The Housing and Development Bank (HDB) has reported outstanding financial performance for the first half of 2024. Net profits before income taxes and provisions reached EGP 7.69bn, a significant increase from EGP 4.37bn during the same period in 2023—an impressive growth of EGP 3.32bn or 75.7%. After income taxes, independent net profits amounted to EGP 5.158bn, up from EGP 3.015bn, representing a growth of EGP 2.143bn or 71.1%.
HDB’s continued strong growth trajectory underscores its position as one of Egypt’s leading comprehensive commercial banks, achieving substantial gains across all business sectors.
Ambitious Strategy
Hassan Ghanem, CEO and Managing Director of HDB, expressed pride in the bank’s sustained growth. He attributed this success to the bank’s ambitious strategy, which emphasizes diversification of activities. By doing so, HDB has attracted a larger client base and offered a wide range of tailored financial solutions. Ghanem highlighted the bank’s focus on building strong relationships with institutional and retail banking clients, providing customized solutions that meet diverse needs.
Ghanem also emphasized managing financing and operational costs effectively, especially in response to rising inflation rates. HDB’s unique business model has maximized opportunities while maintaining operational efficiency. Net operating income increased 64.2% to EGP 9.1bn in H1 2024. Net profits after provisions and income taxes rose to EGP 5.2bn, a growth of EGP 2.1bn or 71.1%.
Customer Satisfaction
Ghanem emphasized that the bank’s success in implementing its ambitious strategy, which places customer satisfaction at its core, has enabled HDB to expand its customer base and increase its market share. The bank has continued to strengthen client trust and encourage investment in its diverse range of products and banking services. As a result, customer deposits grew by 20.2% to EGP 121.7bn, up from EGP 101.3bn at the end of 2023, an increase of EGP 20.4bn for the period ending June 30, 2024. This growth was driven by a 23.4% increase in institutional deposits, which reached EGP 68bn, reflecting the bank’s commitment to diversifying its institutional deposit portfolio to reduce risks and enhance financial stability. Additionally, retail deposits rose to EGP 53.6bn, a 16.3% increase, demonstrating customer confidence in the bank’s products and services.
Sustainable Growth
Ghanem highlighted the bank’s continued development and its reinforced leading position in the Egyptian banking market, which has contributed to sustainable growth in its assets. The bank’s total assets reached EGP 149.9bn, up from EGP 125.1bn at the end of 2023, an increase of EGP 24.8bn or 19.9% during the period ending 30 June 2024. This growth was supported by the expansion of the bank’s loan portfolio across retail and corporate sectors, with total loans amounting to EGP 50.8bn, reflecting an 11.6% increase during the first half of 2024. This was driven by a 17.4% growth in corporate and institutional loans, which reached EGP 24.1bn, an increase of EGP 3.5bn, and a 6.8% growth in retail banking loans, which amounted to EGP 26.6bn, an increase of EGP 1.7bn. This underscores the bank’s commitment to continuing to expand its financing while maintaining the quality of its loan portfolio, ensuring sustainability, and increasing the coverage ratio to 131.9% as of 30 June 2024, up from 114% in 2023.
Loan-to-Deposit Ratio
Ghanem noted that the loans-to-deposits ratio stood at 41.7% during the first half of 2024. The increase in loan yields and similar revenues by 65.2% and the rise in the cost of deposits and similar expenses by 41.3% contributed to an 81.3% increase in net income from returns, amounting to EGP 8.214bn, up from EGP 4.530bn, an increase of EGP 3.684bn.
Ghanem confirmed that the bank has achieved outstanding returns thanks to effective strategies across its various sectors. The growth in net profits during the first half of 2024 led to an increase in the return on average equity to 61.53%, up from 53.45% during the same period the previous year, while the return on average assets rose to 7.5% from 5.63% over the same period. The capital adequacy ratio reached 25.49%, exceeding the minimum set by the Central Bank of Egypt, with the Tier 1 capital adequacy ratio standing at 24.36% and the Tier 2 ratio at 1.08%, underscoring the bank’s commitment to maximizing value for shareholders and all stakeholders.
Subsidiaries and Affiliates
Ghanem pointed out that the consolidated net profit of the bank and its subsidiaries and affiliates grew to EGP 5.97bn after income taxes, up from EGP 3.28bn, reflecting a growth of 81.8% compared to the same period, confirming the success of the bank in executing its strategic plan towards developing its group of companies and increasing investments.
In addition to the strong financial results, Ghanem expressed the management’s pride and ongoing efforts to establish sustainability standards across the bank’s various operational activities. This is reflected in the bank’s strategy, given its importance in supporting financial and banking stability to achieve sustainable development goals.
Sustainable Financing
Ghanem highlighted the bank’s commitment to adhering to all recognized sustainable practices in the banking sector, as well as its participation in financing several strategic projects that support the state’s transition towards a green economy and sustainable development. The bank is also keen on applying environmentally friendly solutions by participating in numerous initiatives aimed at achieving sustainability. The total sustainable financing allocated by the bank reached EGP 4.983bn across corporate financing, syndicated loans, and small and medium enterprises (SMEs).
Ghanem emphasized that creating sustainable value for all stakeholders is a strategic goal as well as an ethical commitment.
He explained that despite the challenges facing the Egyptian economy, the local economy has seen gradual stability during the first half of this year. The efforts to restore stability have begun to bear fruit, thanks to decisions made by the Central Bank of Egypt, which included raising the basic interest rate to curb inflation, allowing for a flexible exchange rate of the Egyptian pound against foreign currencies according to market mechanisms. This contributed to narrowing the gap between official and parallel exchange rates, stabilizing the currency market, and reducing inflation, resulting in relative stability. Additionally, the removal of certain restrictions on foreign currency transactions for credit cards had a positive impact on the credit rating agencies’ outlook on the Egyptian economy, as well as an improvement in economic indicators, which in turn enhanced the prospects for foreign investment inflows, reflecting increased confidence in the Egyptian economy.
Ghanem expressed his strong confidence in the ability of the Egyptian banking sector to face any potential economic developments, emphasizing that this sector can adapt and effectively respond to changing economic challenges.
He also reaffirmed the management’s full confidence in continuing to seize promising opportunities to achieve strong financial and operational results, driven by its effective strategy. The bank remains optimistic yet cautious as it continues to implement its ambitious plan, managing risks wisely to reinforce its leading and distinguished position in the banking sector, relying on its solid principles and flexibility to navigate economic changes.
