The Housing and Development Bank (HDB) disclosed net profit after tax of EGP 1.072bn in the first half of 2019 (1H19), compared to EGP 994.2m in 1H18, an increase of 7.8% and an increase of 11.6% over the profit target of the bank's ambitious budget for the six months that ended in June 2019. The bank said in a statement that it succeeded in achieving these results despite the limitations faced by the banking sector since the beginning of the new fiscal year. It explained that these challenges were the implementation of the new International Standard IFRS9, which aims to further hedge the expected credit losses (ECL) to strengthen the financial positions of banks, which requires the development of a sophisticated technological environment and technical qualification of the team responsible for the application of the standard. It added that these challenges also included changing the new tax policy on yields of treasury bills, which represents one of the investment tools in the Egyptian banks to employ their available liquidity, high prices of government services, and inflation in the prices of assets that the bank is buying to open new branches, which leads to increase in expenses and depreciation over previous years. According to the bank, it has succeeded in achieving these results also despite the great competition among banks to attract new customers, whether for deposits or loans, thanks to the professional management of the bank's senior management and the efforts of employees, which help to achieve the objectives of senior management to continue to achieve growth rates for all indicators of activity. The bank's performance indicators revealed that the loans and advances portfolio recorded EGP 14.85bn, a growth of EGP 1.24bn at the end of June 2019, a growth of 9.2%. Customer deposits also increased to EGP 37.2bn at the end of June 2019, with a growth of EGP 3.1bn (9.1%). The capital adequacy ratio was 19.95%, as per Basel II requirements, under the optimal application of credit policies with the bank's investment portfolio free from any risky assets. The growth rates in operating income items increased at the end of June 2019 compared to June 2018 with good rates, where total revenues reached EGP 2.07bn, compared to about EGP 1.9bn with an increase of EGP 165m, a growth of 8.7% over the same period of the previous year. Loans and similar products' revenues reached EGP 3.2bn against EGP 3.1bn, an increase of EGP 126m (4%) over the comparison period. The dividends of companies amounted to EGP 125m at the end of June 2019, compared to EGP 77m, marking an increase of EGP 48m (61.8%) over the same period last year. Administrative expenses increased by 27.2% due to the opening of new branches to reach out to all segments of society, especially those that do not have banking transactions. It comes as part of the bank's efforts to achieve the ambitious objectives of financial inclusion by providing banking services commensurate with all customers' needs, which enhances the bank's position in the banking market and increases its spread nationwide. The bank is also interested in making the required updates to its technological structure to provide the best and fastest service to its customers, all of which have resulted in an increase in depreciation expenses which led to an increase in general and administrative expenses. According to the bank, these results come after a series of procedures and facilities carried out by the bank, based on a strategy to meet the needs of customers through the development of competitive solutions and the introduction of new customer segments in line with the state policy and the Central Bank of Egypt in spreading the culture of banking and the development of financial inclusion thought to achieve greater growth rates in all the bank's indices to benefit the bank's shareholders.
