The results of the Housing and Development Bank (HDB) revealed that the bank achieved a net profit after taxes of EGP 1.393bn at the end of September 2018, up from EGP 887.6m in September 2017, marking an increase of 57%, and up by 112% from the bank's target in the nine months ending in September 2018, according to Fathy Sebaey, chairperson and managing director of the bank. El Sebaey said that the loan portfolio recorded an increase of EGP 2bn at the end of September, growing by 17.4%. The capital adequacy ratio is in accordance with the Basel II requirements which reached 20.49% with the optimal application of credit policies, with the investment portfolio of the bank free of any dangerous assets. He added that the operating income of the bank amounted to EGP 909m at the end of September 2018, rising by 40.7% compared to September 2017, highlighting the bank's success in achieving real returns from operations. El Sebaey further noted that the return on loans and similar revenues was EGP 4.6bn at the end of September 2018, up by 56.6% compared to September 2017. Moreover, the net income from returns reached EGP 2.4bn, up by 64.9%. The net income from fees and commissions increased by EGP 28.6m, up by 16.2%, while corporate dividends reached EGP 77.9m, up by 10.7%, explained the bank's managing director. “The bank's housing projects revenues have increased by EGP 73.4m at the end of September 2018 to EGP 370.3m, up by 24.7% compared to the same period of 2017,” El Sebaey said. Meanwhile, according to El Sebaey, administrative expenses increased by 31.4%, due to opening new branches to reach new clients, which enhances the bank's position in the market. Over and above, he said that the bank is keen on effecting the necessary updates to the banking technology structure in order to provide the foremost and fastest service to its customers, which in turn will lead to an increase in depreciation expenses, therefore leading to an increase in general and administrative expenses. According to Hassan Ghanem, vice chairperson of the bank's mortgage finance portfolio, in accordance with the Central Bank of Egypt's initiative, the bank reached EGP 6.7bn at the end of September 2018. He added that the bank is a market leader in the funding value of this initiative. Ghanem added that the bank's micro-finance portfolio has reached EGP 1.8m of direct funding and EGP 350m in indirect financing, with plans to boost funding further soon. Furthermore, the vice chairperson noted that the bank's loan-to-deposit ratio currently stands at about 46%, and it intends to realise high growth rates in this regard in the coming period. Moreover, Ghanem added that the bank is currently implementing an integrated banking system, noting that HDB is relying on diversification of its activities and tools to employ the available liquidity in order to achieve an agreeable profit margin in view of the current economic challenges. The focus of the bank's business plan is relying on being an integrated commercial bank capable of providing all financial and banking solutions, as well as benefiting from the bank's expertise in the field of housing and real estate, which gives it an added advantage within the local market, according to Ghanem. Regarding the bank's social role, Ghanem said the size of HDB's contribution to social responsibility is 2% of annual profits, which reached EGP 30m in 2018, mostly granted to the development of informal settlements, education, health, and civil society organisations. Additionally, he stressed that HDB supports the education sector in Egypt, because it suffers from weak funding, pointing out that the bank conducted a study, in cooperation with the American University in Cairo, to know how to guide the balance of social responsibility in the areas which benefit and develop society, which took about six months before implementing it.
