E-Finance starts the year “on a high note:” State-owned fintech giant e-Finance’s net income after non-controlling interest rose 64% y-o-y in 1Q 2024 to EGP 462.5 mn, according to its latest earnings release (pdf). Revenue rose 49.6% y-o-y to EGP 1.1 bn, driven by a strong performance across the company’s subsidiaries, especially its flagship Digital Operations

Driving the trend: e-Finance’s Digital Operations contributed the lion’s share (89%) of the group’s revenues for the quarter. The subsidiary saw its top line increase of 43.8% y-o-y to a little over EGP 1 bn, on strong results “across its cloud hosting services, its transaction revenue, and its build & operate services.”

Acquisitions in the works: “Our investment strategy remains focused on expanding our presence in the payments sector. Toward this objective, we are in the final stages of two strategic investments in strategic companies. Upon completion, these investments are poised to offer additional avenues for delivering value-added services to our clients, solidifying our leading position in Egypt's digital payments landscape,” the chairman Ibrahim Sarhan said.

ICYMI- e-Finance has been in talks to acquire two retail-focused digital payments companies, the first of which was approved by the board in November 2023.

MACRO CHALLENGES WEIGH ON CONTACT’S EARNINGS-

Contact Financial’s bottom line drops in 1Q 2024: Non-banking financial services firm Contact Financial’s normalized net income dipped 68% y-o-y in 1Q 2024 to EGP 57.4 mn, according to the company’s earnings release (pdf). The drop came on the back of macroeconomic headwinds, which weighed on the company’s financing division.

In detail: Net income at the NBFI’s financing division fell 83% y-o-y to EGP 20 mn on the back of the company’s decision to delay a part of its portfolio transfer activities — a significant source of revenue — due to an unfavorable interest rate environment. Additionally, interest rates and product price instability triggered a slowdown of issuances at Contact’s Auto and Consumer Finance segments, driving down new financing 38% y-o-y to EGP 2.6 bn.

The ins. division fared better: Net income at the ins. division rose 45% y-o-y to EGP 36 mn thanks to robust results at Sarwa Life and Sarwa Ins., whose total gross written premiums grew 59% y-o-y to a combined EGP 696 mn during the quarter.

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