Housing & Development Bank...Our Start • Egypt’s Housing & Development Bank was established 40...

Housing & Development Bank

Investor Presentation

Standalone Financials

Full Year 2019

March 2020

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 established

40 years ago; in 1979, as an arm of the Ministry of

Housing. At the time of its launch it had a clear mandate

to finance moderate housing units for Egyptians, while

also bridging the gap between supply and demand in the

nation’s real estate market.

• By the late 1980s & 1990’s HD Bank had already

successfully concluded many flagship developments,

which brought new housing units to many urban

communities and strategic investments in the country’s

northern coastal resorts.

6

Ownership Structure

7

29.81%

5.03%

8.92%

8.29%7.41%

7.23%

9.74%

23.56%

ShareHolders

New Urban Communities Authority (NUCA) Egyptian Endowment Authority

Misr Life Insurance Company Misr Insurance Company

Housing Projects Fund Ali Ben Hassan El Dayekh - RELACO

REMCO Egypt - Abdel Moneim El Rashed Free Float

Our Transformation

8

• In 2003, Egyptian banking law 88 prohibited the existence of specialized banks

in Egypt, and HDB was restructured to become a conventional Commercial

bank, with a new management appointed. The bank nevertheless still owns

several plots of land which will be developed into commercial and residential

projects for sale.

• The New Management implemented a five-year plan to turnaround the bank that

started 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 line

was extended till 2017. Then a new 5 year plan focused on heavily investing in

new IT systems, renovating its branch network and increasing its marketing

efforts. HDB currently has a branch network of 92 branches based on Full Year

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 the

banking and real estate businesses and capitalizing on strong ICT Platform.

• New Bank products and Real Estate Projects continue to be the key at

increasing 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

banking

law

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 4,9

Billion to more

than 54,309

clients.

2019

Added more

than 10

branches

compared to

full year 2018 .

Allotted another

EGP 300

million under

the CBE

Mortgage

Finance

Initiative

reaching a total

of EGP 5,462

Billion to more

than 59,818

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

Independent

Board

Member

1 Member

Chairman

Fathy El Sebai

Total Number of 11 Board Members

• Board composition: 2 Executives and 9 Non-Executives

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

Audit Committee

Risk Committee

Remuneration Committee

Governance & Nomination Committee

Executive & Operational Committee

Investment Committee

Engineering Committee

IT Enhancement Committee

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 &

InvestmentsInvestment

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 Vision

To be within the top 10 ranked commercial banks in Egypt,

while maintaining the current high operational efficiency.

Our Mission

Search for excellence in providing our commercial & real

estate products through the continuous upgrade of our

human capital and we strive to excel in providing our

services to meet our clients and shareholders

expectations.

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




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





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


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 Full Year 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

35% Ownership by HDBK

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 NameParticipation 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% 1

13 City Edge Development 39.52% 491,473,000

14 Misr Sinai Tourism Company 30% 1

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

16 Gardien Leasing Company 78% 59,366,343

Company Name Participation % Value in EGP

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

Total 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. * All sales will be done at current market prices

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

Full Year 2019

Project Name Description Segment Total Number of

Units Sold Units

Avalaible Units for Sale

October - El Montazah - Phase 1&2&3 Residential Middle 900 814 86

New Cairo - Acacia - Phase 1 &2 &3 Residential Upper Middle 813 544 269

Ganat El Obour Residential & Commercial Economic 1620 1618 2

El Arish City Residential Economic 184 4 180

Qena Governerate Residential Economic 252 247 5

Administrative Building Plot 28 Office Upper Middle Leased

New Cairo - Palma Residential & Commercial Economic 95 21 74

Administrative Building- SOHAG Residential & Commercial Economic 51 5 46

Hurghada Residential & Commercial 174 3 171

PORTSAID- ELGOWHARA Residential & Commercial 294 294

Diffierient Sites Residential & Commercial 76 19 57

4,459 3,275 1,184

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 Full Year 2019

Item

Cost EGP MillionLand Area square

meter

6 October Project El Montazah - Phase 2 and 3

0 0

New Cairo - Acacia - Phase 2&329,847,940 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

Total187,935,136 118,291

25

Potential Upside of Revenue & Profit

Work In Progress as of Full Year-2019

Project Name Type of Units Number of

Units Value in Million EGP

Hurgada - Industrial Zone Apartments 140 49,434,522

Hurgada Commercial Buliding 217,137

Acacia - Nursery Nursery Buliding 19,071

Acacia – Commercial Mall Commercial Buliding 25,622,212

Koroum Office Building Commercial Buliding 3,947,649

434 79,240,591

26

55 58 59 59 61 62 6468

80 84

96

64 64 65 65 68 68 68 70 71 71 72

98

114 118 120

152 156 156 174

224230

235

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 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)

• Next Div. / Ex. Date EGP 2.5 on 15th April for X date 12th April 2020 for full

year 2017

• Est. Free Float 39.9%

Our Bank Financial Snap Shot

670

1,150 1,150 1,150 1,150

1,265 1,265 1,265 1,265 1,265 1,265

0

200

400

600

800

1000

1200

1400

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Paid in Capital

Our Bank Standalone Financials

29

Bank Standalone Financials 1/1/2019 till 31/12/2019 On 1/1/2018 till 31/12/2018

13.73

1,951

2,548

402328

2,942

6,606

12.85

1,625

2,195

444304

3,148

6,108

6.8%

20.1%

16.1%

-9.5%

7.9%

-6.5%

8.2%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0.00

1000.00

2000.00

3000.00

4000.00

5000.00

6000.00

7000.00

Earnings Per ShareNet profit for the

year

Net profit for the

year before taxes

Housing projects'

profits

Net fees and

commisions income

Net interest incomeInterest From

Loans & Similar

Income

1/1/2019 - 31/12/2019 1/1/2018 - 31/12/2018 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% 20.85%

0%

5%

10%

15%

20%

25%

30%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Tier 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% 32.2%

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

3.8%

0%

5%

10%

15%

20%

25%

30%

35%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 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%

55.0%

65.1%

62.9%61.3%

52.9%

60.0%

75.3%

73.0%74.0%

74.0%

69.0% 69.0%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Net operating margins Cost / Income ratio

Unusually high TB rates & auction

land sales distort ratios

Net Operating Margins & Cost to Income Ratios

32

1,146

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

2,566

3,632

5,715

7,109

8,310

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

1,891

2,712

4,226

4,914

5,762

264230 203 302 335 438 674

920

1,489

2,195 2,548

244 203 176 206 247 306492 644

1,075

1,6251,951

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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

EGP million


Net Profit

Consistent 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

7,109,057,163

8,309,522,514

497,407,655632,305,929

1,073,100,942

1,645,620,907

2,066,412,3941,924,450,070

2,063,298,392

26.72%24.53%

42.01%

45.30%

36.15%

27.1%

25%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

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

8,000,000,000

9,000,000,000

2013 2014 2015 2016 2017 2018 2019

Revenue Cost to Income Mkt Percent

34

EGP million


Development of Assets

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

12,584

1,822 2,2822,095 2,195

2,570

4,322

5,039

6,135

4742

6,162

18,317

390630

904 9441,004

1,056

1,100

1,127

1038

917 1,040

92112

132 154152

161

242

310

509

696 942

374447

278 366235

360

361

833

745

1,004 1,117

0

10,000

20,000

30,000

40,000

50,000

60,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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

10,619

47,79151,460

51,936

35

Total Liabilities & Shareholder’s EquityEGP million


47,692

6,568 7,505 7,558 8,134 8,869 9,62611,733

13,642

40,884

34,122

41,285

1,796 1,671 1,553 1,455 1,310 1,282

1,733

2,807

4,156

5,218

650

745957 980 886 896 1192

541

940

206

1,185

1,316

414870 904 938 963

9821,208

1,574

2,297

3,610

4,792

426503 1,891 442

1,400

6903

8855

11,731

2,675

2,336

1,097

0

10,000

20,000

30,000

40,000

50,000

60,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 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

51,936

31,993

13,00414,635

25,427

51,460

47,791

36


Deposit Development EGP million

6,5687,505

7,558 8,134 8,869 9,626

11,733 13,641

40,884

34,122

41,285

26.6%

14.3%

0.7%

7.6% 9.0% 8.5%

21.9%16.3%

81.3%

-17%

21.0%

-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 2019

Deposits Deposits Growth

37


Deposit Composition & Growth YoYEGP million

5,819 6,1716,985

8,539 9,070

24,416

16,33617,882

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

16,46817,786

23,403

8,1338,868

9,625

11,733

13,641

40,884

34,122

41,285

0%9% 9%

3%

16%

200%

-17%

21.0%

-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 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

15,687

19,729

1.2%

12.9%

1.6%

-10.4%

3.6%

7.8%

15.6%

27.4%

28.2%

17.0%

25.8%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

5,000

10,000

15,000

20,000

25,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 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

7,099

9,824

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

2,6133,006

2,586 2,358 2,182

3,027

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

3,793

5,169

6,3876,852

6,189

6,989 7,1006,362 6,588

7,100

8,209

9,588

13,409

15,687

19,729

0

5,000

10,000

15,000

20,000

25,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Corporate Retail Mortgage Credit cards Total

40


Loan to Deposit Ratio EGP million

6,5687,505 7,558 8,134

8,8699,626

11,733

13,642

28,114

34,122

41,285

4,393 4,518 4,636

6,358 6,583

7,104

8,207

10,456

13,409

15,687

19,729

66.9%

60.2% 61.3%

78.2%

74.2% 73.8%

69.9%76.6%

47.7% 46.0%47.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

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 2019

Total Deposits Total Gross Loans Loan to Deposit Ratio

41


43.3%

56.7%

Deposit Book Breakdown Full Year 2019

Retail Deposits Book Corporate Deposits Book

42


Loan Book Break Down Full Year 2019

50.2%49.8%

Retail Loan Book Corporate Loan Book

Our Bank Standalone Financials

41,285

19,729

47.8%

Loan to Deposit Ratio Full Year 2019

Total Deposits Total Gross Loans

44


NPL’sEGP million

61896989 7100

6362 65887100

8211

9590

12,643

15,687

19,729

239 245 278 433 391 385 445 372 736 872 1,706

3.86%3.51%

3.92%

6.81%

5.94%

5.42% 5.42%

3.88%

5.82%5.56%

8.65%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 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%8.2%

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 2019

NIM

NIM

46


Net Interest income & Net Operating Margin EGP million

300 349 392

584465 501

1,028

1,690

2,544

3,148

2,942

44%

49%52%

65%

54%51%

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 2019

NII NOM

47

Our Bank Net Profit Breakdown

Full Year 2019

Item Commercial Banking Activity Real Estate Activity Total

Total Revenue 7,742,718 566,804 8,309,522

Total Expenses (5,480,299) (281,577) (5,761,876)

Net Profit BeforeTaxes 2,262,419 285,227 2,547,646

Taxes (532,381) (64,176) (596,557)

Net Profit After Taxes 1,730,038 221,051 1,951,089

Contribution % 88.67% 11.33% 100%

Amounts in EGP Million Total Net Profit 1,951,089

48

Our Bank Participation in the CBE

Mortgage 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 Full Year 2019 are EGP 5,462,204,937

Million to 59,818 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 4,8612,528

848

12,346

2,341

6,670

11,303 11,7189,458

4,632

46,252

143 308 230 153 278 161,128

28 35 146 13 2222,484

6,978

15,670 16,767

12,410

5,509

59,818

0

10000

20000

30000

40000

50000

60000

70000

Total 2014 Total 2015 Total 2016 Total 2017 Total 2018 Total 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

288,403,026413,027,307

214,645,30872,693,693

988,769,334

131,656,818

495,863,370

919,678,1891,136,504,616

923,039,474

467,436,308

4,074,178,776

30,482,500 74,038,146 53,574,592 38,794,842 92,322,9994,700,588

293,913,667

10,015,810 13,880,783 74,750,567 6,696,000105,343,160162,139,318

569,901,516

1,271,671,617

1,602,207,548

1,304,758,348

551,526,589

5,462,204,937

0

1E+09

2E+09

3E+09

4E+09

5E+09

6E+09

Total 2014 Total 2015 Total 2016 Total 2017 Total 2018 Total 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: 40.50%

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

54.752.2751.01

48.064744.644.4

47.64

53.952.61

48.1247 47.5

4748

44.0343

42.47

42.88

0

10

20

30

40

50

60

Jan

uar

y-1

6

Feb

ruar

y-1

6

Mar

ch-1

6

Ap

ril-

16

May

-16

Jun

e-1

6

July

-16

Au

gust

-16

Sep

tem

ber

-16

Oct

ob

er-

16

No

vem

ber

-16

Dec

em

ber

-16

Jan

uar

y-1

7

Feb

ruar

y-1

7

Mar

ch-1

7

Ap

ril-

17

May

-17

Jun

e-1

7

July

-17

Au

gust

-17

Sep

tem

ber

-17

Oct

ob

er-

17

No

vem

ber

-17

Dec

em

ber

-17

Jan

uar

y-1

8

Feb

ruar

y-1

8

Mar

ch-1

8

Ap

ril-

18

May

-18

Jun

e-1

8

July

-18

Au

gust

-18

Sep

tem

ber

-18

Oct

ob

er-

18

No

vem

ber

-18

Dec

em

ber

-18

Jan

uar

y-1

9

Feb

ruar

y-1

9

Mar

ch-1

9

Ap

ril-

19

May

-19

Jun

e-1

9

July

-19

Au

gust

-19

Sep

tem

ber

-19

Oct

ob

er-

19

No

vem

ber

-19

Dec

em

ber

-19

Dividend / Share

54

• HDB has been distributing cash dividend on annual bases.

• HDB Full Year 2019 suggested by Board & approved by GA a cash

• dividend of EGP 2.5 to generate a Yield of 6%

• HDB Pay Out Ratio for 2019 is 16%Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

29 30 31 32 33 34 35 36 37 38 39

Dividend /

Share 1.25 1 1.25 1.5 1 1.5 1.5 2 1.5 5 2.5

Payout Ratio Dividend / Share 5

Total Shares 126,500,000

Shareholders Dividend 316,250,000Dividend Yield 6%

Net Profit 1,951,089,343

Pay Out Ratio 16%

Distribution Date Wednesday 15th April 2020

With Holding Date Sunday 12th April 2020

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 Omar El-Menawy [email protected]

Beltone Abanob Magdy [email protected]

HC Nemat [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


Direct Telephone: +2-02-33349037

Fax: +2-02-37627053

Mobile: +2-010-25000551

H/Q 26 El Koroum Street – Mohandessian - Giza, Cairo –Egypt

www.hdb-egy.com E-mail: [email protected]

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


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