Housing & Development Bank · EGX:HDBK
Housing & Development Bank — FY2015 Earnings Presentation
56 slides from Housing & Development Bank's earnings presentation, March 2016
Slide 1: Housing & Development Bank Investor Presentation Full Year 2015
Housing & Development Bank Investor Presentation Full Year 2015 March 2016
Slide 2: Disclaimer
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
Slide 3: Agenda
Agenda • Historical overview • Business review • Financial review Stand Alone • • Financial review Consolidated • Stock • CSR • Contact Us 3
Slide 4: A progressing commercial bank with an attractive real estate flavor
A progressing commercial bank with an attractive real estate flavor; your window on two sectors 4
Slide 5: Historical overview
q Housing & Development Bank Historical overview
Slide 6: Our Start
Our Start • Egypt’s Housing & Development Bank was established 35 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 est
Slide 7: Ownership Structure
Ownership Structure Misr Insurance Co. 8% 22% Misr Life Insurance Co. 7% New Urban Communities Authority 15% Housing Fincance Fund 30% Egyptian Endowment Authouriy 11% 7% Regional HNWI Free Float 7
Slide 8: Our Transformation
Our Transformation • In 2003, Egyptian banking law 88 prohibited the existence of specialized banks in Egypt, and HDB was restructured to become a conventional bank, with a new management appointed. The bank nevertheless still owns several plots of land which will be developed into commercial and re
Slide 9: Our Journey
Our Journey 1979 1993 2003 2006 2010 2013 2014 Founded in 2003: Introduction of Participation in Continued Paid-in capital 1979 as a In 2006 stage I of the the CBE growth of Introduction increased to specialized provided an new IT system Mortgage real estate of new EGP 1.2bn entity for integrated to
Slide 10: Our Journey
Our Journey 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 Participation in the CBE SME’s lending initiative that lends loans with a 5% inter
Slide 11: Board of Directors
Board of Directors Chairman & Managing Director (Executive) Fathy El Sebai Vice MD For Chairman & Engineering New Urban Egyptian Misr Housing Independent Misr For Life Experienced MD & Investments Communities Awkaf Insurance Financing Board Insurance Members (Executive) Affairs Organization Organiza
Slide 12: Corporate Governance
Corporate Governance • Board composition: 3 Executives and 12 Non-Executives • 5 Board Committees meeting on a regular basis, namely: Audit Committee Risk Committee Remuneration Committee Governance & Nomination Committee Executive & Operational Committee Investment Committee • Remunerat
Slide 13: Our Organization Chart
Our Organization Chart Audit Committee Risk Committee Remuneration Committee Governance & Nomination Committee Chairman Executive Committee Investment Committee Vice Chairman & MD Support Functions MD For Engineering & Investments Credit Finance Marketing IT Investment Real Estate & Engineering Trea
Slide 14: What We Aim For
What We Aim For Our Vision To be within the five top ranked banks in Egypt, with direct involvement in the real estate business to both boost our financial performance and continue profitably to asset- back our banking business Our Mission Through the continuous upgrade of our human capital we striv
Slide 15: Our Strategy
Our Strategy Capitalize On Our Housing Reputation To Attract New Clients Into Our Banking Business Capitalize on our reputation and experience in Accelerate providing full range of housing and property Overall development services plus the current banking retail Banking client base to attract new SM
Slide 16: Our Products Range
Our Products Range Real Estate SME’s Products Retail Products Corporate Products Products Credit facilities Real estate financing Credit facilities Current accounts Trade finance Real estate investment Trade finance Saving products & development* Limited investment Specialized services to Loan produ
Slide 17: Our Way Forward
Our Way Forward Increasing planned Low Loan / Deposit New core banking IT branch network set to Ratio coupled with the system allows handling new CBE SME’s capture a greater initiative and of increased more portion of retail classification of complex products and a business to reach 100 corporate lo
Slide 18: Business review
q Housing & Development Bank Business review
Slide 19: Our Business Model
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 14 subsidiaries and sister companies; total EGP 1,074 million as at end of Full Year 2015 and owner
Slide 20: Our HDBK Group Structure
Our HDBK Group Structure • Blue Line elaborate Bank Direct Investment Housing & Development Bank Group • Red Line elaborate Holding Company Investment Housing & Development Co. For Real Estate Investment Holding Co . For Investment & 38% 60% Ownership by HDBK Development 92% Ownership by HDBK El-Tam
Slide 21: Our Equity Investments
Our Equity Investments Holding Company For Serial Company Name Participation % Value in EGP Investment & Value in EGP Development Participation % 1 * Holding Co . For Investment & Development 92.00% 410,000,000 Subsidiries 2 Housing & Development Co. For Real Estate Investment 60.00% 180,000,000 38.
Slide 22: HDB Financials
HDB Financials • 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, subsidiari
Slide 23: Real Estate Business Model
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 subsidiarie
Slide 24: Potential Upside of Revenue & Profit
Potential Upside of Revenue & Profit Land Bank Owned by HDB 30 September 2015 ** Land Area Sq. Cost in EGP Item m Ganat El Obour – El Obour 198,362 5,000 6 October Project El Montazah - Phase 2 and 3 1,011,150 4,815 New Cairo - Acacia - Phase 2&3 29,669,123 6,800 New Cairo - Plot 31 31,778,193 108,0
Slide 25: Years in Review
Years in Review Item Break Down 2009 2013 2014 2015 Revenue breakdown Banking EGP Million 930 1,251 1,322 2,253 Real Estate EGP Million 142 466 381 320 8,800+1000 Deposits EGP Million 6,500+1200*** *** 9,745+1000*** 11,733 Loans EGP Million 6,800 6,400 7,100 8,203 Real Estate Activity Land meters sq
Slide 26: Our Bank Visibility
Our Bank Visibility 180 152 156 156 160 140 118 120 120 114 98 100 80 61 62 64 58 59 59 60 55 40 64 64 65 65 68 68 68 20 0 2009 2010 2011 2012 2013 2014 2015 Branches P.O.S A.T.M 2009 2015 Footprint 55 Branches, 98 ATMs, 64 POS 64 Branches, 152 ATMs, 68 POS 26
Slide 27: Financial Review Stand Alone
Financial Review Stand Alone 27
Slide 28: Financial Snap Shot
Our Bank Financial Snap Shot EGP million Paid In Capital 1400 1,265 1,265 1200 1,150 1,150 1,150 1,150 1000 800 670 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 • 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 Excha
Slide 29: Financial Snap Shot
Our Bank Financial Snap Shot Standalone Financial Position*** Full Year 2015(EGP million) Total Loans 8,211 Total Deposits 11,733 Total Revenue 2,566 Net Operating Margin 56% Net Profit After Tax 492 NPL/Total Loans 5.4% Cost/ Income Ratio 73% Tier 1 capital – Basel I 21.62% Tier 1 capital – Basel I
Slide 30: Stand Alone Financial Snap Shot
Our Bank Stand Alone Financial Snap Shot 30% Capital Adequacy Ratio 35% Return on Assets & Equity 25.5% 25.2% 24.2% 24.2% 23.7% 29.1% 25% 30% 21.62% 20% 25% 19.9% 20.6% 19.8% 20% 13.7% 18.6% Capital increase: 15.8% 15% 16.58% EGP500mn to 13.2% 15% 11.8% EGP1.2bn 11.2% 10% 9.4% 10% 5% 5% 2.3% 1.6% 1.
Slide 31: Development of Assets
Our Bank Stand Alone Financial Snap Shot EGP million Development of Assets 30,000 25,335 25,000 361 1,100 21,250 360 5,039 20,000 1,056 4,322 14,592 14,037 15,000 7,506 13,004 235 12,657 278 1,004 904 366 10,619 447 944 6,514 630 2,095 2,570 10,000 374 2,282 2,195 390 1,822 6,646 6,023 5,760 6,563 1
Slide 32: Total Liabilities & Shareholder's Equity
Our Bank Stand Alone Financial Snap Shot Total Liabilities & Shareholder’s Equity EGP million 30,000 25,335 25,000 21,250 8855 20,000 6903 14,037 14,592 1,208 13,004 15,000 12,657 1265 1,400 982 541 1,891 442 963 1265 1,733 10617 503 938 870 904 1,150 1192 1,150 1,150 1,150 896 10,000 426 414 886 1,
Slide 33: Loans to Deposits Ratio and Development of Loans
Our Bank Stand Alone Financial Snap Shot Loans To Deposits Raito 68% 14000 EGP Million 66.9% 66% 11,378 12000 64% 9,626 10000 8,869 62.0% 62% 61.3% 8,134 62.1% 7,505 7,558 8000 Total Loans excluding 59.5% 6,568 subsidized loans 60% 60.2% 58.2% 6000 Total Deposits 58% 6,587 4000 Loans to Deposits Rat
Slide 34: NPLs and Net Interest Income
Our Bank Stand Alone Financial Snap Shot NPL’s to Total Loans EGP million 500 EGP million Non-Performing Loans 8% 9000 450 7,845 111.3% 105.2% 104.7% ,6362 8000 400 7% 7,100 6.8% ,6588 7,100 6,989 7000 350 6% 6,189 86.8% 6000 300 5% 5.9% 5.4% 111.2% 3.9% 5000 250 5.4% 112.1% 113.5% 4% 3.9% 3.5% 433
Slide 35: Standalone Financials
Our Bank Standalone Financials Bank Standalone Financials 1/1/2014 till 31/12/2014 On 1/1/2015 till 31/12/2015 EGP million 60% 2000.00 1832 51.3% 1800.00 50% 1600.00 37.8% 1400.00 40% 39.0% 118935.1% 36.5% 35.0% 1200.00 1028 30% 1000.00 674 800.00 20% 600.00 501 492 438 306 400.00 10% 189 159 174 12
Slide 36: Loan and Deposit Book Breakdown 2015
Our Bank Standalone Financials Loan Book Break Down 2015 Deposit Book Breakdown 2015 27.2% 27.8% 36.8% 72.8% 35.4% Retail Loan Book Corporate Loan Book Mortgage Fianance Retail Deposits Book Corporate Deposits Book 36
Slide 37: Loan to Deposit Ratio
Our Bank Standalone Financials Loan to Deposit Ratio Q3-2015 6,587 Loan to Deposit Ratio 56% 11,733 Total Deposits Total Loans (Exluding Subsidized Loans) 37
Slide 38: Net Profit Breakdown
Our Bank Net Profit Breakdown 1/1/2015 till 31/12/2015 Commercial Banking Real Estate Item Activity Activity Total Total Revenue 2,253,710 320,944 2,574,655 Total Expenses 1,727,426 172,551 1,899,977 Net Profit Before Taxes 526,284 148,393 674,678 Taxes 143,135 40,359 183,494 Net Profit After Taxes
Slide 39: Net Profit Breakdown Full Year 2014 vs. 2015
Our Bank Net Profit Breakdown Full Year 2014 Vs. 2015 Full Year 2014 Full Year 2015 Commercial Commercial Banking Real Estate Banking Real Estate Item Activity Activity Total Item Activity Activity Total Total Total 1,486,837 268,227 1,755,064 2,253,710 320,944 2,574,655 Revenue Revenue Total Total
Slide 40: Net Profit Breakdown Full Year 2014 vs. 2015
Our Bank Net Profit Breakdown Full Year 2014 Vs. 2015 3,000,000 2,574,655 2,500,000 2,000,000 1,899,977 1,755,064 1,500,000 1,316,560 1,000,000 674,678 438,504 491,184 500,000 306,152 132,351183,494 0 Total Revenue Total Expenses Net Profit Before Taxes Taxes Net Profit After Taxes Full Year 2014 Fu
Slide 41: Participation in the CBE Mortgage Finance Initiative
Our Bank Participation in the CBE Mortgage Finance Initiative • The Central Bank of Egypt (CBE) Launched this initiative in May 2014 • This initiative states that Mortgage Finance is given to Medium and low income clients • The Medium income clients ceiling is EGP 500 Thousands for a unit • The low
Slide 42: CBE Mortgage Finance Initiative: Number of Units
CBE Mortgage Finance Initiative Number of Units 10000 9462 9011 9000 8000 6978 7000 6670 6000 5000 4000 3000 2484 2341 2000 1000 451 143 308 0 Total 2014 Total 2015 Grand Total Low Income Medium Income Total 42
Slide 43: CBE Mortgage Finance Initiative: Value
CBE Mortgage Finance Initiative Value EGP 800,000,000.000 732,040,834.490 700,000,000.000 627,520,188.490 600,000,000.000 569,901,516.000 495,863,370.000 500,000,000.000 400,000,000.000 300,000,000.000 200,000,000.000 162,139,318.490 131,656,818.490 104,520,646.000 100,000,000.000 74,038,146.000 30,
Slide 44: Financial Review Consolidated
Financial Review Consolidated 44
Slide 45: Consolidated Financials
Our Bank Consolidated Financials EGP billion EGP billion Development of Liabilities & Net worth** 30 Development of Assets 27.28 30 27.28 24.9 24.9 23.03 1.07 23.03 1.830 25 2.11 25 22.3 22.1 1.265 22.3 22.1 2.9 2.4 2.700 20.3 1.15 20.3 1.2 1.3 2.0 4.98 2.0 2.3 1.265 20 17.8 1.76 20 17.8 1.9 1.2 1.2
Slide 46: Consolidated Financials
Our Bank Consolidated Financials EGP million EGP million Operating Profit Margins 56.8% Net Profit 60% 2000 900 792 1800 800 50% 46.7% 1600 700 40.7% 43.0% 37.5% 603 591 1400 600 568 40% 522 36.0% 36.1% 1200 500 30% 1000 1856 400 800 20% 300 577 238 575 1239 1178 1204 600 1054 196 934 1004 200 428 8
Slide 47: Our Stock
Our Stock q Housing & Development Bank
Slide 48: Fact Sheet
Our Bank Fact Sheet • Total Number of Issued Shares is 126,500,000 million with a book Value of EGP 10 • Last Div. / Ex. Date EGP1.00 on 14 Apr 2014 • Bonus share issue announced April 2014 at a rate of 0.1% of paid up capital • Bonus Share Distribution Date on 12th January 2015 • Last Cash Dividend
Slide 49: Our Stock Activity
Our Stock Activity 30 28.6 27.47 27.1 28 27.02 26.5 26.6 25.89 26 24.28 24 24 24 23 23 22.99 22.9 22.5 22.15 22 20.68 20.99 20.16 19.88 19.6 20 18.98 1919.41 18.24 18 16.22 15.75 15.7816 15.5 16 14.69 14.31 14.28 14.51 14.1 13.95 14 12 10 1/2013 10/2013 11/2013 12/2013 2/2013 3/2013 4/2013 5/2013 6/
Slide 50: Dividend / Share
Dividend / Share • HDB has been distributing cash dividend on annual bases. • HDB Full Year 2015 cash dividend generate a Yield of 7% • HDB Coupon 35 will be distributed on Wednesday 20th April 2016 for shareholders record on Tuesday 19th April 2016. • HDB Pay Out Ratio for 2015 is 39% Year 2009 201
Slide 51: Why HDB Stock?
Why HDB Stock? • HDB performance shows that there is a room for loan growth. • 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 w
Slide 52: Analyst Coverage
Analyst Coverage • HDBK is covered by the following coverage houses: Entity Contact Person E-mail EFG Hermes Elena Sanchez esanchez@efg-hermes.com CI Capital Monsef Morsy Monsef.Morsy@cicapital.com.eg Beltone Nancy Fahmy nfahmy@beltonefinancial.com Beltone Ahmed El Shazly aelshazly@beltonefinancial.
Slide 53: CSR
Our Bank CSR Non-Governmental Organization & Non Profit Organizations: Educational, Family and Society Development, Special Needs, Blind, Local Society Development, Patient Coverage, Mothers & Infants Coverage and Social Help Universities & Colleges: Sponsoring Student Competition, workshops, Resear
Slide 54: CSR
Our Bank CSR Governorates Activities: Charity Projects & environmental projects that governorates & Cities need to upgrade quality of people & it is done via Bank branches. (Example: street enhancements) Hospitals Activities: Sponsorship of Hospital units that look after children, Cancer, Liver, Kid
Slide 55: CSR
Our Bank CSR Youth Graduate Sponsorships: Plan training, secure jobs and conduct exhibitions for them Small & Medium Size Contractors Sponsorship: Prepare special training sessions with cooperation of the Social Fund for Development (SFD) and granting them SME’s projects to manage & execute and moni
Slide 56: Contact Us
Contact Us Mohamed Hamzawy Strategic Planning & Investment Officer Housing & Development Bank Telephone : +2-02- 33357170 Direct Telephone: +2-02-33357327 Fax: +2-02-37627053 Mobile: +2-010-25000551 H/Q 26 El Koroum Street – Mohandessian - Giza, Cairo –Egypt www.hdb-egy.com E-mail: mhamzawy@hdb-egy.
Housing & Development Bank — FY2015 Earnings Presentation on 6ix