Housing & Development Bank€¦ · Investor Presentation Half Year 2019 9 Month-2019 November 2019. ... HDB`s ESOP First time non-Egyptians allowed ownership of HDB shares; their

Housing & Development Bank

Investor Presentation Half Year 20199 Month-2019

November 2019

Disclaimer• In this presentation Housing and Development Bank (HDB) may make forward

looking statements, including, for example, statements about management’s expectations, strategic objectives, growth opportunities and business prospects. Such forward looking statements by their nature may involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by these statements. Examples may include financial market volatility; actions and initiatives taken by current and potential competitors; general economic conditions; and the effect of current, pending and future legislation, regulations and regulatory actions. Furthermore, forward looking statements contained in this document that reference past trends or activities should not be taken as a representation that such trends or activities will continue.

• Housing and Development Bank (HDB) does not undertake any obligation to update or revise any forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward looking statements, which speak only as of the date on which they are made.

• This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or interests described within it in any jurisdiction. We strongly advise potential investors to seek financial guidance when determining whether an investment is appropriate to their needs.

Note: Rounding differences and figures may appear through out the presentation.

2

Content

• Historical overview• Business review• Financial review Stand Alone• Stock • Coverage • Contact Us

3

A progressing commercial bank with an attractive real estate flavor; your window on

two sectors

4

Historical overview

5

Our Start

• Egypt’s Housing & Development Bank was established40 years ago; in 1979, as an arm of the Ministry ofHousing. At the time of its launch it had a clear mandateto finance moderate housing units for Egyptians, whilealso bridging the gap between supply and demand in thenation’s real estate market.

• By the late 1980s & 1990’s HD Bank had alreadysuccessfully concluded many flagship developments,which brought new housing units to many urbancommunities and strategic investments in the country’snorthern coastal resorts.

6

Ownership Structure

7

29.81%

5.03%8.92%

8.29%7.41%

6.32%

9.74%

24.4800%

Shareholders Structure

New Urban Communities Authority (NUCA) Egyptian Endowment Authority

Misr Life Insurance Company Misr Insurance Company

Housing Projects Fund Ali Ben Hassan El Dayekh

REMCO Egypt - Abdel Moneim El Rashed Free Float

5.03%

Our Transformation

8

• In 2003, Egyptian banking law 88 prohibited the existence of specialized banksin Egypt, and HDB was restructured to become a conventional Commercialbank, with a new management appointed. The bank nevertheless still ownsseveral plots of land which will be developed into commercial and residentialprojects for sale.

• The New Management implemented a five-year plan to turnaround the bank thatstarted in 2003 till 2008 and in 2009 a new 5 year plan was set in place till 2013.However, due to the political & economic situation the implementation time linewas extended till 2017. Then a new 5 year plan focused on heavily investing innew IT systems, renovating its branch network and increasing its marketingefforts. HDB currently has a branch network of 88 branches based on Full YearQ3-2019. Plus, a new 5 year Strategic plan from 2018 till 2022 was set in action.

As a result we became: • A growing commercial bank in the Egyptian market.• Upgraded the human capital of quality to support the growth of both thebanking and real estate businesses and capitalizing on strong ICT Platform.

• New Bank products and Real Estate Projects continue to be the key atincreasing our growing client base & performance based on top notch IT.

Our Journey

Founded in 1979 as a specialized entity for

real estate development &

provision of housing units to different sectors of the economy

Initial capital of

EGP 18mn

Registered on

EGX in 1983

Continued growth of real estate

investments

1993: raised

paid-in capital

to EGP

54mn

2000: raised paid-in capital to

EGP 122.3mn

through existing shareholders

2003: Introduction of new bankinglaw Bank restructured,

increased focus on growth of core

banking business

Further expansion in real estate

development to be carried

out through subsidiaries

In 2006 provided an integrated banking system to cater to the retail sector

Raised: paid-in capital increased to EGP 500mn through existing shareholders

In 2009 investment in Hyde Park Development

Paid-in capital

increased to EGP 1.2bn

through a private placement and

portion through HDB`s ESOP

First time non-Egyptians allowed

ownership of HDB shares;

their ownership reached 20%

Vitalized the

corporate identity

campaign

Introduction of stage I of the

new IT system to streamline performance

Increased

street visibility through increased

branches, ATMs and

POS

Increased real

estate activities,

investment reached

EGP 912 mn

1979 1993 2003 2006 2010 2013

9

2014

Participation in

the CBE Mortgage Finance Initiative

for Medium & Low Income

Housing

Increased street

visibility through increased

branches, ATMs and POS

Started the restructuring of

Hyde Park Development after using the

Equity Associate method

Our Journey

10

2015

Participation in the CBE Mortgage Finance Initiative for Medium & Low Income Housing and becoming number 1 market share among peers.

Increased street visibility through increased branches, ATMs and POS

2016

Participation in the CBE SME’s lending initiative that lends loans with a subsidized 5% interest rate.

Market Leader in CBE Mortgage Finance Initiative with EGP 2,0 Billion as of Full Year 2016

2017

Participation in the CBE SME’s lending initiative that lends loans with a 5% interest that have reached 12% out of the 20% required by 2019.

Allotted another EGP 1 Billion under the CBE Mortgage Finance Initiative reaching a total of EGP 3,6 Billion.

2018

Allotted another EGP 1,3 Billion under the CBE Mortgage Finance Initiative reaching a total of EGP 4,9Billion to more than 54,309 clients.

9 Month 2019

Allotted another EGP 300 million under the CBE Mortgage Finance Initiative reaching a total of EGP 5,340 Billion to more than 58,620 clients.

Board of Directors

11

Egyptian Awkaf

Organization

1 Member

New Urban Communities Organization

4 Members

Misr Insurance Company

1 Member

Housing Financing

Fund

1 Member

Misr For Life Insurance

1 Member

Vice Chairman& Managing

Director (Executive)

Hassan Ghanem

IndependentBoard

Member

1 Member

Chairman

Fathy El Sebai

Total Number of 11 Board Members

• Board composition: 1 Executives and 10 Non-Executives

• 9 Board Committees meeting on a regular basis, namely:

Ø Audit Committee

Ø Risk Committee

Ø Remuneration Committee

Ø Governance & Nomination Committee

Ø Executive & Operational Committee

Ø Investment Committee

Ø Engineering Committee

Ø IT Enhancement Committee

Ø CSR & Donations Committee

• Remuneration Committee comprised of the main shareholders and independent Board Members

• Independence of Compliance, Internal Audit and Risk Management functions

• Functioning Committees ensure that HDB Management fully complies with all regulatory requirements as well as internal policies ensuring strict adherence to best practices with respect to our Stake holders like clients, employees and third parties dealings.

12

Corporate Governance

Our Organization Chart

Chairman

Remuneration Committee

Executive Committee Assistant Managing Director

for Engineering & Investments

Investment Committee

13

Board Affairs

Audit Committee

Governance & Nomination Committee

Board Of Directors

Technical Office

Risk Committee

Engineering Committee IT Enhancement Committee

CSR & Donations Committee

Assistant Managing Director for Corporate Banking, Treasury &

Syndications

Head of Legal Department

Assistant Managing Director for Retail

Banking

Vice Chairman & Managing Director

Assistant Managing Director for Banking

Operations

Mortgage Finance Department

Planning & KPI Department

Security Department

PR & Marketing Department

Financial Department

Human Resources

Department

National Housing Projects Department

National projects Digital Reservations

Department

Support & Follow Up Department

Financial Control Department

Investor Relation Department

Customer Protection

Department

CRO

IT Security & Governance

Internal Audit

Corporate Governance

What We Aim For

Our VisionTo be within the top 10 ranked commercial banks in Egypt,while maintaining the current high operational efficiency.Our MissionSearch for excellence in providing our commercial & realestate products through the continuous upgrade of ourhuman capital and we strive to excel in providing ourservices to meet our clients and shareholdersexpectations.

14

Our Strategy

Accelerate Overall

Banking Growth

HDB Strategy

Capitalize On Our Housing Reputation To Attract

New Clients Into Our Banking Business

Increase Customer

Base

Provide Integrated Real Estate

Services

Maximize Profitability

Continued Customer

Satisfaction

Provide Integrated Real Estate Services

Construction and sale of housing units through affiliated companies

Provide real estate financing

Supervision of implementation of housing projects

Real estate business appraisal

Capitalize On Our Housing Reputation To Attract New Clients Into Our Banking Business

Capitalize on our reputation and experience in providing full range of housing and property development services plus the current banking retail client base to attract new SME’s costumers to our banking services.

Increasing Customer Base

Enhance corporate lending, increase SME’s financing whether through tailored loans, or shelf products. Improve client access through increased street visibility, introducing a wider variety of short, medium and long term saving schemes

Continued Customer Satisfaction

Introducing new products to capture targeted growth in both banking and real estate business

15

Our Products Range

Retail Products

Current accounts

Saving products

Loan products

Debit/Credit /Prepaid Cards

Life insurance services

Safe deposit boxes

Payroll services

Vodafone cash

Housing installment and e-payments

Corporate Products

Credit facilities

Trade finance

Limited investment banking services

e-payments

Financing customs & taxes

Specialized services to SMEs

Treasury & cash management

Financing customs & taxes



Real Estate Products

Real estate financing

Real estate investment & development*

Construction of housing units*

Supervision of implementation of the projects owned by HDB & others * (NUCA)

Real Estate consulting andengineering services**

Business appraisal and feasibility studies**

• *Through HDB’s subsidiaries & affiliates• ** Through the bank investment & Real Estate

16

SME’s Products

Credit facilities

Trade finance

e-payments

Financing customs & taxesFinancing customs & taxes



Our Way Forward

Introduction of Internet, Online and Mobile

banking services to the bank clients in 2019

Increasing planned branch network set to

capture a greater portion of retail

business to reach 100 branches by end of 2020

Increase Loan & Deposit Books coupled with the participation in

the CBE SME’s & Mortgage Finance

Initiatives

Hidden equity; around 2 million sqm of

undeveloped land carried at an average cost of EGP 750/msq

Trading at Price to Book of around (P/B 19) 1 &

Price to earnings (PE)of around 3.8 as estimated

for full year 2019

HIGH GROWTH PROSPECTS OVER THE NEXT FIVE YEARS

17

Business Review

18

Housing & Development Bank

Banking Business Real Estate Business

HDB has direct and indirect ownership positions in 17 subsidiaries and sister companies; total EGP 1,663,314,124 million as of Q3-2019 and ownerships range between 16% to 92% with activities including:• Mortgage finance• Property development • Property management services• Insurance• Real estate development • Management of real estate funds• Leasing Finance

Investment Business

Includes some subsidiaries & sister companies

Our Business Model

19

Our HDBK Group Structure

20

Housing & Development Bank Group

Housing & Development Co.

For Real Estate Investment

60% Ownership by HDBK

EL-Tameer Co. For Housing & Utilities


City Edge Development

38% Ownership by HDBK El-Tameer Co. For Security & care services


El-Tameer Co. For Mortgage Finance

24.80% Ownership by HDBK

El-Tameer Co. For Asset Management


El-Tameer Co. For Real Estate Investment Funds


HD Company For Trading Securities


Tameer Co. for Real Estate Investment Development


El-Tameer Co. For Financial & Real Estate Marketing


El-Tameer Co. For Technological services


Obelisk for investment fund management

30% Ownership by HDBK Hyde Park Co. for Real Estate Development


38%

51%

76%

31%

21% 51%

60%

60%

51%

18.2%

• Blue Line elaborate Bank Direct Investment

• Red Line elaborate Holding Company Investment

2%

EL-Tameer Co. For Security & Money Transfer


Holding Co . For Investment &

Development




El-Tameer Co. For Security & care services


EL-Tameer Co. For Security & Money Transfer


Tameer Co. for Real Estate Investment Development


El-Tameer Co. For Financial & Real Estate Marketing


El-Tameer Co. For Technological services


Hyde Park Co. for Real Estate Development




El-Tameer Co. For Security & care services


Our Equity Investments

21

Serial Company Name Participation Direct & Indirect Value in EGP

Subsidiaries 1 * Holding Co . For Investment & Development

92%460,000,000

2 Housing & Development Co. For Real Estate Investment 94.96%

180,000,000

Sister Companies

3 EL-Tameer Co. For Housing & Utilities 35% 5,250,000

4 El-Tameer Co. For Mortgage Finance 24.83% 175,161,370

5 El-Tameer Co. For Asset Management 62.62% 942,000

6 El-Tameer Co. For Security & care services 94.82% 1,521,000

7 El-Tameer Co. For Real Estate Investment Funds 93.83% 4,800,000

8 El-Tameer Co. For Financial & Real Estate Marketing 94.20%

2,178,158

9 El-Tameer Co. For Technological services 86.92% 4,000,000

10 Tameer Co. for Real Estate investment Development 92.77%

74,000,000

11 HD Co . For trading securities 48.09% 1

12 Obelisk for investment fund management 49.32% 113 City Edge Development 39.52% 491,473,00014 Misr Sinai Tourism Company 30% 1

15 El Tameer Company for Security & Money Transfer 94.82% 6,000,000

16 Gardien Leasing Company 78% 59,366,343Company Name Participation % Value in EGP

Equity 1 Hyde Park Real Estate Co. For Development 53.66% 198,622,250Total 1,663,314,124

HDB Financials Components

• Based on the above HDB has 2 kinds of financial:1- Standalone Financials: which compromises of the bank commercial activity & Real Estate that is 100% owned by bank.

2- Consolidated Financials: which compromises of the bank standalone & all investment activity in sister, subsidiaries and equity associates companies.

22

Real Estate Business Model Two Real Estate Models within HDB: • Model One: Projects directly under HDB 100% ownership being sold only after the total

completion of construction and mainly for lands allocated to the bank before the 2003 banking law.

• Model Two: Projects that are owned by subsidiaries that are sold off Plan or during the construction phase.

In both Models revenue is recognized & recorded upon delivery of units.

23* All sales will be done at current market prices

Ready to Sell Units across Projects 100% Owned by HDB For Q3-2019

Q3- 2019

Project Name Description Segment Total Number of Units Sold Units Avalaible Units

for Sale

October - El Montazah - Phase 1&2&3 Residential Middle 900 801 99

New Cairo - Acacia - Phase 1 &2 &3 Residential Upper Middle 813 519 294Ganat El Obour Residential & Commercial Economic 1620 1617 3

El Arish City Residential Economic 184 4 180Qena Governerate Residential Economic 252 246 6

Administrative Building Plot 28 Office Upper Middle Leased

New Cairo - Palma Residential & Commercial Economic 95 16 79Administrative Building- SOHAG Residential & Commercial Economic 51 5 46

Hurghada Residential & Commercial 174 1 173Diffierient Sites Residential & Commercial 76 17 59

4,165 3,226 939

Potential Upside of Revenue & Profit

24* All plots will be developed and sold as final product with current market price

HDBK Land Bank* as of Q3-2019

Item

Cost EGP Million Land Area square meter

6 October Project El Montazah - Phase 2 and 3 654,150 3,115

New Cairo - Acacia - Phase 2&3 29,847,940 6,800

Hurgada - Red Sea Land 6,413,588 5,742

El Korum Street Land Number 24 - Office Building 26,617,810 748.85

Helwan Land 125,055,798 105,000

Total 188,589,286 121,406

25

Potential Upside of Revenue & Profit

Work In Progress as of Q3-2019

Project Name Type of Units Number of

Units Value in Million EGP

Hurgada - Industrial Zone Apartments 140 35,886,814

Hurgada Commercial Buliding 102,232

El Gawahara - Port Said Apartments 294 72,799,132

Acacia – Commercial Mall Commercial Buliding 25,349,535

6 October South District Commercial Buliding 12,063,896

Koroum Office Building Commercial Buliding 3,799,582

434 150,001,191

26

55 58 59 59 61 62 64 6880 84 86 86 88

64 64 65 65 68 68 68 70 71 71 72 74 75

98114 118 120

152 156 156 174

224 230 235 235

264

0

50

100

150

200

250

300

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Branches P.O.S A.T.M

Our Bank Visibility

Financial Review Stand Alone

27

28

• Total Number of Issued Shares is 126,500,000 million with a book Value of EGP 10

• HDB is listed & traded on the Egyptian Stock Exchange (EGX)• Last Div. / Ex. Date EGP 1.5 on 23rd May 2018 for full year 2017• Est. Free Float 39.9%

Our Bank Financial Snap Shot

0

200

400

600

800

1000

1200

1400

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3-2019

Paid in Capital

Our Bank Standalone Financials

29

Bank Standalone Financials 1/1/2019 till 30/9/2019 On 1/1/2018 till 30/9/2018

10.73

1,520

1,874

289220

2,126

4,879

9.84

1,394

1,876

370205

2,385

4,625

9.0%9.0%

-0.1%

-21.9%

7.3%

-10.9%

5.5%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0.00

1000.00

2000.00

3000.00

4000.00

5000.00

6000.00

Earnings Per ShareNet profit for theyear

Net profit for theyear before taxes

Housing projects'profits

Net fees andcommisions income

Net interest incomeInterest FromLoans & Similar

Income

1/1/2019 - 30/9/2019 1/1/2018 - 30/9/2018 Y-o-Y

EGP million

30

Capital Adequacy Ratio

Capital increase: EGP500mn to

EGP1.2bn

Return on Assets & Equity

13.7%

24.2% 24.2% 25.5% 25.2%23.7%

21.62%

20.6% 19.8% 18.6%16.58%

13.76%17.22%

21.0%17.18%

19.95% 20.74%

0%

5%

10%

15%

20%

25%

30%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019Tier 1 Capital to Basel I Tier 1 Capital to Basel II

29.1%

11.2%9.4%

11.8% 13.2%15.8%

19.9%23.0%

30.2%33.3%

12.8%

20.7%

27.0%

2.3% 1.6% 1.3% 1.7% 1.7% 1.4% 1.9% 2.0%2.1% 3.4%

1.3% 2.2% 3.1%

0%

5%

10%

15%

20%

25%

30%

35%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Return on equity Return on assts

Our Bank Stand Alone Financial Snap Shot

31


34.9%37.1%38.7%

47.1%

40.0%42.0%

56.0%

62.0%

54.0%51.5%

47.0%

42.0%44.0%

65.1%62.9%

61.3%

52.9%

60.0%

75.3%73.0% 74.0%

74.0%

69.0%

61.0%

67.0% 68.0%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Net operating margins Cost / Income ratio

Unusually high TB rates & auction

land sales distort ratios

Net Operating Margins & Cost to Income Ratios

32

1,1461,242 1,265 1,546 1,537 1,770

2,566

3,632

5,715

7,109

2,021

3,967

5,814

882 1,012 1,062 1,244 1,202 1,332

1,891

2,712

4,226

4,914

1,239

2,653

3,940

264 230 203 302 335 438 674920

1,489

2,195

773

1,314

1,874

244 203 176 206 247 306 492 6441,075

1,625

6121,072

1,520

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Total Revenue Total expenses Net profit before tax Net profit After tax

EGP million


Net ProfitConsistent Annual Net Profit Growth

Cost to Income Ratio Calculated like Market

33


1,861,221,533

2,578,016,126 2,554,512,805

3,632,391,994

5,715,596,734

2,021,270,915

2 021 270 915

3,759,291,590

5,814,777,257

497,407,655 632,305,929

1,073,100,942

1,645,620,907

2,066,412,394 1,924,450,070

426,620,607763,914,033 1,158,980,964

26.72%24.53%

42.01%45.30%

36.15%

95.2%

21.1% 20.3%19.9%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Revenue Cost to Income Mkt Percent

34

EGP million

Our Bank Stand Alone Financial Snap Shot Development of Assets

31,965

14,037 13,004 14,59212,657

21,248

25,335

31,965

2,149 2,622 3,981 3,584 4,6078,835

11,08714,247

33463

25,402

14,769 15,164 16,702

1,822 2,2822,095 2,195

2,570

4,3225,039

6,135

4742

6,162

15,650 15,372 12,839

390630

904 9441,004

1,056

1,100

1,127

1038

917920 933

995

92112

132 154152

161

242

310

509

696729 845 887

374447

278 366235

360

361

833

745

1,004 1,140 1,251 1,631

5,7926,563

6,646 5,7606,023

6,514

7,506

9,313

11439

13,610 14,484 14,855 16,550

0

10,000

20,000

30,000

40,000

50,000

60,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Cash,Mkt.Securities&T-Bills Investments Real Estate Activity Fixed Assets Other Net Loans

10,619

47,791 47,692 48,42049,630

51,936

35

Total Liabilities & Shareholder’s EquityEGP million


47,692

6,568 7,505 7,558 8,134 8,869 9,626 11,733 13,642

40,884

34,12236,502 37,223 38,814

1,796 1,671 1,553 1,455 1,310 1,2821,733

2,807

4,156

5,218 686 683658

745 957 980 886 896 1192541

940

206

1,1852,990 2,387

1,965

414870 904 938 963 982

1,208

1,574

2,297

3,610 3,512 3,9224,372

426503 1,891 442 1,400

6903

8855

11,731

2,675

2,336 2,688 2,8952,524

0

10,000

20,000

30,000

40,000

50,000

60,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Customer Deposits Long Term Loans (incl.subsidised) Other Inv

Reserves & Retained earnings Down Payments - Real Estate Other Obligation Taxes

12,657 14,037

21,250

10,617

31,959

51,526

31,993

13,00414,635

25,427

47,69248,420 49,630

47,791

36


Deposit Development EGP million

6,5687,505

7,558 8,134 8,869 9,62611,733

13,641

40,884

34,12236,501 37,223

38,813

26.6%

14.3%

0.7%7.6% 9.0% 8.5%

21.9%16.3%

81.3%

-17%

7.0%2.0% 4.27%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Deposits Deposits Growth

37


Deposit Composition & Growth YoYEGP million

5,819 6,171 6,9858,539 9,070

24,416

16,336 15,605

18,00816,495

2,314 2,697 2,640 3,1944,571

16,46817,786

20,89619,215

22,318

8,133 8,868 9,62511,733

13,641

40,884

34,122

36,501 37,22338,813

0%9% 9% 3%

16%

200%

-17%-1.3%

19.3% 15.7%

-50%

0%

50%

100%

150%

200%

250%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Retail Deposists Corporate Deposits Total Deposit Book Growth YoY

38

Loan Development


EGP million

6,1886,989 7,100

6,362 6,5887,100

8,207

10,456

13,409

15,68716,183

16,638

18,392

1.2%

12.9%

1.6%

-10.4%

3.6%

7.8%

15.6%

27.4%

28.2%

17.0%

14.5%

2.8%

10.5%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Total Loans Loan BookGrowth

39

EGP million


Development of Loan Book by Type

3,099 3,248 3,2602,702 2,831 2,780 2,908 3,193

5,865

7,0997,440 7,632

8,922

1,7462,202 2,290 2,118 2,123

2,6133,006

2,586 2,358 2,182 2,209 2,3472,700

1,318 1,523 1,534 1,525 1,617 1,6912,278

3,793

5,169

6,387 6,515 6,639 6,7476,189

6,989 7,1006,362 6,588

7,100

8,209

9,588

13,409

15,68716,183

16,638

18,392

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Corporate Retail Mortgage Credit cards Total

40


Loan to Deposit Ratio EGP million

6,5687,505 7,558 8,134 8,869 9,626

11,73313,642

28,114

34,122

36,501 37,22338,813

4,393 4,518 4,636 4,734 5,278

5,978

6,587

9,590

12,643

15,066 15,608 16,06317,822

66.9%

60.2% 61.3%58.2% 59.5%

62.1%

56.1%

70.3%

45.0%44.2% 42.8%

43.2%45.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Total Deposits Total Loans (Exluding Subsidized Loans) Loan to Deposit Ratio

41


42.5%

57.5%

Deposit Book Breakdown Q3- 2019

Retail Deposits Book Corporate Deposits Book

42


Loan Book Break Down – Q3-2019

51.5%48.5%

Retail Loan Book Corporate Loan Book

Our Bank Standalone Financials

38,813

17,822

45.9%

Loan to Deposit Ratio Q3-2019

Total Deposits Total Loans (Exluding Subsidized Loans)

44


NPL’sEGP million

61896989 7100

6362 65887100

8211

9590

12,643

15,06615,608

16,638

18,392

239 245 278 433 391 385 445 372 736 838 1144 1482 1,815

3.86%3.51%

3.92%

6.81%

5.94%5.42% 5.42%

3.88%

5.82% 5.56%

7.33%

9%

9.9%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Total Loans Non-Performing Loans Non-Performing to Total Loans

45

Net Interest Margin


1.1%1.4% 1.4%

2.1%

3.4% 3.6%

4.8%4.3% 4.3%

5.6%

4.9%

6.9%

4.9%4.40% 4.20%

7.80% 7.7%

6.90%

7.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Q1-2019

Q2-2019

Q3-2019

NIM

NIM

46


Net Interest income & Net Operating Margin EGP million

300 349 392584

465 501

1,028

1,690

2,544

3148

720

1,380

2,12644%

49%52%

65%

54%51%

47%

42% 44%

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0

500

1000

1500

2000

2500

3000

3500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

NII NOM

47

Our Bank Net Profit Breakdown 9 Month - 2019

Item Commercial Banking Activity Real Estate Activity Total

Total Revenue 5,398,151 416,626 5,814,777

Total Expenses (3,734,515) (205,345) (3,939,860)

Net Profit BeforeTaxes 1,663,636 211,281 1,874,917

Taxes (306,544) (47,538) (354,082)

Net Profit After Taxes 1,356,819 163,743 1,520,562

Contribution % 89.23% 10.77% 100%

Amounts in EGP Million Total Net Profit 1,520,562

48

Our Bank Participation in the CBEMortgage Finance Initiative

• The Central Bank of Egypt (CBE) Launched this initiative in May 2014 • The Total initiative amounts to EGP 20 Billion • This initiative started by that Mortgage Finance is given to low income clients

and Medium income clients• A new amendment took place mid 2016 including below low income clients

and above middle income clients • Our Bank requested to participate in this initiative with EGP 2 Billion • Actual dispensed amounts till end of Q3-2019 are EGP 5,340,381,0543

Million to 58,620 thousands clients by our bank • The spread that our bank receives is from 3.5% to 4.5% on actual amounts

dispensed

•The below low income clients ceiling is EGP 150 Thousands for a unit with 5% interest

•The low income clients ceiling is EGP 350 Thousands for a unit with 7% interest

•The Medium income clients ceiling is EGP 500 Thousands for a unit with 8% interest

•The above middle income clients ceiling is EGP 950 Thousands for a unit with 10.5% interest

CBE Mortgage Finance Initiative

49

Number of Units in Thousands

0

4,109 48612,528

212 180 257

12,147

2,341

6,670

11,303 117189,458

1179 1016 1438

45,253

143 308 230 153 278 16 0 1,12828 35 146 13 0 2222,484

6,978

15,670 16767

12,410

1420 1196 1695

58,620

0

10000

20000

30000

40000

50000

60000

70000

Total 2014 Total 2015 Total 2016 Total 2017 Total 2018 Q1-2019 Q2-2019 Q3-2019 Grand Total

Low Income New 5% Low Income 7% Middle Income 8% Above Middle Income 10.5% Total

CBE Mortgage Finance Initiative

50

Value EGP Million

0

288,403,026413027307

214,645,30817528061 15,618,200 21,858,517

971,080,419

131,656,818

495,863,370

919,678,1891136504616

923,039,474

115601771 100,715,682 146,983,886

3,976,579,878

30,482,500 74,038,146 53,574,592 38794842 92,322,999 4700588 0

293,913,667

10,015,810 13880783 74,750,567 6696000 0 105,343,160162,139,318

569,901,516

1,271,671,6171602207548

1,304,758,348

144526420 116,333,882 168,842,403

5,340,381,053

0

1E+09

2E+09

3E+09

4E+09

5E+09

6E+09

Total 2014 Total 2015 Total 2016 Total 2017 Total 2018 Q1-2019 Q2-2019 Q3-2019 Grand Total

Low Income New 5% Low Income 7% Middle Income 8% Above Middle Income 10.5% Total

Our Stock

51

Our Bank Fact Sheet

52

• Total Number of Issued Shares is 126,500,000 million with a book Value of EGP 10

• Coupon number 38 with a value of EGP 5 per Share will be distributed on Wednesday 17th April 2019 to shareholders until withheld or record date of Sunday 14th April 2019. The distribution will happen through Misr for Central Clearing, Depository and Registry (M.C.D.R)

Incorporation: Egypt

Sector: Banking & Financial Services

Full Listing: The Egyptian Exchange (EGX)

Issued Shares: 126,500,000

Free Float: 24.40%

Listing Date: 13th September 1983

Market Cap: Almost EGP 6.9 Billion

52 Week High: 61.82

52 Week Low: 41.11

53

Stock Data: Bloomberg / Reuters: HDBK EY / HDBK.CA

Our Stock Activity

21.6920.719.2

17.461715.6116.4317.2416.817.2

24.524.5127 28

33.332

38.5

43

52.652.6

56

49.6949.6948.1

50.9953.99

51.5

54.9757

54.752.27

51.0148.0647

44.644.4

47.64

53.952.61

48.1247 47.547 48

44.03

0

10

20

30

40

50

60

Janu

ary-

16Fe

brua

ry-1

6M

arch

-16

April

-16

May

-16

June

-16

July

-16

Augu

st-1

6Se

ptem

ber-

16O

ctob

er-1

6N

ovem

ber-1

6D

ecem

ber-

16Ja

nuar

y-17

Febr

uary

-17

Mar

ch-1

7Ap

ril-1

7M

ay-1

7Ju

ne-1

7Ju

ly-1

7Au

gust

-17

Sept

embe

r-17

Oct

ober

-17

Nov

embe

r-17

Dec

embe

r-17

Janu

ary-

18Fe

brua

ry-1

8M

arch

-18

April

-18

May

-18

June

-18

July

-18

Augu

st-1

8Se

ptem

ber-

18O

ctob

er-1

8N

ovem

ber-1

8D

ecem

ber-

18Ja

nuar

y-19

Febr

uary

-19

Mar

ch-1

9Ap

ril-1

9M

ay-1

9Ju

ne-1

9Ju

ly-1

9Au

gust

-19

Sept

embe

r-19

Dividend / Share

54

• HDB has been distributing cash dividend on annual bases.• HDB Full Year 2018 suggested cash dividend of EGP 5 to generate a Yield of 9%• HDB Pay Out Ratio for 2018 is 39%

Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

29 30 31 32 33 34 35 36 37 38

Dividend / Share 1.25 1 1.25 1.5 1 1.5 1.5 2 1.5 5

Payout Ratio Dividend / Share 5Total Shares 126,500,000Shareholders Dividend 632,500,000

Attributable Net Income 632,500,000 Net Profit 1,624,835,369Pay Out Ratio 39%

Why HDB Stock?

55

• HDB performance shows that there is a room for loan growth

especially for corporates and under the CBE initiatives.

• HDB continued efficiency efforts bringing down cost to income

ratios to that of the peer group.

• HDB has the highest ROE and ROA amongst peers of similar size.

• HDB has the highest cash dividend on the Egyptian market with a

high upside based on peer valuations.

• HDB combination of real estate projects & commercial banking

activities has proven a solid element.

• HDB investments in subsidiaries & sister companies that

complement the business model.

Analyst Coverage• HDBK is covered by the following coverage houses:

56

Entity Contact Person E-mail

EFG Hermes Elena Sanchez [email protected]

EFG Hermes Ahmed El Shazly [email protected]

CI Capital Monsef Morsy [email protected]

CI Capital Aya Abd Allah [email protected]

Beltone Ahmed Hesham [email protected]

HC Nemat Choucri [email protected]

Prime Shihab Mohammed [email protected]

Arqaam Capital Jaap Meijer [email protected]

Arqaam Capital Ribal Hachem [email protected]

Naeem Capital Allen Sandeep [email protected]

Pharos Radwa El-Swaify [email protected]

Pharos Dalia El Bonna [email protected]

Rencap Nancy Fahmy [email protected]

mailto:[email protected]






Contact Us

57

Mohamed Hamzawy Chief Investment Officer Housing & Development Bank Direct Telephone: +2-02-33349037Fax: +2-02-37627053 Mobile: +2-010-25000551H/Q 26 El Koroum Street – Mohandessian - Giza, Cairo –Egypt www.hdb-egy.com E-mail: [email protected]

http://www.hdb-egy.com/


Documents

Housing & Development Bank€¦ · Investor Presentation Half Year 2019 9 Month-2019 November 2019. ... HDB`s ESOP First time non-Egyptians allowed ownership of HDB shares; their