continued payments, based on the personal judgment of management. These policies are subject to continuous review. It is usual to apply restructuring to long-term loans, especially customer financing loans, The restructured loans at 31 December 2025 amounted 2,079,245 EGP thousands compared to 2,122,894 EGP thousand at 31 December 2024.
Written-off loans
In accordance with the Board of Directors' decision or its specialized committees, the written-off loans from the non-performing loans are written-off against its related loan loss provisions and that step is made after exhausting all the possible recovery processes.
Debt Instruments and Treasury Bills
The table below presents an analysis of debt instruments, and other treasury bills according to the rating agencies at 31 December 2025
Treasury bills & other Governmental securities
Debt Instruments
Total
31 December 2025 B
12,538,926
16,822,625
29,361,551
31 December 2024 B-
13,065,489
10,219,851
23,285,340
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Activity segments
The following table represent the analysis of the Bank's main credit exposure at carrying value categorized by the activities practiced by the bank's customers.
EGP Thousands
31 December 2025
Commercial activity
Industrial activity
Financial institutions
Real estate companies
Governmental sector
Other Activities
Individuals
Total
Due from banks
--
--
8,137,492
--
--
--
--
8,137,492
Loans and facilities to customers
Retail loans
Overdraft
--
--
--
--
--
--
48,737
48,737
Personal loans
--
--
--
--
--
--
13,763,361
13,763,361
Credit Cards
--
--
--
--
--
--
1,029,995
1,029,995
Mortgage loans
--
--
--
--
--
--
3,085,375
3,085,375
Corporate loans
Overdraft
328
53,101
2
49
--
1,221,088
--
1,274,568
Direct loans
418,878
14,300,690
3,189,642
2,804,931
--
4,589,987
--
25,304,128
Syndicated loans
--
1,383,003
--
2,214,639
202,986
3,020,433
--
6,821,061
Expected Credit Losses
(40,693)
(1,257,316)
(38,955)
(244,498)
--
(456,216)
(266,542)
(2,304,220)
Suspended interest
--
--
--
--
--
(638)
(5)
(643)
Unearned interest
--
--
--
--
--
(6,047)
(700,329)
(706,376)
Financial Investments
Treasury Bills
--
--
12,502,180
--
--
--
--
12,502,180
Debt instruments
--
--
16,786,040
--
--
--
--
16,786,040
Other assets
--
--
1,336,750
--
--
--
--
1,336,750
Total on 31 December 2025
378,513
14,479,478
41,913,151
4,775,121
202,986
8,368,607
16,960,592
87,078,448
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Credit risk (continued)
Activity segments (continued)
EGP Thousands
31 December 2024
Commercial activity
Industrial activity
Financial institutions
Real estate companies
Governmental sector
Other Activities
Individuals
Total
Cash on Hand and CBE Reserve Account
-
-
8,693,380
-
-
-
-
8,693,380
Due from banks
-
-
11,997,888
-
-
-
-
11,997,888
Loans and facilities to customers
Retail loans
Overdraft
-
-
-
-
-
-
62,409
62,409
Personal loans
-
-
-
-
-
-
8,061,791
8,061,791
Credit Cards
-
-
-
-
-
-
392,631
392,631
Mortgage loans
-
-
-
-
-
-
1,804,463
1,804,463
Corporate loans
Overdraft
188
10,042
34
41
771
256,192
-
267,268
Direct loans
238,323
9,033,158
2,155,526
769,112
-
3,945,326
-
16,141,445
Syndicated loans
-
918,895
-
2,152,667
233,819
2,477,279
-
5,782,660
Financial Investments
Debt instruments
-
-
23,285,340
-
-
-
-
23,285,340
Other assets
-
-
989,741
-
-
-
-
989,741
Total at 31 December 2024
238,511
9,962,095
47,121,909
2,921,820
234,590
6,678,797
10,321,294
77,479,016
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Market risk
Market and liquidity risks are defined as the risks to which the bank is exposed because of maintaining certain positions considering changes or fluctuations in the markets in which the bank operates and not necessarily in which the bank is geographically located.
Market risks result from open positions for the purpose of trading, whether currency positions or investments that are sensitive to changes in interest rates, which affects the market value of those investments, and these effects are reflected in the income statement daily.
As for positions held for non-trading purposes that are sensitive to changes in interest rates, the effect of changes on the bank's capital is reflected.
Trading portfolios arise because of the bank's direct dealings with clients or with the market. While portfolios are created for non-trading purposes because of the bank's management of assets and liabilities and are primarily created through investments classified at amortized cost or through other comprehensive income.
Types of market risks:
These include interest rate risks, exchange rate risks, and liquidity risks. Below is an explanation of each category of market risk:
Interest rate risk: The risks that arise from unfavorable movements in the prevailing interest rates in the market during a certain Year, which may negatively affect the bank's profitability or the economic value of its property rights, and thus its financial position.
Exchange rate risk: It is the risk of a change in the value of the investment due to change in the exchange rate. This also refers to the risks that the bank faces when it needs to close a long or short position in a foreign currency at a loss, due to the adverse movement in exchange rates.
Liquidity risk: It is a type of financial risk that involves the inability to trade financial assets on the market fast enough to influence the price of the market within a given time frame. This happens when there is insufficient market liquidity to make it simple to purchase or sell assets without having a big impact on their price.
Methods for measuring market risk:
Measuring Interest rate risk: Interest rate risks are divided into two types:
• Interest rate risks for positions held for non-trading purposes in the Banking Book, which result from the main activities of the bank that are not carried out for the purpose of trading.
• Additionally, interest rate risk in the trading portfolio, which arises from positions taken with the intention of trading in financial markets, is included in the guidelines for the minimum capital adequacy level under the market risk framework.
The sensitivity of the bank's profitability to interest rate movements in the short term is measured specifically through its impact on net interest income, although interest rate risks have an increasing impact on all of the bank's revenues, including revenues Other than net income from returns (such as commissions), the focus is It will be mainly based on net income from earnings (EAR).
The process of calculating the value of the capital required to meet the interest rate risk for positions held for non-trading purposes is carried out according to the standard method by following the following steps for each currency separately:
• A netting is made between assets and liabilities - including derivative contracts - that are sensitive to return rates in each Year to reach the net position (assets - liabilities).
• The net position for each time Year is multiplied by the discount factor for each Year, which is calculated according to the interest rates for each time Year based on the yield curve for each currency.
• To determine the economic value of the bank's equity prior to any shocks, a forced summation procedure is carried out (considering the signal to make a clearing between the surplus and deficit positions) of the weighted positions for the various time Years for each currency separately.
• The previous steps are repeated by the following 6 scenarios for the rise and fall of interest rates (according to the various changes in the interest curve) for each currency to arrive at the economic value of the bank's equity aftershocks.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Market risk (continued)
Measuring Exchange rate risk:
• The bank applies the value at risk (parametric VAR) method to estimate the market risk of existing positions and the maximum expected loss, based on several assumptions for various changes in market conditions. The value at risk (VAR) is a statistical prediction of the potential loss resulting from adverse market movements and expresses the maximum value that the bank can lose using a 99% confidence coefficient, meaning that there is a 1% probability that the actual loss will be greater than the value of the expected loss.
• The VAR model assumes a ten-day holding Year before closing open positions.
- Three steps to apply VAR as a measurement approach for foreign exchange risk and cost of capital:
1- The bank is expected to calculate its expected losses daily.
2- The bank compares the VAR value at the end of the month with the average daily VAR for 60 days and calculates the capital charge based on the larger value of the two.
3- To adequately calculate the cost of capital, the bank must conduct a back test by comparing actual daily losses with the calculated value of risk.
Value at risk according to risk type
31 December 2025
Average EGP Thousand
Higher EGP Thousand
Lower EGP Thousand
Foreign Currency Exchange Risk
1,284
4,345
138
31 December 2024
Average EGP Thousand
Higher EGP Thousand
Lower EGP Thousand
Foreign Currency Exchange Risk
1,597
4,035
108
Foreign exchange fluctuation risk
The Bank is exposed to the effects of fluctuations in the foreign currency exchange rates on its financial position and cash flows. The Board of Directors sets limits on the level of exposure by currency and in aggregate for both overnight and intra-day positions, which are monitored daily. The table below summarizes the Bank's exposure to foreign currency exchange rate risk at the end of financial year, and Bank's financial instruments at carrying amounts, categorized by currency.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Market risk (continued)
Foreign exchange fluctuation risk (continued)
EGP Thousands
31 December 2025
EGP
USD
EUR
GBP
Other Currencies
Total
Financial Assets
Cash and balances with Central Bank
9,933,828
53,060
20,348
4,990
10,119
10,022,345
Due from banks
4,995,869
2,556,316
452,891
112,166
20,250
8,137,492
Loans and facilities to customers
43,135,044
5,096,548
84,006
264
124
48,315,986
Financial Investments
Financial Investments at fair value through other comprehensive income
9,596,556
756,150
5,613
--
--
10,358,319
Financial Investments at amortized cost
8,446,148
8,857,581
100,337
--
--
17,404,066
Financial Investments at Fair value through profit or loss
1,807,931
--
--
--
--
1,807,931
Financial Investments in Subsidiaries and Associates
Financial Investments at fair value through other comprehensive income
9,152,280
1,833,122
5,194
-
-
10,990,596
Financial Investments at amortized cost
3,375,762
8,994,407
117,376
-
-
12,487,545
Financial Investments in Subsidiaries and Associates
380,728
-
-
-
-
380,728
Asset Held for Sale
92,596
-
-
-
-
92,596
Other Financial Assets
792,161
192,580
4,756
244
-
989,741
Total financial assets at 31 December 2024
55,701,255
19,591,491
530,201
129,621
10,216
75,962,784
Financial liabilities
Due to banks
5,129
471,762
43,598
-
21,620
542,109
Customers' deposits
47,370,305
19,199,727
500,062
129,505
8,986
67,208,585
Other loans
119,673
-
-
-
-
119,673
Other financial liabilities
1,158,122
57,811
48
9
-
1,215,990
Total financial liabilities at 31 December 2024
48,653,229
19,729,300
543,708
129,514
30,606
69,086,357
Net Financial Position at 31 December 2024
7,048,026
(137,809)
(13,507)
107
(20,390)
6,876,427
Interest rate risk
The risk that arises from unfavorable movements in the prevailing interest rates in the market during a certain Year, which may negatively affect the bank's profitability or the economic value of its property rights and thus its financial position.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Market risk (continued)
Interest rate risk (continued)
The tables below summaries the Bank 's exposure to the interest rate fluctuations risk that include carrying amount of the financial instruments categorized based on the repricing dates or the maturity date - whichever is earlier.
31 December 2025
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without interest
Total
Financial Assets
Cash and balances with Central Bank
--
--
--
--
--
10,022,345
10,022,345
Due from banks
5,964,728
1,934,974
50,864
--
--
186,926
8,137,492
Loans and facilities to customers
7,135,332
23,067,677
5,687,998
11,355,933
4,080,285
(3,011,239)
48,315,986
Financial Investments
Financial Investments at fair value through other comprehensive income
444,102
6,108,161
2,626,104
897,855
--
282,097
10,358,319
Financial Investments at amortized cost
1,271,909
6,469,490
858,215
8,877,783
--
(73,331)
17,404,066
Financial Investments in associates
--
--
--
--
--
553
553
Financial Investments at Fair value through profit or loss
209,102
500,461
1,098,368
--
--
--
1,807,931
Other Financial Assets
--
--
--
--
--
1,336,750
1,336,750
Total financial assets at 31 December 2025
15,025,173
38,080,763
10,321,549
21,131,571
4,080,285
8,744,101
97,383,442
Financial liabilities
Due to banks
2,648,555
--
--
--
--
250,327
2,898,882
Customers' deposits
17,263,540
13,641,558
15,000,681
24,934,834
5,094
8,476,328
79,322,035
Other Loans
--
--
--
--
110,683
--
110,683
Other financial liabilities
--
--
--
--
--
550,873
550,873
Total financial liabilities at 31 December 2025
19,912,095
13,641,558
15,000,681
24,934,834
115,777
9,277,528
82,882,473
31 December 2025
(4,886,922)
24,439,205
(4,679,132)
(3,803,263)
3,964,508
(533,427)
14,500,969
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Market risk (continued)
Interest rate risk (continued)
31 December 2024
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without interest
Total
Financial Assets
Cash and balances with Central Bank
-
-
-
-
-
8,934,125
8,934,125
Due from banks
9,887,262
1,955,616
54,245
-
-
96,753
11,993,876
Loans and facilities to customers
3,024,777
14,260,978
3,112,684
9,514,310
2,599,918
(2,419,090)
30,093,577
Financial Investments
Financial Investments at fair value through other comprehensive income
298,274
7,599,419
2,317,897
519,171
-
255,835
10,990,596
Financial Investments at amortized cost
129,403
5,658,271
686,513
6,076,392
-
(63,034)
12,487,545
Financial Investments in Subsidiaries and Associates
-
-
-
-
-
380,728
380,728
Assets held for sale
-
-
-
-
-
92,596
92,596
Other Financial Assets
-
-
-
-
-
989,741
989,741
Total financial assets at 31 December 2024
13,339,716
29,474,284
6,171,339
16,109,873
2,599,918
8,267,654
75,962,784
Financial liabilities
Due to banks
10,577
-
-
-
-
531,532
542,109
Customers' deposits
20,225,042
12,071,031
10,872,502
18,009,556
7,841
6,022,614
67,208,586
Other loans
-
-
-
-
119,673
-
119,673
Other financial liabilities
-
-
-
-
-
1,215,990
1,215,990
Total financial liabilities at 31 December 2024
20,235,619
12,071,031
10,872,502
18,009,556
127,514
7,770,136
69,086,358
Net FinancialPosition at 31 December 2024
(6,895,903)
17,403,253
(4,701,163)
(1,899,683)
2,472,404
497,518
6,876,426
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Market risk (continued)
Liquidity risk
It is a type of financial risk that involves the inability to trade financial assets on the market fast enough to influence the price of the market within a given time frame. This happens when there is insufficient market liquidity to make it simple to purchase or sell assets without having a big impact on their price.
Measuring Liquidity Risk:
- The bank prepares the Liquidity Coverage Ratio (LCR), which aims to ensure that the bank maintains a sufficient amount of high-quality, unencumbered liquid assets to meet net cash outflows within 30 days.
- Net Stable Funding Ratio (NSFR): The Net Stable Funding Ratio represents the relationship between the available stable financing (ASF - Funding Stable Funding Required) (the numerator of the ratio) and the stable financing required (RSF - Funding Stable Required) (the denominator of the ratio), as the ratio works to confront the incompatibility of the financing structure. Long-term by urging the use of stable, long-term sources of funds for a Year extending for at least one year in order to cover investments in assets and any financing claims resulting from obligations outside the budget, which helps the bank to structure its sources of funds.
- On an individual basis (the bank's branches at home country and abroad) and on a combined basis (the banking group includes the bank and all its branches at its home country and abroad and all affiliated financial companies with the exception of insurance companies) on a monthly basis gradually for both the local currency and foreign currencies separately, and 100% must be adhered to as a limit Lowest LCR & NSFR ratios.
- In case of having a deficit in the Liquidity Coverage Ratio (LCR), sources of funds are provided equivalent to the amount of the deficit in the level of high-quality liquid assets, and they are invested within those assets.
- In case of a deficit in the Net Stable Financing Ratio (NSFR), the bank creates capital equivalent to the amount of the deficit in the ratio as additional capital in the capital base, which leads to compliance with the specified limit for the Net Stable Financing Ratio.
The bank calculates the liquidity ratio for both local currency and foreign currencies (keeping the minimum for each of them at 20% and 25%, respectively), where the ratio is calculated on the basis of the daily average of the actual working days during the month.
Liquidity Gap:
The liquidity risk control processes implemented by the bank's Asset and Liabilities Department include the following:
- The liquidity gap occurs when there are differences between the maturity dates and the maturity scale for assets and liabilities. Gap analysis includes evaluating the difference between the maturity dates of assets and liabilities (Liquidity Mismatch).
-The bank prepares a monthly report to monitor market risks and prepare reports on net liquidity gap positions, liquidity gap limits, and liquidity ratio limits.
The following table represent the analysis of the Bank's liquidity coverage ratio:
31-Dec-25
31-Dec-24
Total value of high-quality liquid assets (1)
29,411,503
22,539,597
Total cash outflow
17,086,653
18,080,788
Total cash inflow within the setlimit (the value less than: total cash inflows،75% from total cash outflows)
(10,851,391)
(11,420,652)
Net cash outflows (2)
6,235,262
6,660,136
Liquidity coverage ratio (1/2)
471,70%
338.43%
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Cash Flows Risk Hedge
EGP Thousands
31December2025
Description / Maturity Date
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without interest
Total
Due to banks
2,651,262
--
--
--
--
253,540
2,904,802
Customers deposits
5,225,356
7,272,869
8,718,999
12,018,303
424,034
51,117,110
84,776,671
Other loans
--
--
--
--
110,683
--
110,683
Other liabilities
--
--
--
--
--
550,873
550,873
Total financial liabilities according to the contractualmaturity date
7,876,618
7,272,869
8,718,999
12,018,303
534,717
51,921,523
88,343,029
Total financial assets according to the contractualmaturity date
10,642,245
15,338,825
28,645,457
35,892,133
16,499,415
14,013,670
121,031,745
34 Financial risk management (continued) 34.2 Risk management framework in Bank NXT Cash Flows Risk Hedge
EGP Thousands
31 December2024
Description / Maturity Date
Up to 1 month
More than 1 month to 3 months
More than 3 months to 1 year
More than 1 year to 5 years
More than 5 years
Without interest
Total
Due to banks
10,578
--
--
--
--
531,532
542,110
Customers deposits
10,964,811
12,160,111
10,796,304
7,794,504
21,726
31,203,389
72,940,845
Other loans
--
--
--
--
119,673
--
119,673
Other liabilities
--
--
--
--
--
1,215,990
1,215,990
Total financial liabilities according to the contractualmaturity date
10,975,389
12,160,111
10,796,304
7,794,504
141,399
32,950,911
74,818,618
Total financial assets according to the contractualmaturity date
12,274,720
18,635,742
16,740,790
29,859,110
10,479,175
8,597,329
96,586,866
Assets available to satisfy all liabilities and cover loan-associated commitments include cash balances with the Central Bank, Due from banks, treasury bills and other governmental securities, loans and facilities to banks and customers. A percentage of loans to customers that are due to be repaid within a year are extended during the normal activity of Bank NXT in addition to that, there is a mortgage of some debt instruments, treasury bills and other government securities to guarantee obligations and Bank NXT has the ability to satisfy the unexpected net cash flows by selling securities and finding other financing sources.
* Assets shown in the table represent the undiscounted cash flows in accordance with the contractual maturity date.
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Capital management
The Bank's objectives on managing capital, which include other elements in addition to the equity shown in the balance sheet, are as follows:
- Compliance with the legal requirements of capital in the Arab Republic of Egypt.
- Protecting the Bank's ability to continue as a going concern and enabling it to continue generating income for shareholders and other parties dealing with the Bank.
- Maintaining a strong capital base that supports the growth of activity.
The capital adequacy and capital uses are daily reviewed according to the requirements of the Central Bank of Egypt by the Bank's management, through forms based on the guidelines of the Basel Committee on Banking Supervision. The required data are submitted and provided to the Central Bank of Egypt on a quarterly basis.
The Central Bank of Egypt requires the Bank to do the following:
- Maintain 5 billion Egyptian pounds as a minimum for issued and paid-up capital.
- Maintain a ratio equal to or more than 12.5% between the elements of capital and the elements of assets and contingent liabilities weighted by risk weights.
In accordance with the requirements of the Central Bank of Egypt to update the position of the banking sector with regard to the capital adequacy ratio according to Basel II decisions.
The numerator of the capital adequacy ratio consists of the following two tiers:
Tier I after disposals includes the following:
Some of the items that will be deducted/ will not be considered and mentioned in the "supervisory instructions on the minimum ratio of capital adequacy", Chapter II on the capital base will be dealt with later as stated in the instructions.
- Continuing core capital after disposals (CET1-Common Equity).
- Additional core capital
There are some items that will be deducted/ not considered and mentioned in the "supervisory instructions on the minimum ratio of capital adequacy", Chapter II on the capital base. These items are deducted from the continuous core capital if the balance is negative, while they are not considered if it is positive.
Tier II after disposals
It includes 45% of the special reserve, loans and subordinated deposits within the limits of the prescribed percentage, as well as the considerable provisions required against the debt instruments, loans, credit facilities and contingent liabilities included in the first stage (Stage 1).
The capital adequacy ratio model includes some important notes and points which are as follows:
1. Reserves: include legal, general, statutory, supportive and capital reserves only.
2. The "general risk reserve" is formed on the beginning date of the application of International Financial Reporting Standard (IFRS 9), in accordance with the supervisory instructions issued to banks on 26 January 2019. It includes the special reserve - credit, the general bank risk reserve - credit and the reserve risk of standard (9), considering that in the subsequent periods of application, the Bank shall abide by what is stated within the instructions on minimum capital adequacy ratio "which is not to consider the bank risk reserve when calculating the ratio."
34 Financial risk management (continued)
34.2 Risk management framework in Bank NXT (continued)
Capital risk (continued)
The numerator of the capital adequacy ratio consists of the following two tiers (continued):
Tier II after disposals (continued)
3. The values of accumulated other comprehensive income items, whether they are positive or negative, are considered.
4. Interim profits/ (losses): It is allowed to record the net interim profits within the capital base after the limited inspection report prepared by the auditor on the Bank's financial statements on a quarterly basis. As for the interim losses, they are presented without any conditions.
5. It does not include the part related to credit, and the explanatory instructions of the rules on the preparation and presentation of the financial statements issued by the Central Bank in April 2009, page 7, item (9) must be perused.
6. It should not exceed 1.25% of total assets and contingent liabilities weighted for credit risk, provided that the required provisions against debt instruments, loans, credit facilities and contingent liabilities included in the Stage 2 and Stage 3 are sufficient to meet the obligations for which the provision is formed.
7. "The value of exceeding the limits set for investments in countries, weighted by risk weights."
8. This value must be included in accordance with Form No. 720 related to investments in countries abroad, taking into account that the value of the capital base listed in the aforementioned statement must be adjusted according to the calculated value.
· The continuing core capital after the regulatory adjustments is Clause 1.1 before excluding contributions to financial companies (shares or investment funds) represented in Clause 1.3.1.1.
· Continuing core capital before regulatory adjustments means paid-up capital, reserves, retained earnings, general risk reserve, and accumulated other comprehensive income items net of goodwill and treasury shares.
· Subordinated loans (deposits): provided that they do not exceed 50% of Tier I after disposals and that 20% of its value is consumed in each of the last five years.
Financial leverage ratio
The Board of Directors of the Central Bank of Egypt, in its session held on 7 July, issued a decision approving the supervisory instructions related to the financial leverage, besides the banks' compliance with the stipulated minimum percentage (3%) on a quarterly basis, as follows:
- As an indicative percentage as of the end of December 2015 until the year 2017.
- As a compulsory supervisory percentage as of 2018.
This is in preparation for the consideration of it within the first pillar of Basel decisions (the minimum capital adequacy ratio) for maintaining the strength and integrity of the banking sector and keeping pace with the best international control practices in this regard.
The financial leverage reflects the relationship between Tier I of capital used in capital adequacy ratio (after disposals) and the Bank's assets (inside and outside the balance sheet) unweighted with risk weights.
This is in preparation for considering their acceptance as part of the first pillar of the Basel Accords (the minimum capital adequacy standard) with the aim of maintaining the strength and stability of the banking system and aligning with the best international supervisory practices in this regard.
The leverage ratio reflects the relationship between capital tier one used in the capital adequacy standard (after disposals) and the bank's assets (on and off the balance sheet) unweighted with risk weights.
35 Fair values and classifications of financial assets and liabilities
Financial instruments measured at fair value
Bank balances
The fair value of one-day variable-rate placements and deposits represent their present value, and the expected fair value of variable-rate deposits is estimated based on the discounted cash flows using the interest rate prevailing in the capital markets for debts that have similar credit risk and maturity date.
Loans and facilities to banks
Loans and facilities to banks represent loans other than bank deposits. The expected fair value of loans and facilities is the discounted value of future cash flows expected to be collected and the cash flows are discounted using the current market interest rate for determining the fair value to determine the fair value to meet all the requirements. This includes replacement of funds on maturity or upon being lent to customers. The Bank is present in global money markets to achieve this objective.
Funded facilities to customers
They are recognized at net value after deduction of provision for impairment loss. The expected fair value for these loans and facilities represents the discounted value of estimated future cash flows expected to be collected. Cash flows are deducted using the current interest rate in the market to specify the fair value.
Investments in securities
Assets through other comprehensive income or profit or loss are carried at fair value. The fair value is determined based on market prices. If such data is not available, fair value is estimated using prices of capital markets for traded securities with similar credit characteristics, dates of maturity and rates.
Due to other banks and customers
The estimated fair value of deposits with undefined maturity date including interest bearing deposits is the amount to be paid upon request. The fair value of fixed interest deposits and non-current other loans are determined in an active market based on discounted cash flows using the interest rate on new debts with similar maturity dates.
Issued debt Instruments
Total fair value is calculated based on prices ruling in the capital markets. For securities with no active markets, discounted cash flow model is used based on the current rate appropriate with the remaining period to date of maturity.
Financial instruments not measured at fair value
Financial investments at amortized cost
They include held-to-maturity financial investments that are listed in the market and are measured at amortized cost in case of bonds, and with respect to investment funds, the evaluation is done at the recoverable amount (fair value).
Management believes that the fair value is not materially different from the carrying amount of these assets.
Due from banks
The fair value of one-day variable-rate placements and deposits represent their present value, and the expected fair value of variable-rate deposits is estimated based on the discounted cash flows using the interest rate prevailing in the capital markets for debts that have similar credit risk and maturity date.
35 Fair values and classifications of financial assets and liabilities (continued)
Loans and facilities to banks
Loans and facilities to banks represent loans other than bank deposits. The expected fair value of loans and facilities is the discounted value of future cash flows expected to be collected and the cash flows are discounted using the current market interest rate for determining the fair value. Loans and facilities are presented net of provision for impairment losses.
Fair value measurement - fair value hierarchy:
The fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Group determines fair values using other valuation techniques.
For financial instruments that trade infrequently and have little price transparency fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions another risks affecting the specific instrument.
Fair values of financial instruments
a) Valuation models
The Group measures fair values using the following fair value hierarchy, which reflects the significance of the inputs used in making the measurements. Th Group has an established control framework with respect to the measurement of fair values.
This includes a valuation team that has overall responsibility for overseeing a significant fair value measurements, including level 3 fair values, and report to the management.
The valuation team regularly reviews significant unobservable inputs an valuation adjustments.
If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.
Significant valuation issues are reported to the Group Audit Committee. When measuring the fair value of an asset or liability, the Group uses mark observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
Level 1: inputs that are quoted market prices (unadjusted) in active markets of identical instruments.
Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derive from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted price for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data.
Level 3: inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
35 Fair values and classifications of financial assets and liabilities (continued)
Fair values of financial instruments (continued)
b) Financial instruments measured at fair value
The following tables analyses financial instruments measured at fair value at the reporting date, the amounts are based on the values recognized in the statement of financial position:
Carrying amounts
Fair value level
31 December 2025
Designated at FVTPL
Amortized cost
Designated at FVOCI
Total
Level 1
Level 2
Level 3
Total
Financial assets measured at fair value:
Mutual fund certificates (notes 6 and 9)
12,322,103
-
137,412
12,459,515
-
385,541
12,073,974
12,459,515
Equity securities (notes 6 and 9)
92,504
-
1,205,839
1,298,343
68,578
-
1,229,765
1,298,343
Structured notes (notes 6 and 9)
13,987,720
-
-
13,987,720
-
13,987,720
-
13,987,720
Treasury Bills (notes 6 and 9)
1,819,431
-
11,277,728
13,097,159
-
13,097,159
-
13,097,159
Debt instruments (notes 6 and 9)
6,184,413
-
8,137,503
14,321,916
14,321,916
-
-
14,321,916
34,406,171
-
20,758,482
55,164,653
14,390,494
27,470,420
13,303,739
55,164,653
Financial assets not measured at fair value:
Cash and cash equivalents (note 5)
-
46,767,027
-
46,767,027
-
-
-
-
Loans and advances to customers (note 8)
-
78,128,024
-
78,128,024
-
-
-
-
Accounts receivable (note 7)
-
17,672,952
-
17,672,952
-
-
-
-
Investments at amortized cost (note 11)
-
17,404,066
-
17,404,066
-
-
-
-
Other assets (note 15)
-
8,963,377
-
8,963,377
-
-
-
-
-
168,935,446
-
168,935,446
-
-
-
-
Financial liabilities measured at fair value:
Accounts payable-Customers credit balances at FVTPL (note 18)
13,987,720
-
-
13,987,720
-
13,987,720
-
13,987,720
Financial Liabilities not measured at fair value:
Due to banks and financial institutions
-
34,586,591
-
34,586,591
-
-
-
-
Customer deposits
-
79,322,035
-
79,322,035
-
-
-
-
Loans and borrowings
-
15,104,080
-
15,104,080
-
-
-
-
Creditors and other credit balances
-
10,841,107
-
10,841,107
-
-
-
-
Account payable-customer credit balances
-
23,136,225
-
23,136,225
-
-
-
-
Issued bonds
-
3,909,625
-
3,909,625
-
-
-
-
-
166,899,663
-
166,899,663
-
-
-
-
35 Fair values and classifications of financial assets and liabilities (continued)
Fair values of financial instruments (continued)
b) Financial instruments measured at fair value (continued)
Carrying amounts
Fair value level
31 December 2024
Designated at FVTPL
Amortized cost
Designated at FVOCI
Total
Level 1
Level 2
Level 3
Total
Financial assets measured at Fair Value:
Mutual fund certificates (notes 6 and 9)
12,031,837
-
301,572
12,333,409
171,436
253,240
11,908,733
12,333,409
Equity securities (notes 6 and 9)
179,333
-
301,995
481,328
154,670
0
326,658
481,328
Structured notes (notes 6 and 9)
7,901,466
-
-
7,901,466
-
7,901,466
-
7,901,466
Treasury bills (notes 6 and 9)
-
-
7,566,076
7,566,076
-
7,566,076
-
7,566,076
Debt instruments (notes 6 and 9)
3,376,038
-
4,204,575
7,580,613
7,580,613
0
0
7580613
23,488,674
0
12,374,218
35,862,892
7,906,719
15,720,782
12,235,391
35,862,892
Financial assets not measured at fair value:
Cash and cash equivalents (note 5)
-
51,540,737
-
51,540,737
-
-
-
-
Funded facilities to customers (note 8)
-
27,835,026
-
27,835,026
-
-
-
-
Banking loans and facilities (A) (note 8.1)
-
30,093,577
-
30,093,577
-
-
-
-
Accounts receivable (note 7)
-
15,773,382
-
15,773,382
-
-
-
-
Investments at amortized cost (note 11)
-
12,487,545
-
12,487,545
-
-
-
-
Other assets (note 15)
-
6,583,336
-
6,583,336
-
-
-
-
-
144,313,603
-
144,313,603
-
-
-
-
Financial liabilities measured at fair value:
Accounts payable-Customers credit balances at FVTPL (note 18)
7,901,466
-
-
7,901,466
-
7,901,466
-
7,901,466
Financial Liabilities not measured at fair value:
Due to banks and financial institutions
-
22,762,916
-
22,762,916
-
-
-
-
Customer deposits
-
67,208,585
-
67,208,585
-
-
-
-
Loans and borrowings
-
11,489,567
-
11,489,567
-
-
-
-
Creditors and other credit balances
-
11,130,638
-
11,130,638
-
-
-
-
Account payable-customer credit balances
-
20,566,943
-
20,566,943
-
-
-
-
Issued bonds
-
1,432,665
-
1,432,665
-
-
-
-
-
134,591,314
-
134,591,314
-
-
-
-
36 Subsequent events
In late February 2026, the US and Israeli hostilities against Iran escalated materially. Public market and specialist reports indicate that commercial shipping through the Strait of Hormuz - a chokepoint that normally carries around one fifth of global oil and a significant share of Liquefied Natural Gas flows - has been severely disrupted, with tanker traffic largely paused and war risk insurance premiums elevated. Spot crude benchmarks exhibited sharp volatility during March 2026, with intraday Brent prices briefly approaching $100-$119/bbl, while major carriers rerouted or suspended certain Middle East services as security conditions deteriorated.
These developments arose after 31 December 2025 and therefore represent a non-adjusting subsequent event under IAS 10 (Events after the Reporting Period). The Group has not adjusted the amounts recognized in these 2025 financial statements. Management is monitoring second order effects on clients and portfolios - including market valuations - and has activated the assessment of enhanced monitoring of credit risk (ECL overlays) and fair value sensitivities for 2026 internal reporting cycles.
While the situation remains fluid and may affect the Group's financial performance and risk profile during 2026, management has not identified a material uncertainty that would cast significant doubt on the Group's ability to continue as a going concern. The Group will continue to reassess macroeconomic assumptions including market liquidity) and update internal overlays as appropriate.
Given the evolving circumstances and depending on how quickly this on conflict can be resolved, the financial effect of these events cannot be reliably quantified at this time.
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