Housing and Development Bank (HDB) has cemented its leading position as one of the largest comprehensive commercial banks in the Egyptian market. Its high growth rates led to a qualitative leap in its business results in all sectors during the financial year ending in September 2024.
According to a statement issued by the bank, the results of independent business showed a growth in net profits before income taxes and provisions to EGP 12.275bn in September 2024, compared to EGP 6.943bn in September 2023, an increase of EGP 5.332bn, and a growth rate of 76.8%. Independent net profits after income taxes amounted to EGP 8.271bn compared to EGP 4.419bn, an increase of EGP 3.852bn, and a growth rate of 87.2%.
Sustainable Growth
Hassan Ghanem, CEO and Managing Director of the HDB, expressed his pride in the exceptional sustainable growth achieved by the bank, and its ability to continue achieving strong growth rates in terms of business results for all sectors until the end of September 2024. This reflects its ambitious strategy’s effectiveness and keenness to diversify its activities. The bank also focuses on strengthening and building strong and effective relationships with its clients in the corporate institutional and retail banking sectors. It is making this happen by providing innovative financial solutions specifically designed to meet their diverse requirements in terms of prices and costs.
Ghanem added that the bank continues to focus on improving the efficiency of operational processes and proactively managing financing costs to keep pace with the economic challenges resulting from high inflation rates, by adopting a flexible and innovative business model through which it achieved maximum benefit from all available opportunities, while ensuring effective management of resources. Net operating revenues increased by 66% to EGP 14.5bn during the first nine months of 2024.
Ambitious Strategy
He stressed that the bank’s success was thanks to it implementing its ambitious strategy accommodating existing and new customers and meeting their needs effectively. As a result, the bank was able to expand its customer base and increase its market share. Customer deposits increased by 25% to EGP 126.3bn by September 2024, compared to EGP 101.3bn by 2023, an increase of EGP 25bn, driven by an increase in institutional deposits to EGP 70.4bn, with a growth rate of 28%. Individual deposits also increased to EGP 55.9bn, with a growth rate of 21%.
Total assets
Ghanem pointed out the bank’s continued development of its leading position in the Egyptian banking market contributed to reaping the fruits and achieving sustainable growth in its assets. Total assets reached EGP 156.3bn by September 2024, compared to EGP 125.1bn by 2023, an increase of EGP 31.2bn, and a growth rate of up to 25%. The total loans amounted to EGP 53.7bn, with a growth rate of up to 18%, driven by the growth of the corporate loan portfolio to EGP 26.5bn, an increase of EGP 5.9bn, and a growth rate of 29%. The retail banking loan portfolio recorded EGP 27.2bn, an increase of EGP 2.3bn, and a growth rate of 9.3%.
Ghanem pointed out that non-performing loans decreased to 6.7% in September 2024, compared to 6.9% in 2023. This reflects the bank’s commitment and keenness to continue increasing the volume of its financing while maintaining the quality standards of the financing portfolio and ensuring the diversification of financing from different sectors to ensure its sustainable growth, with the coverage rate increasing to 130.7%, compared to 114%.
Loan-to-deposit ratio
He added that the total loans to deposits recorded 42.5% in September 2024, compared to 44.9% in 2023. The increase in loan returns and similar revenues by 70% and the cost of deposits and similar costs by 52% contributed to increasing net income from return to EGP 13.3bn, compared to EGP 7.3bn, an increase of EGP 5.9bn and a growth rate of 82%.
He pointed out that the bank achieved distinctive returns thanks to the effective strategies it adopts in its various sectors. The growth in net profit during the first nine months of 2024 resulted in an increase in the return on average equity to 60.1%, compared to 49.1% y-o-y. The return on average assets reached 7.8% compared to 5.3%. The capital adequacy ratio also recorded a rate of 30.3%, which exceeds the minimum.
CBE determined that the capital adequacy ratio reached 29.17% for the first tier, and 1.13% for the second tier.
Subsidiaries
Ghanem highlighted the growth in the net profit of the consolidated financial statements of the bank and its subsidiaries and sister companies, reaching EGP 9.4bn after income taxes in September 2024, compared to EGP 4.8bn in September 2023, with a growth rate of 98.1%. He added that his bank has adopted an ambitious expansion strategy developing and modernizing the technological infrastructure and providing it with the latest digital systems through growing investments to meet the rapid and successive digital transformation.
He explained that these efforts resulted in an increase in the number of people activating Internet and mobile banking services by 28% in the third quarter of the year, compared to the same period in 2023. The number of mobile wallet application users also increased by 52%, and the percentage of transactions via mobile and Internet banking increased by 47%.
Sustainable Financing
Ghanem stressed the management’s continuous efforts to establish sustainability standards in the bank’s various operational activities. He noted that the bank was keen on following popular sustainable practices in the banking sector, and participating in financing several strategic projects that support the state’s orientations toward the transition to a green economy and sustainable development.
Ghanem explained that the total financing allocated to sustainable financing reached EGP 5.8bn at the level of the corporate finance sector, syndicated loans, and small and medium enterprises during the nine months ending September 30, 2024. He noted that creating sustainable value for all relevant parties is a strategic goal and a moral obligation. He also explained that despite the challenges facing the Egyptian economy, the local economy witnessed gradual stability during the first nine months of this year, as the efforts made to restore stability began to bear fruit thanks to the decisions taken by CBE. It included raising the basic interest rate to reduce inflation rates, in addition to the flexibility of the exchange rate of foreign currency against the Egyptian pound to be determined according to market mechanisms. This helped reduce the gap between the official and parallel market exchange rates, control the currency market to achieve relative stability, and remove some restrictions on credit card transactions in foreign currencies.
The strength of the banking sector
Ghanem expressed his great confidence in the ability of the Egyptian banking sector to deal with any economic developments that may arise in the future. He stressed that this sector can adapt and deal effectively with changing economic challenges. Furthermore, Ghanem said that despite these challenges, international rating institutions, such as Fitch Solutions, have improved Egypt’s credit rating from B- to B with a stable outlook, reflecting confidence in the stability of the Egyptian economy, its creditworthiness and its ability to confront current crises.
Ghanem also stressed the management’s complete confidence in seizing all the promising opportunities available to achieve strong financial and operational results thanks to its effective strategy, and the bank’s ambitious plan with optimism and caution while managing risks wisely. This aims to enhance its leading and distinguished position in the banking sector, based on its established principles and the flexibility it enjoys in dealing with changes in the economic scene.
