Housing & Development Bank · EGX:HDBK
Housing & Development Bank — Q2 2015 Earnings Presentation
51 slides from Housing & Development Bank's earnings presentation, August 2015
Slide 1: Housing & Development Bank Investor Presentation Q2 2015 Results
Housing & Development Bank Investor Presentation Q2- 2015 Results August 2015
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% 7% Misr Life Insurance Co. New Urban Communities Authority 15% 30% Housing Fincance Fund 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 Introduction of Participation in Continued Paid-in capital 1979 as a 2003: In 2006 stage I of the the CBE growth of increased to specialized Introduction provided an new IT system Mortgage real estate integrated EGP 1.2bn Finance Initiative e
Slide 10: 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 11: 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 Committee Investment Committee • Remuneration Committee
Slide 12: Our Organization Chart
Our Organization Chart Audit & Risk Committees Audit Division Chairman Compliance Division Risk Division Vice Chairman & MD Support Functions* MD For Engineering & Investments Credit Finance Marketing IT Investment Real Estate & Engineering Treasury Legal Investment Real Estate Development Financial
Slide 13: Business review
q Housing & Development Bank Business review
Slide 14: 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 974 million as at end of Q2-2015 and ownerships ran
Slide 15: 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 16: Our Equity Investments
Our Equity Investments Holding Company For Participation Serial Company Name Value in EGP Investment & Value in EGP % Development Participation % 1 * Holding Co . For Investment & Development 92.00% 365,000,000 Subsidiries 2 Housing & Development Co. For Real Estate Investment 60.00% 180,000,000 38.
Slide 17: 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 18: 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 19: Potential Upside of Revenue & Profit
Potential Upside of Revenue & Profit Land Bank Owned by HDB 30 June 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 31,778,193 108,072 Hu
Slide 20: Years in Review
Years in Review Item Break Down 2009 2013 2014 Revenue breakdown Banking EGP Million 930 1,251 1,322 Real Estate EGP Million 142 466 381 Deposits EGP Million 6,500+1200*** 8,800+1000*** 15,145+1000*** Loans EGP Million 6,800 6,400 7,100 Real Estate Activity Land meters squared 837,459 3,811,600** 47
Slide 21: 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 strive
Slide 22: 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 to attract new retail and Banking corporate costumers to our banking
Slide 23: Our Products Range
Our Products Range Retail Products Corporate Products Real Estate Products Current accounts Credit facilities Real estate financing Trade finance Real estate investment & Saving products development Limited investment banking Loan products services Construction of housing units* Debit/Credit /Prepai
Slide 24: Our Way Forward
Our Way Forward Increasing planned New core banking IT branch network set to Low loan/deposit ratio system allows handling capture a greater coupled with the recent of increased more portion of retail capital increase allowing complex products and a for increased and varied business to reach 100 len
Slide 25: Financial Review Stand Alone
Financial Review Stand Alone 25
Slide 26: Our Bank Financial Snap Shot
Our Bank Financial Snap Shot Standalone Financial Position*** 30 June 2015(EGP million) Total Loans 7,575 Total Deposits 10,682 Total Revenue 1,189 Net Operating Margin 51% Net Profit After Tax 322 NPL/Total Loans 5.4% Cost/ Income Ratio 62% Tier 1 capital – Basel I 22.84% Tier 1 capital – Basel II
Slide 27: Financial Snap Shot: Paid In Capital
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 Q1-2015 • Total Number of Issued Shares is 126 million with a book Value of EGP 10 • HDB is listed & traded on the Egyptian Stock Exchange (
Slide 28: Our Bank Visibility
Our Bank Visibility 180 152 156 156 160 140 118 120 120 114 98 100 80 58 59 59 61 62 62 60 55 40 64 64 65 65 68 68 68 20 0 2009 2010 2011 2012 2013 2014 Q1-2015 Branches P.O.S A.T.M 2009 Q2- 2015 Footprint 55 Branches, 98 ATMs, 64 POS 62 Branches, 152 ATMs, 68 POS 28
Slide 29: 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% 22.84% 30% 20% 25% 20.6% 19.8% 20% 13.7% 18.6% Capital increase: 15.8% 16.2% 15% 17.91% EGP500mn to 13.2% 15% 11.8% EGP1.2bn 11.2% 10% 9.4% 10% 5% 5% 2.3% 1.6% 1.
Slide 30: Stand Alone Financial Snap Shot: Development of Assets
Our Bank Stand Alone Financial Snap Shot EGP million Development of Assets 30,000 26,327 414 25,000 1,058 21,250 5,035 360 20,000 1,056 14,592 4,322 14,037 6,949 15,000 12,657 13,004 235 278 1,004 904 366 10,619 447 630 2,095 944 2,570 6,514 10,000 374 2,282 2,195 390 1,822 6,646 6,023 5,760 12,710
Slide 31: Stand Alone Financial Snap Shot: Liabilities & Equity
Our Bank Stand Alone Financial Snap Shot Total Liabilities & Shareholder’s Equity EGP million 30,000 26,327 25,000 21,250 9674 20,000 6903 14,037 14,592 1039 13,004 15,000 12,657 1265 1,400 982 1969 1,891 442 963 1265 10617 503 938 870 904 1,150 1192 1518 1,150 1,150 1,150 896 10,000 426 414 886 128
Slide 32: Loans to Deposits Ratio and Development of Loans
Our Bank Stand Alone Financial Snap Shot Loans To Deposits Raito 68% 12000 EGP Million 66.9% 10,682 66% 9,626 10000 8,869 64% 8,134 7,505 7,558 8000 62% 61.3% 62.1% 61.7% 6,568 Total Loans excluding 59.5% subsidized loans 60% 60.2% 6000 58.2% 6,587 Total Deposits 5,978 58% 4000 Loans to Deposits Rat
Slide 33: NPLs, Net Interest Margin 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% ,6362 7,575 8000 450 6,989 7,100 ,6588 7,100 111.3% 105.2% 103.9% 7% 6.8% 7000 400 6,189 350 6% 6000 86.8% 300 5% 5.9% 5000 5.4% 111.2% 3.9% 250 5.4% 112.1% 113.5% 4% 3.9% 3.5% 4000 433
Slide 34: Standalone Financials H1 2015 vs H1 2014
Our Bank Standalone Financials Bank Standalone Financials 1/1/2014 till 30/6/2014 On 1/1/2015 till 30/6/2015 EGP million 50% 900.00 46.8% 44.8% 45% 783 41.9% 800.00 40% 37.9% 700.00 36.1% 35% 600.00 550 29.8% 30% 451 31.3% 500.00 25% 397 400.00 20% 322 300.00 15% 240 219 187 200.00 10% 95 99 5% 59 6
Slide 35: Standalone Financials Q2 2015 vs Q2 2014
Our Bank Standalone Financials Bank Standalone Financials 1/4/2015 till 30/6/2015 On 1/4/2014 till 30/6/2014 EGP million 50% 450 427 44.8% 42.8% 40.3% 41.2% 40% 400 33.0% 350 30% 286 300 20% 208 250 221 10% 200 0% 144 150 122 119 -10% 86 100 51 47 -20% 38 50 30 -23.7% -30% 0 Interest From Loans Net
Slide 36: Net Profit Breakdown
Our Bank Net Profit Breakdown 1/1/2015 till 30/6/2015 Item Commercial Banking Activity Real Estate Activity Total Revenue 979,136 210,801 Total Expenses 670,763 67,305 Net Profit Before Taxes 308,373 143,496 Taxes 87,937 41,885 Net Profit After Taxes 220,437 101,612 Amounts in EGP Million Total Net
Slide 37: Net Profit Breakdown Full Year 2014 vs. H1 2015
Our Bank Net Profit Breakdown Full Year 2014 Vs. H1-2015 Full Year 2014 1/1/2015 Till 30/6/2015 Commercial Banking Commercial Banking Item Activity Real Estate Activity Item Activity Real Estate Activity Total Revenue 1,486,837 268,227 Total Revenue 979,136 210,801 Total Expenses 1,185,995 130,565 T
Slide 38: 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 June 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 39: Financial Review Consolidated
Financial Review Consolidated 39
Slide 40: Consolidated Financials: Assets and Liabilities
Our Bank Consolidated Financials EGP billion EGP billion Development of Liabilities & Net worth** 30 Development of Assets 28.25 30 28.25 1.12 24.9 2.800 24.9 23.03 2.00 23.03 25 25 22.3 22.1 1.265 22.3 22.1 2.9 2.4 2.700 20.3 1.15 5.04 20.3 1.2 1.3 2.0 2.0 2.3 1.265 20 17.8 1.76 20 17.8 1.9 1.2 1.2
Slide 41: Consolidated Financials: Profit and Returns
Our Bank Consolidated Financials EGP million EGP million Operating Profit Margins Net Profit 60% 1400 700 51.6% 603 591 1200 600 568 50% 46.7% 522 40.7% 43.0% 476 37.5% 1000 500 40% 36.0% 36.1% 400 800 30% 1239 1178 1204 600 300 577 238 20% 934 1004 196 874 400 200 428 794 387 374 326 578 518 10% 48
Slide 42: Our Stock
q Housing & Development Bank Our Stock
Slide 43: Fact Sheet
Our Bank Fact Sheet • Total Number of Issued Shares is 125,600,000 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 44: 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 23 23 22 20.68 20.99 20.16 19.88 20 18.98 19 19.41 18.24 18 16.22 15.7515.515.78 16 16 14.69 14.31 14.2814.114.51 13.95 14 12 10 Stock Data: Bloomberg / Reuters: HDBK EY / HDBK.CA 44
Slide 45: Dividend / Share
Dividend / Share • HDB has been distributing cash dividend on annual bases. • HDB in 2013 distributed cash dividend & Bonus share with 1:10 ratio • HDB Full Year 2014 cash dividend generate a Yield of 6% • HDB Coupon 34 was distributed on Wednesday 22nd April 2015 for shareholders record on Sunday 1
Slide 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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.
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