Housing & Development Bank

Transcription

1 Housing & Development Bank Investor Presentation Q August 2018

2 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

3 Content Historical overview Business review Financial review Stand Alone Stock Coverage Contact Us 3

4 A progressing commercial bank with an attractive real estate flavor; your window on two sectors 4

5 Historical overview 5

6 Our Start Egypt s Housing & Development Bank was established 39 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

7 Ownership Structure ShareHolders % 29.81% 9.74% 6.32% 7.41% 8.29% 5.03% 5.03% 8.92% New Urban Communities Authority (NUCA) Misr Life Insurance Company Housing Projects Fund REMCO Egypt - Abdel Moneim El Rashed Egyptian Endowment Authority Misr Insurance Company Ali Ben Hassan El Dayekh Free Float 7

8 Our Transformation 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 However, due to the political & economic situation the implementation time line was extended till 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 82 branches based on Q Anew 5 year strategy was put in place and approved by the board during April 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. New Bank products and Real Estate Projects continue to be the key at increasing our growing client base & performance based on top notch IT. 8

9 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: paidin 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 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 9

10 Our Journey Q 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 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 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 Allotted another EGP 1 Billion under the CBE Mortgage Finance Initiative reaching a total of EGP 3,6 Billion. Allotted another EGP 1 Billion under the CBE Mortgage Finance Initiative reaching a total of EGP 4,3 Billion to more than 43,000 clients. 10

11 Board of Directors Chairman & Managing Director (Executive) Fathy El Sebai Vice Chairman Managing Director (Executive) Independent Board Member New Urban Communities Organization Egyptian Awkaf Organization Misr Insurance Company Housing Financing Fund Misr For Life Insurance Independent Board Member Hassan Ghanem 1 Member 3 Members 1 Member 1 Member 1 Member 1 Member 1 Member 11

12 Corporate Governance Board composition: 2 Executives and 11 Non-Executives 5 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 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

13 Our Organization Chart Audit Committee Risk Committee Remuneration Committee Chairman & Managing Director Governance & Nomination Committee Executive Committee Investment Committee Credit Vice Chairman & Managing Director Support Functions Finance Assistant Chairman for Engineering & Investments Marketing IT Investment Real Estate & Engineering Treasury Legal Investment Real Estate Development Financial Operations Human Resources Consultancy Branches Strategy & Planning Asset Management Administration 13

14 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

15 Our Strategy Capitalize On Our Housing Reputation To Attract New Clients Into Our Banking Business Provide Integrated Real Estate Services Accelerate Overall Banking Growth HDB Strategy 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 Provide Integrated Real Estate Services Continued Customer Satisfaction Increase Customer Base Construction and sale of housing units through affiliated companies Provide real estate financing Supervision of implementation of housing projects Real estate business appraisal Maximize Profitability Continued Customer Satisfaction Introducing new products to capture targeted growth in both banking and real estate business 15

16 Our Products Range SME s Products Retail Products Corporate Products Real Estate Products Credit facilities Current accounts Credit facilities Real estate financing Trade finance Saving products Trade finance Real estate investment & development* Specialized services to SMEs e-payments Financing customs & taxes Treasury & cash management Loan products Debit/Credit /Prepaid Cards Life insurance services Safe deposit boxes Payroll services Limited investment banking services e-payments Financing customs & taxes Specialized services to SMEs Treasury & cash management Construction of housing units* Supervision of implementation of the projects owned by HDB & others * (NUCA) Business appraisal and feasibility studies** Vodafone cash Housing installment and e-payments Real Estate consulting and engineering services** *Through HDB s subsidiaries & affiliates ** Through the bank investment & Real Estate 16

17 Our Way Forward Introduction of Internet, Online and Mobile banking services to the bank clients in 2018 Increasing planned branch network set to capture a greater portion of retail business to reach 100 branches by end of 2018 Increase Loan & Deposit Books coupled with the participation in the CBE SME s & Mortgage Finance Initiatives Hidden equity; around 3.25 million sqm of undeveloped land carried at an average cost of EGP 750/msq Trading at Price to Book of around (PB) 1.2 & Price to earnings (PE)of around 4.4 as estimated for full year 2018 HIGH GROWTH PROSPECTS OVER THE NEXT FIVE YEARS 17

18 Business Review 18

19 Our Business Model Housing & Development Bank Banking Business Investment Business Real Estate Business Includes some subsidiaries & sister companies HDB has direct and indirect ownership positions in 17 subsidiaries and sister companies; total EGP 1,513,609,374 million as of Q 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 19

20 Our HDBK Group Structure Blue Line elaborate Bank Direct Investment Red Line elaborate Holding Company Investment Housing & Development Bank Group Housing & Development Co. For Real Estate Investment 60% Ownership by HDBK 38% Holding Co. For Investment & Development 92% Ownership by HDBK El-Tameer Co. For Mortgage Finance 24.80% Ownership by HDBK City Edge Development 38% Ownership by HDBK El-Tameer Co. For Asset Management 15.70% Ownership by HDBK El-Tameer Co. For Real Estate Investment Funds 24% Ownership by HDBK HD Company For Trading Securities 20% Ownership by HDBK 2% 51% 60% 76% 60% 31% 21% 51% 51% EL-Tameer Co. For Security & Money Transfer 40% Ownership by HDBK EL-Tameer Co. Co. For For Housing & Utilities 35% 35% Ownership by by HDBK El-Tameer Co. Co. For For Security & care care services 39% 39% Ownership by by HDBK Tameer Co. for Real Estate Investment Development 37% Ownership by HDBK El-Tameer Co. For Financial & Real Estate Marketing 39% Ownership by HDBK El-Tameer Co. For Technological services 40% Ownership by HDBK Obelisk for investment fund management 30% Ownership by HDBK 18.2% Hyde Park Co. for Real Estate Development 36.90% Ownership by HDBK 20

21 Our Equity Investments Serial Company Name Participation % Value in EGP Subsidiaries 1 * Holding Co. For Investment & Development 92.00% 460,000,000 2 Housing & Development Co. For Real Estate Investment 60.00% 180,000,000 3 EL-Tameer Co. For Housing & Utilities 35.00% 5,250,000 4 El-Tameer Co. For Mortgage Finance 24.80% 175,161,370 5 El-Tameer Co. For Asset Management 15.70% 942,000 6 El-Tameer Co. For Security & care services 39.00% 1,521,000 7 El-Tameer Co. For Real Estate Investment Funds 24.00% 4,800,000 Sister Companies 8 El-Tameer Co. For Financial & Real Estate Marketing 39.00% 2,178,158 9 El-Tameer Co. For Technological services 40.00% 4,000,000 Equity 10 Tameer Co. for Real Estate investment Development 37.00% 74,000, HD Co. For trading securities 20.00% 1 12 Obelisk for investment fund management 30.00% 1 13 City Edge Development 38.00% 341,768, Misr Sinai Tourism Company 30.00% 1 15 El Tameer Company for Security & Money Transfer 40.00% 6,000, Gardien Leasing Company 60.00% 5,966,343 Company Name Participation % Value in EGP 1 Hyde Park Real Estate Co. For Development 36.90% 198,622,250 Total 1,513,609,374 21

22 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

23 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. Ready to Sell Units across Projects 100% Owned by HDB Q Q Project Name Description Segment October - El Montazah - Phase 1&2&3 Residential Middle Total Number of Units Sold Units Avalaible Units for Sale New Cairo - Acacia - Phase 1 &2 &3 Residential Upper Middle Ganat El Obour Residential & Commercial Economic El Arish City Residential Economic Qena Governerate Residential Economic Administrative Building Plot 28 Office Upper Middle Leased Diffierient Sites Residential & Commercial * All sales will be done at current market prices ,

24 Potential Upside of Revenue & Profit HDBK Land Bank* as of Q Item Cost EGP Million Land Area square meter 6 October Project El Montazah - Phase 2 and 3 654,150 3,115 29,847,940 6,800 New Cairo - Acacia - Phase 2&3 New Cairo - Plot 31 15,732,398 99,272 Hurgada - Red Sea Land 6,320,594 5,742 El Korum Street Land Number 24 - Office Building 26,617, , Administrative building / el kothar / Suhag Helwan Land 121,280, ,000 El Sheikh Zayed 745,040 3,214 Total 201,630, ,493 * All plots will be developed and sold as final product with current market price 24

25 Potential Upside of Revenue & Profit Work In Progress as of Q Project Name Type of Units Number of Units Value in EGP New Cairo -5th Settlement - Plot 31 Villas ,059,579 Hurgada Governorate Challet ,785,323 El Gawahara - Port Said Apartments ,300,782 Acacia Commercial Mall Commercial Buliding 18,452,584 6 October South District Commercial Buliding 11,512,410 Office Building Sohag Office & Commercial Buliding 17,037,586 El Safa Commercial Center Commercial Buliding Opera City Sheikh Zayed Commercial Buliding 16,513,726 Koroum Office Building Office & Commercial Buliding 1,654,109 Total ,316,099 25

26 Our Bank Visibility Q Q Branches P.O.S A.T.M Full Year 2009 Full Year 2016 Q Footprint 55 Branches, 98 ATMs, 64 POS 70 Branches, 160 ATMs, 68 POS 81 Branches, 225 ATMs, 76 POS 26

27 Financial Review Stand Alone 27

28 Our Bank Financial Snap Shot Assets Growth Q2-2018/ Q % Assets Growth Q2-2018/Q % ROA Growth Q2-2018/Q % ROA Growth Q2-2018/ Q % ROE Q2-2018/Q % ROE Q2-2018/ Q % Total Depoist Growth Q2-2018/ Q % Retail Deposit Growth Q2-2018/ Q % Corporate Deposit Growth Q2-2018/ Q % Total Deposit Growth Q / Q % Retail Deposit Growth Q / Q % Corporate Deposit Growth Q / Q % Total Loan Growth Q2-2018/ Q % Retail Loan Growth Q2-2018/ Q % Corporate Loan Growth Q2-2018/ Q % Total Loan Growth Q2-2018/Q % Retail Loan Growth Q2-2018/Q % Corporate Loan Growth Q2-2018/Q % Total Revenue Growth Q2-2018/ Q % Total Revenue Growth Q2-2018/ Q % Net Profit Growth Q2-2018/ Q % Net Profit Growth Q2-2018/Q % Net Profit Growth H-2018 / H % 28

29 Our Bank Financial Snap Shot Paid in Capital ,150 1,150 1,150 1,150 1,265 1,265 1,265 1,265 1,265 1, Q Q 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 23 rd May 2018 for full year 2017 Est. Free Float 39.9% 29

30 Our Bank Standalone Financials Bank Standalone Financials 1/1/2018 till 30/6/2018 On 1/1/2017 till 30/6/ % 45% 40% 44.3% 3, % 36.7% 39.6% EGP million % 35% 32.0% % 25% 1,736 1, % 1, % % 5% 0% Interest From Loans & Similar Income Net interest income Net fees and commisions income % 219 Housing projects' profits Net profit for the year before taxes 599 Net profit for the year Earnings Per Share /1/ /6/2018 1/1/ /6/2017 Y-o-Y 30

31 Our Bank Stand Alone Financial Snap Shot 30% 25% Capital Adequacy Ratio 24.2% 24.2% 25.5% 25.2% 23.7% 21.62% 20% 15% 10% 13.7% 20.6% 19.8% 18.6% 16.58% 13.76% 17.22% 17.0% 18.2% 5% 0% 35% 30% 25% 20% 15% 10% 5% 0% Q Q Tier 1 Capital to Basel I Tier 1 Capital to Basel II Return on Assets & Equity Return on equity Return on assts 29.1% 30.2% Capital increase: EGP500mn to EGP1.2bn 11.2% 9.4% 11.8% 13.2% 15.8% 19.9% 23.0% 15.1% 23.4% 2.3% 1.6% 1.3% 1.7% 1.7% 1.4% 1.9% 2.0% 2.1% 1.2% 2.2% Q Q

32 Our Bank Stand Alone Financial Snap Shot 80% 75% 70% 65% 60% 55% 50% EGP million 7,000 45% 34.9% 37.1% 38.7% 40% 35% 30% 65.1% Unusually high TB rates & auction land sales distort ratios 62.9% 61.3% Net Operating Margins & Cost to Income Ratios 52.9% 47.1% 40.0% 60.0% 42.0% 75.3% 56.0% 73.0% 74.0% 62.0% 54.0% 74.0% 60.0% 56.0% 51.3% Q Q Net operating margins Cost / Income ratio 64.0% 6,000 Net Profit 5,715 5,000 4,000 3,632 4,226 3,668 3,000 2,000 1, ,566 2,712 2,359 1,546 1,770 1,891 2,014 1,537 1,146 1,242 1, ,012 1,062 1,244 1,202 1,332 1, , ,075 1, Q Q Total Revenue Total expenses Net profit before tax Net profit After tax 32

33 Our Bank Stand Alone Financial Snap Shot Cost to Income Ratio Calculated like Market 7,000,000, % 6,000,000, % 45.30% 5,715,596, % 40.00% 5,000,000, % 35.00% 4,000,000,000 3,000,000, % 24.53% 2,578,016,126 2,554,512,805 3,632,391, % 22.55% 30.00% 25.00% 20.00% 2,000,000,000 1,861,221,533 1,645,620,907 2,066,412,3942,014,419, % 1,000,000, ,407, ,305,929 1,073,100, ,572, ,191, % 5.00% Q Q Revenue Cost to Income Mkt Percent 0.00% 33

34 Our Bank Stand Alone Financial Snap Shot EGP million 60,000 Development of Assets 50,000 40,000 31,965 51, , ,299 1, ,514 30,000 20,000 10, , ,511 25,335 21,248 1, ,135 1, ,039 9,313 14,592 4,322 12,657 14,037 13, , , , , ,570 6, ,282 2,195 1,822 6,646 6,023 14,247 5,792 6,563 5,760 11,087 8,835 24,600 2,149 2,622 3,981 3,584 4, Q Q Cash,Mkt.Securities&T-Bills Net Loans Investments Real Estate Activity Fixed Assets Other 34

35 Our Bank Stand Alone Financial Snap Shot EGP million 60,000 Total Liabilities & Shareholder s Equity 50,000 40,000 30,000 25,335 31,959 51, , ,299 2,773 2,977 1,265 1,181 4,870 21,250 11,731 20,000 10, , , ,14 657,12 037, , , , , , , , ,671 1,553 1,455 1,310 1,282 6,568 7,505 7,558 8,134 8,869 9, , , ,733 1,574 1, ,807 13, , Q Q Customer Deposits Long Term Loans (incl.subsidised) Other Inv Paid In Capital Reserves & Retained earnings Down Payments - Real Estate Other Obligation Taxes 35

36 Our Bank Stand Alone Financial Snap Shot Deposit Development 45,000 40, % 40,884 36, % 80.0% 35,000 30,000 25,000 31, % 40.0% 20,000 15,000 10,000 5,000 6, % 7, % 7.6% 9.0% 8.5% 0.7% 7,558 8,134 8,869 9,626 11, % 13, % -9.5% 20.0% 0.0% -15.7% -20.0% Q Q % Deposits Deposits Growth 36

37 Our Bank Stand Alone Financial Snap Shot Deposit Composition & Growth YoY 45, % 40, % 40,884 36, % 35,000 31,191 30, % 25,000 24, % 20,000 15,000 10,000 5,000 8,133 5,819 0% 6,171 8,868 9,625 9% 6,985 9% 2,314 2,697 2,640 13,641 11,733 8,539 9,070 16% 3% 4,571 3,194 16,468 18,985 18,009 15,574-10% 15,617-16% 50% 0% Q Q Retail Deposists Corporate Deposits Total Deposit Book Growth YoY -50% 37

38 Our Bank Stand Alone Financial Snap Shot Loan Development 16, % 14,000 12, % 10,456 14,516 13,409 14, % 26.1% 30.0% 25.0% 22.8% 20.0% 10,000 8,000 6,000 4,000 6, % 12.9% 6,989 7, % 6,362 6, % 7, % 15.6% 8, % 10.0% 5.0% 0.0% -5.0% 2, % -10.0% Q Q % Total Loans Loan BookGrowth 38

39 Our Bank Stand Alone Financial Snap Shot EGP million 16,000 Development of Loan Book by Type 14,000 13,409 14,130 14,517 12,000 10,000 9,588 8,000 6,000 6,189 6,989 7,100 6,362 6,588 7,100 8,209 5,865 5,169 6,249 5,558 6,459 5,816 4,000 2,000 3,099 3,248 3,260 2,702 2,831 2,780 2,908 3,006 2,613 2,202 2,290 2,118 2,123 2,278 1,746 1,318 1,523 1,534 1,525 1,617 1,691 3,793 3,193 2,586 2,358 2,306 2, Q Q Corporate Retail Mortgage Credit cards Total 39

40 Our Bank Stand Alone Financial Snap Shot 40,000 Loan to Deposit Ratio 80.0% 36,994 35,000 30, % 60.2% 61.3% 58.2% 59.5% 62.1% 56.1% 70.3% 28,114 31, % 60.0% 25, % 50.0% 44.4% 20, % 40.0% 15,000 11,733 13,642 12,643 13,458 13, % 10,000 5,000 8,134 7,505 7,558 6,568 4,393 4,518 4,636 4,734 8,869 5,278 9,626 5,978 6,587 9, % 10.0% Q Q Total Deposits Total Loans (Exluding Subsidized Loans) Loan to Deposit Ratio 0.0% 40

41 Our Bank Stand Alone Financial Snap Shot Deposit Book Breakdown Q % 49.9% Retail Deposits Book Corporate Deposits Book 41

42 Our Bank Stand Alone Financial Snap Shot Loan Book Breakdown Q % 55.8% Retail Loan Book Corporate Loan Book 42

43 Our Bank Standalone Financials Loan to Deposit Ratio Q % 13,842 31,191 Total Deposits Total Loans (Exluding Subsidized Loans)

44 Our Bank Stand Alone Financial Snap Shot NPL s , % % 12,643 13, % 7.00% % 5.42% 5.42% % 5.51% 6.00% 5.00% % % 3.92% % 4.00% 3.00% % Q Q Total Loans Non-Performing Loans Non-Performing to Total Loans 1.00% 0.00% Quality of loan portfolio improving with NPLs fully covered 44

45 Our Bank Stand Alone Financial Snap Shot 18.0% 16.0% Net Interest Margin 16.8% 16% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 10.4% 11.9% 11.0% 10.5% 10.6% 10.1% 10.2% 10.1% 10.70% 6.2% 6.3% 5.7% 5.8% 6.1% 6.3% 6.47% 5.7% 5.9% 5.3% 4.8% 4.9% 4.7% 4.9% 4.3% 4.3% 4.230% 3.8% 7.8% 9.0% 8.60% 6.84% 2.0% 0.0% Q Q Loans Deposits Net Interest Margins 45

46 Our Bank Stand Alone Financial Snap Shot Net Interest income & Net Operating Margin % % 62.0% 2,544 56% 60.0% % 45.0% 49.0% 40.0% 42.0% 1, % 1,599 51% 50.0% 40.0% , % 20.0% % Q Q % Net Interest Income NOM 46

47 Our Bank Net Profit Breakdown 1/1/2018 till 30/6/2018 Item Commercial Banking Activity Real Estate Activity Total Total Revenue 3,361, ,879 3,668,715 Total Expenses (2,236,643) (123,226) (2,359,869) Net Profit BeforeTaxes 1,125, ,653 1,308,846 Taxes (274,950) (41,322) (316,272) Net Profit After Taxes 850, , ,574 Contribution % 85.66% 14.34% 100% Amounts in EGP Million Total Net Profit 992,574 47

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 10 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 Q are EGP 4,313,713,888 Million to 48,979 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 48

49 CBE Mortgage Finance Initiative Number of Units in Thousands , , , , ,560 6,670 6,978 4, ,320 2,341 2,484 3,222 2,141 2,760 1, Total 2014 Total 2015 Total 2016 Total 2017 Q Q Grand Total Low Income New 5% Low Income 7% Middle Income 8% Above Middle Income 10.5% Total 49

50 5E+09 CBE Mortgage Finance Initiative Value EGP Million 4.5E+09 4,313,713,888 4E E+09 3,210,043,861 3E E+09 2E E+09 1E ,271,671, ,678, ,513, ,901, ,863, ,352, ,403, ,399, ,441, ,941, ,656,818162,139, ,034,635 92,318, ,482,500 74,038,146 53,574,592 10,015, ,693,378 4,940,885 44,764,655 17,451,177 11,284,261 40,121,739 Total 2014 Total 2015 Total 2016 Total 2017 Q Q Grand Total Low Income New 5% Low Income 7% Middle Income 8% Above Middle Income 10.5% Total 50

51 Our Stock 51

52 Our Bank Fact Sheet Total Number of Issued Shares is 126,500,000 million with a book Value of EGP 10 Last Cash Dividend distribution date was 23 rd May 2018 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 6.8 Billion 52 Week High: Week Low:

53 Our Stock Activity January-16 February March-16 April-16 May-16 June-16 July-16 August-16 September-16 October Stock Data: Bloomberg / Reuters: HDBK EY / HDBK.CA November-16 December-16 January-17 February-17 March-17 April-17 May-17 June-17 July-17 August-17 September-17 October-17 November-17 December-17 January-18 February-18 March-18 April-18 May-18 June-18 53

54 Dividend / Share HDB has been distributing cash dividend on annual bases. HDB Full Year 2017 cash dividend of EGP 1.5 to generate a Yield of 5% HDB Coupon 37 will be distributed on Wednesday 23 rd May 2018 for shareholders record on Sunday 20 th May HDB Pay Out Ratio for 2017 is 18% Year Dividend / Share Payout Ratio Dividend / Share 1.5 Total Shares 126,500,000 Attributable Net Income 189,750,000 Attributable Net Income 189,750,000 Net Profit 1,075,532,655 Pay Out Ratio 18% 54

55 Why HDB Stock? 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. 55

56 Analyst Coverage HDBK is covered by the following coverage houses: Entity Contact Person EFG Hermes Elena Sanchez EFG Hermes Ahmed El Shazly CI Capital Monsef Morsy CI Capital Jaida Gamal Beltone Nancy Fahmy HC Nemat Choucri Prime Shihab Mohammed Arqaam Capital Jaap Meijer Arqaam Capital Anas Aboulhosn Naeem Capital Zeina Shahin Pharos Radwa El-Swaify Pharos Dalia El Bonna 56

57 Contact Us Mohamed Hamzawy Chief Strategic Planning & Investment Officer Housing & Development Bank Direct Telephone: Fax: Mobile: H/Q 26 El Koroum Street Mohandessian - Giza, Cairo Egypt mhamzawy@hdb-egy.com 57