Housing & Development Bank Investor Presentation Half Year 2019 - - PowerPoint PPT Presentation

Housing & Development Bank

Investor Presentation

Half Year 2019 9 Month-2019

November 2019

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 a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by these statements. Examples may include financial market volatility; actions and initiatives taken by current and potential competitors; general economic conditions; and the effect of current, pending and future legislation, regulations and regulatory actions. Furthermore, forward looking statements contained in this document that reference past trends or activities should not be taken as a representation that such trends or activities will continue.

• Housing and Development Bank (HDB) does not undertake any obligation to update
• r revise any forward looking statements. Accordingly, readers are cautioned not to

place undue reliance on forward looking statements, which speak only as of the date on which they are made.

• This document is provided for informational purposes only. It does not constitute an
• ffer to sell or a solicitation of an offer to buy any securities or interests described within

it in any jurisdiction. We strongly advise potential investors to seek financial guidance when determining whether an investment is appropriate to their needs.

Note: Rounding differences and figures may appear through out the presentation.

2

Content

• Historical overview
• Business review
• Financial review Stand Alone
• Stock
• Coverage
• Contact Us

3

A progressing commercial bank with an attractive real estate flavor; your window on two sectors

4

Historical overview

5

Our Start

• Egypt’s Housing & Development Bank was established

40 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 estate market.

• By the late 1980s & 1990’s HD Bank had already

successfully concluded many flagship developments, which brought new housing units to many urban communities and strategic investments in the country’s northern coastal resorts.

6

Ownership Structure

7 29.81% 5.03% 8.92% 8.29% 7.41% 6.32% 9.74% 24.4800%

Shareholders Structure

New Urban Communities Authority (NUCA) Egyptian Endowment Authority Misr Life Insurance Company Misr Insurance Company Housing Projects Fund Ali Ben Hassan El Dayekh REMCO Egypt - Abdel Moneim El Rashed Free Float

5.03%

Our Transformation

8

• In 2003, Egyptian banking law 88 prohibited the existence of specialized banks

in Egypt, and HDB was restructured to become a conventional Commercial bank, with a new management appointed. The bank nevertheless still owns several plots of land which will be developed into commercial and residential projects for sale.

• The New Management implemented a five-year plan to turnaround the bank that

started in 2003 till 2008 and in 2009 a new 5 year plan was set in place till 2013. However, due to the political & economic situation the implementation time line was extended till 2017. Then a new 5 year plan focused on heavily investing in new IT systems, renovating its branch network and increasing its marketing

• efforts. HDB currently has a branch network of 88 branches based on Full Year

Q3-2019. Plus, a new 5 year Strategic plan from 2018 till 2022 was set in action. As a result we became:

• A growing commercial bank in the Egyptian market.
• Upgraded the human capital of quality to support the growth of both the

banking and real estate businesses and capitalizing on strong ICT Platform.

• New Bank products and Real Estate Projects continue to be the key at

increasing our growing client base & performance based on top notch IT.

Our Journey

Founded in 1979 as a specialized entity for real estate development & provision of housing units to different sectors of the economy Initial capital

• f

EGP 18mn Registered

• n

EGX in 1983 Continued growth of real estate investments 1993: raised paid-in capital to EGP 54mn 2000: raised paid-in capital to EGP 122.3mn through existing shareholders 2003: Introduction

• f new

banking law Bank restructured, increased focus on growth of core banking business Further expansion in real estate development to be carried

• ut through

subsidiaries In 2006 provided an integrated banking system to cater to the retail sector Raised: paid- in capital increased to EGP 500mn through existing shareholders In 2009 investment in Hyde Park Development Paid-in capital increased to EGP 1.2bn through a private placement and portion through HDB`s ESOP First time non- Egyptians allowed

• wnership of

HDB shares; their ownership reached 20% Vitalized the corporate identity campaign Introduction of stage I of the new IT system to streamline performance Increased street visibility through increased branches, ATMs and POS Increased real estate activities, investment reached EGP 912 mn

1979 1993 2003 2006 2010 2013

9

2014

Participation in the CBE Mortgage Finance Initiative for Medium & Low Income Housing Increased street visibility through increased branches, ATMs and POS Started the restructuring of Hyde Park Development after using the Equity Associate method

Our Journey

10

2015

Participation in the CBE Mortgage Finance Initiative for Medium & Low Income Housing and becoming number 1 market share among peers. Increased street visibility through increased branches, ATMs and POS

2016

Participation in the CBE SME’s lending initiative that lends loans with a subsidized 5% interest rate. Market Leader in CBE Mortgage Finance Initiative with EGP 2,0 Billion as of Full Year 2016

2017

Participation in the CBE SME’s lending initiative that lends loans with a 5% interest that have reached 12% out

• f the 20%

required by 2019. Allotted another EGP 1 Billion under the CBE Mortgage Finance Initiative reaching a total

• f EGP 3,6

Billion.

2018

Allotted another EGP 1,3 Billion under the CBE Mortgage Finance Initiative reaching a total

• f EGP 4,9

Billion to more than 54,309 clients.

9 Month 2019

Allotted another EGP 300 million under the CBE Mortgage Finance Initiative reaching a total

• f EGP 5,340

Billion to more than 58,620 clients.

Board of Directors

11

Egyptian Awkaf Organization 1 Member New Urban Communities Organization 4 Members Misr Insurance Company 1 Member Housing Financing Fund 1 Member Misr For Life Insurance 1 Member Vice Chairman & Managing Director (Executive) Hassan Ghanem Independent Board Member 1 Member

Chairman Fathy El Sebai

Total Number of 11 Board Members

• Board composition: 1 Executives and 10 Non-Executives
• 9 Board Committees meeting on a regular basis, namely:

Ø Audit Committee Ø Risk Committee Ø Remuneration Committee Ø Governance & Nomination Committee Ø Executive & Operational Committee Ø Investment Committee Ø Engineering Committee Ø IT Enhancement Committee Ø CSR & Donations Committee

• Remuneration Committee comprised of the main shareholders and independent Board Members
• Independence of Compliance, Internal Audit and Risk Management functions
• Functioning Committees ensure that HDB Management fully complies with all regulatory requirements as well as

internal policies ensuring strict adherence to best practices with respect to our Stake holders like clients, employees and third parties dealings. 12

Corporate Governance

Our Organization Chart

Chairman

Remuneration Committee Executive Committee Assistant Managing Director for Engineering & Investments Investment Committee

13

Board Affairs Audit Committee Governance & Nomination Committee

Board Of Directors

Technical Office Risk Committee Engineering Committee IT Enhancement Committee CSR & Donations Committee

Assistant Managing Director for Corporate Banking, Treasury & Syndications Head of Legal Department Assistant Managing Director for Retail Banking

Vice Chairman & Managing Director

Assistant Managing Director for Banking Operations Mortgage Finance Department Planning & KPI Department Security Department PR & Marketing Department Financial Department Human Resources Department National Housing Projects Department National projects Digital Reservations Department Support & Follow Up Department Financial Control Department Investor Relation Department Customer Protection Department CRO IT Security & Governance Internal Audit Corporate Governance

What We Aim For

Our Vision To be within the top 10 ranked commercial banks in Egypt, while maintaining the current high operational efficiency. Our Mission Search for excellence in providing our commercial & real estate products through the continuous upgrade of our human capital and we strive to excel in providing our services to meet

• ur

clients and shareholders expectations.

14

Our Strategy

Accelerate Overall Banking Growth

HDB Strategy

Capitalize On Our Housing Reputation To Attract New Clients Into Our Banking Business Increase Customer Base Provide Integrated Real Estate Services

Maximize Profitability

Continued Customer Satisfaction

Provide Integrated Real Estate Services Construction and sale of housing units through affiliated companies Provide real estate financing Supervision of implementation of housing projects Real estate business appraisal Capitalize On Our Housing Reputation To Attract New Clients Into Our Banking Business Capitalize on our reputation and experience in providing full range of housing and property development services plus the current banking retail client base to attract new SME’s costumers to our banking services. Increasing Customer Base Enhance corporate lending, increase SME’s financing whether through tailored loans, or shelf products. Improve client access through increased street visibility, introducing a wider variety of short, medium and long term saving schemes Continued Customer Satisfaction Introducing new products to capture targeted growth in both banking and real estate business 15

Our Products Range

Retail Products

Current accounts Saving products Loan products Debit/Credit /Prepaid Cards Life insurance services Safe deposit boxes Payroll services Vodafone cash Housing installment and e-payments

Corporate Products

Credit facilities Trade finance Limited investment banking services e-payments Financing customs & taxes Specialized services to SMEs Treasury & cash management Financing customs & taxes Specialized services to SMEs Treasury & cash management

Real Estate Products

Real estate financing Real estate investment & development* Construction of housing units* Supervision of implementation of the projects owned by HDB & others * (NUCA) Real Estate consulting and engineering services** Business appraisal and feasibility studies**

• *Through HDB’s subsidiaries & affiliates
• ** Through the bank investment & Real Estate

16

SME’s Products

Credit facilities Trade finance e-payments Financing customs & taxes Financing customs & taxes Specialized services to SMEs Treasury & cash management

Our Way Forward

Introduction of Internet, Online and Mobile banking services to the bank clients in 2019 Increasing planned branch network set to capture a greater portion of retail business to reach 100 branches by end of 2020 Increase Loan & Deposit Books coupled with the participation in the CBE SME’s & Mortgage Finance Initiatives Hidden equity; around 2 million sqm of undeveloped land carried at an average cost of EGP 750/msq Trading at Price to Book

• f around (P/B 19) 1 &

Price to earnings (PE)of around 3.8 as estimated for full year 2019 HIGH GROWTH PROSPECTS OVER THE NEXT FIVE YEARS

17

Business Review

18

Housing & Development Bank Banking Business Real Estate Business HDB has direct and indirect ownership positions in 17 subsidiaries and sister companies; total EGP 1,663,314,124 million as of Q3-2019 and ownerships range between 16% to 92% with activities including:

• Mortgage finance
• Property development
• Property management services
• Insurance
• Real estate development
• Management of real estate funds
• Leasing Finance

Investment Business

Includes some subsidiaries & sister companies

Our Business Model

19

Our HDBK Group Structure

20

Housing & Development Bank Group

Housing & Development Co. For Real Estate Investment 60% Ownership by HDBK

EL-Tameer Co. For Housing & Utilities 35% Ownership by HDBK City Edge Development 38% Ownership by HDBK El-Tameer Co. For Security & care services 39% Ownership by HDBK El-Tameer Co. For Mortgage Finance 24.80% Ownership by HDBK El-Tameer Co. For Asset Management 15.70% Ownership by HDBK El-Tameer Co. For Real Estate Investment Funds 24% Ownership by HDBK HD Company For Trading Securities 20% Ownership by HDBK Tameer Co. for Real Estate Investment Development 37% Ownership by HDBK El-Tameer Co. For Financial & Real Estate Marketing 39% Ownership by HDBK El-Tameer Co. For Technological services 40% Ownership by HDBK Obelisk for investment fund management 30% Ownership by HDBK Hyde Park Co. for Real Estate Development 36.90% Ownership by HDBK

38% 51% 76% 31% 21% 51% 60% 60% 51% 18.2%

• Blue Line elaborate Bank Direct

Investment

• Red Line elaborate Holding Company

Investment

2%

EL-Tameer Co. For Security & Money Transfer 40% Ownership by HDBK

Holding Co . For Investment & Development 92% Ownership by HDBK

EL-Tameer Co. For Housing & Utilities 35% Ownership by HDBK El-Tameer Co. For Security & care services 39% Ownership by HDBK EL-Tameer Co. For Security & Money Transfer 40% Ownership by HDBK Tameer Co. for Real Estate Investment Development 37% Ownership by HDBK El-Tameer Co. For Financial & Real Estate Marketing 39% Ownership by HDBK El-Tameer Co. For Technological services 40% Ownership by HDBK Hyde Park Co. for Real Estate Development 36.90% Ownership by HDBK EL-Tameer Co. For Housing & Utilities 35% Ownership by HDBK El-Tameer Co. For Security & care services 39% Ownership by HDBK

Our Equity Investments

21

Serial Company Name Participation Direct & Indirect Value in EGP Subsidiaries 1 * Holding Co . For Investment & Development 92% 460,000,000 2 Housing & Development Co. For Real Estate Investment 94.96% 180,000,000 Sister Companies 3 EL-Tameer Co. For Housing & Utilities 35% 5,250,000 4 El-Tameer Co. For Mortgage Finance 24.83% 175,161,370 5 El-Tameer Co. For Asset Management 62.62% 942,000 6 El-Tameer Co. For Security & care services 94.82% 1,521,000 7 El-Tameer Co. For Real Estate Investment Funds 93.83% 4,800,000 8 El-Tameer Co. For Financial & Real Estate Marketing 94.20% 2,178,158 9 El-Tameer Co. For Technological services 86.92% 4,000,000 10 Tameer Co. for Real Estate investment Development 92.77% 74,000,000 11 HD Co . For trading securities 48.09% 1 12 Obelisk for investment fund management 49.32% 1 13 City Edge Development 39.52% 491,473,000 14 Misr Sinai Tourism Company 30% 1 15 El Tameer Company for Security & Money Transfer 94.82% 6,000,000 16 Gardien Leasing Company 78% 59,366,343 Company Name Participation % Value in EGP Equity 1 Hyde Park Real Estate Co. For Development 53.66% 198,622,250 Total 1,663,314,124

HDB Financials Components

• 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, subsidiaries and equity associates companies.

22

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 subsidiaries that are sold off Plan or during the

construction phase. In both Models revenue is recognized & recorded upon delivery of units.

23 * All sales will be done at current market prices Ready to Sell Units across Projects 100% Owned by HDB For Q3-2019

Q3- 2019 Project Name Description Segment Total Number

• f Units

Sold Units Avalaible Units for Sale October - El Montazah - Phase 1&2&3 Residential Middle 900 801 99 New Cairo - Acacia - Phase 1 &2 &3 Residential Upper Middle 813 519 294 Ganat El Obour Residential & Commercial Economic 1620 1617 3 El Arish City Residential Economic 184 4 180 Qena Governerate Residential Economic 252 246 6 Administrative Building Plot 28 Office Upper Middle Leased New Cairo - Palma Residential & Commercial Economic 95 16 79 Administrative Building- SOHAG Residential & Commercial Economic 51 5 46 Hurghada Residential & Commercial 174 1 173 Diffierient Sites Residential & Commercial 76 17 59 4,165 3,226 939

Potential Upside of Revenue & Profit

24 * All plots will be developed and sold as final product with current market price

HDBK Land Bank* as of Q3-2019 Item Cost EGP Million Land Area square meter 6 October Project El Montazah - Phase 2 and 3 654,150 3,115 New Cairo - Acacia - Phase 2&3 29,847,940 6,800 Hurgada - Red Sea Land 6,413,588 5,742 El Korum Street Land Number 24 - Office Building 26,617,810 748.85 Helwan Land 125,055,798 105,000 Total 188,589,286 121,406

25

Potential Upside of Revenue & Profit

Work In Progress as of Q3-2019 Project Name Type of Units Number of Units Value in Million EGP Hurgada - Industrial Zone Apartments 140 35,886,814 Hurgada Commercial Buliding 102,232 El Gawahara - Port Said Apartments 294 72,799,132 Acacia – Commercial Mall Commercial Buliding 25,349,535 6 October South District Commercial Buliding 12,063,896 Koroum Office Building Commercial Buliding 3,799,582 434 150,001,191

26 55 58 59 59 61 62 64 68 80 84 86 86 88

64 64 65 65 68 68 68 70 71 71 72 74 75

98 114 118 120 152 156 156 174 224 230 235 235 264

50 100 150 200 250 300

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Branches P.O.S A.T.M

Our Bank Visibility

Financial Review Stand Alone

27

28

• Total Number of Issued Shares is 126,500,000 million with a book Value of

EGP 10

• HDB is listed & traded on the Egyptian Stock Exchange (EGX)
• Last Div. / Ex. Date EGP 1.5 on 23rd May 2018 for full year 2017
• Est. Free Float 39.9%

Our Bank Financial Snap Shot

200 400 600 800 1000 1200 1400

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3-2019

Paid in Capital

Our Bank Standalone Financials

29

Bank Standalone Financials 1/1/2019 till 30/9/2019 On 1/1/2018 till 30/9/2018

10.73 1,520 1,874 289 220 2,126 4,879 9.84 1,394 1,876 370 205 2,385 4,625

9.0% 9.0%

• 0.1%
• 21.9%

7.3%

• 10.9%

5.5%

• 25%
• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15% 0.00 1000.00 2000.00 3000.00 4000.00 5000.00 6000.00

Earnings Per Share Net profit for the year Net profit for the year before taxes Housing projects' profits Net fees and commisions income Net interest income Interest From Loans & Similar Income

1/1/2019 - 30/9/2019 1/1/2018 - 30/9/2018 Y-o-Y

EGP million

30

Capital Adequacy Ratio

Capital increase: EGP500mn to EGP1.2bn

Return on Assets & Equity

13.7% 24.2% 24.2% 25.5% 25.2% 23.7% 21.62% 20.6% 19.8% 18.6% 16.58% 13.76% 17.22% 21.0% 17.18% 19.95% 20.74%

0% 5% 10% 15% 20% 25% 30%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Tier 1 Capital to Basel I Tier 1 Capital to Basel II 29.1% 11.2% 9.4% 11.8% 13.2% 15.8% 19.9% 23.0% 30.2% 33.3% 12.8% 20.7% 27.0% 2.3% 1.6% 1.3% 1.7% 1.7% 1.4% 1.9% 2.0% 2.1% 3.4% 1.3% 2.2% 3.1%

0% 5% 10% 15% 20% 25% 30% 35%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Return on equity Return on assts

Our Bank Stand Alone Financial Snap Shot

31

Our Bank Stand Alone Financial Snap Shot

34.9% 37.1% 38.7% 47.1% 40.0% 42.0% 56.0% 62.0% 54.0% 51.5% 47.0% 42.0% 44.0% 65.1% 62.9% 61.3% 52.9% 60.0% 75.3% 73.0% 74.0% 74.0% 69.0% 61.0% 67.0% 68.0%

30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Net operating margins Cost / Income ratio

Unusually high TB rates & auction land sales distort ratios

Net Operating Margins & Cost to Income Ratios

32

1,146 1,242 1,265 1,546 1,537 1,770 2,566 3,632 5,715 7,109 2,021 3,967 5,814 882 1,012 1,062 1,244 1,202 1,332 1,891 2,712 4,226 4,914 1,239 2,653 3,940 264 230 203 302 335 438 674 920 1,489 2,195 773 1,314 1,874

244 203 176 206 247 306 492 644 1,075 1,625 612 1,072 1,520

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Total Revenue Total expenses Net profit before tax Net profit After tax

EGP million

Our Bank Stand Alone Financial Snap Shot

Net Profit Consistent Annual Net Profit Growth

Cost to Income Ratio Calculated like Market

33

Our Bank Stand Alone Financial Snap Shot

1,861,221,533 2,578,016,126 2,554,512,805 3,632,391,994 5,715,596,734 2,021,270,915 2 021 270 915 3,759,291,590 5,814,777,257 497,407,655 632,305,929 1,073,100,942 1,645,620,907 2,066,412,394 1,924,450,070 426,620,607 763,914,033 1,158,980,964 26.72% 24.53% 42.01% 45.30% 36.15% 95.2% 21.1% 20.3% 19.9% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 6,000,000,000 7,000,000,000

2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Revenue Cost to Income Mkt Percent

34

EGP million

Our Bank Stand Alone Financial Snap Shot

Development of Assets

31,965 14,037 13,004 14,592 12,657 21,248 25,335 31,965

2,149 2,622 3,981 3,584 4,607 8,835 11,087 14,247 33463 25,402 14,769 15,164 16,702 1,822 2,282 2,095 2,195 2,570 4,322 5,039 6,135 4742 6,162 15,650 15,372 12,839 390 630 904 944 1,004 1,056 1,100 1,127 1038 917 920 933 995 92 112 132 154 152 161 242 310 509 696 729 845 887 374 447 278 366 235 360 361 833 745 1,004 1,140 1,251 1,631

5,792 6,563 6,646 5,760 6,023 6,514 7,506 9,313 11439 13,610 14,484 14,855 16,550

10,000 20,000 30,000 40,000 50,000 60,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Cash,Mkt.Securities&T-Bills Investments Real Estate Activity Fixed Assets Other Net Loans 10,619 47,791 47,692 48,420 49,630 51,936

35

Total Liabilities & Shareholder’s Equity

EGP million

Our Bank Stand Alone Financial Snap Shot

47,692

6,568 7,505 7,558 8,134 8,869 9,626 11,733 13,642 40,884 34,122 36,502 37,223 38,814 1,796 1,671 1,553 1,455 1,310 1,282 1,733 2,807 4,156 5,218 686 683 658 745 957 980 886 896 1192 541 940 206 1,185 2,990 2,387 1,965 414 870 904 938 963 982 1,208 1,574 2,297 3,610 3,512 3,922 4,372 426 503 1,891 442 1,400 6903 8855 11,731 2,675 2,336 2,688 2,895 2,524 10,000 20,000 30,000 40,000 50,000 60,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Customer Deposits Long Term Loans (incl.subsidised) Other Inv Reserves & Retained earnings Down Payments - Real Estate Other Obligation Taxes

12 , 657 14,037 21,250

10,617 31,959

51,526 31,993 13,004 14,635 25,427 47,692 48,420 49,630 47,791

36

Our Bank Stand Alone Financial Snap Shot

Deposit Development

EGP million

6,568 7,505 7,558 8,134 8,869 9,626 11,733 13,641 40,884 34,122 36,501 37,223 38,813 26.6% 14.3% 0.7% 7.6% 9.0% 8.5% 21.9% 16.3% 81.3%

• 17%

7.0% 2.0% 4.27%

• 40.0%
• 20.0%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Deposits Deposits Growth

37

Our Bank Stand Alone Financial Snap Shot

Deposit Composition & Growth YoY

EGP million 5,819 6,171 6,985 8,539 9,070 24,416 16,336 15,605 18,008 16,495 2,314 2,697 2,640 3,194 4,571 16,468 17,786 20,896 19,215 22,318 8,133 8,868 9,625 11,733 13,641 40,884 34,122 36,501 37,223 38,813

0% 9% 9% 3% 16% 200%

• 17%
• 1.3%

19.3% 15.7%

• 50%

0% 50% 100% 150% 200% 250% 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Retail Deposists Corporate Deposits Total Deposit Book Growth YoY

38

Loan Development

Our Bank Stand Alone Financial Snap Shot

EGP million

6,188 6,989 7,100 6,362 6,588 7,100 8,207 10,456 13,409 15,687 16,183 16,638 18,392 1.2% 12.9% 1.6%

• 10.4%

3.6% 7.8% 15.6% 27.4% 28.2% 17.0% 14.5% 2.8% 10.5%

• 15.0%
• 10.0%
• 5.0%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Total Loans Loan BookGrowth

39

EGP million

Our Bank Stand Alone Financial Snap Shot

Development of Loan Book by Type

3,099 3,248 3,260 2,702 2,831 2,780 2,908 3,193 5,865 7,099 7,440 7,632 8,922 1,746 2,202 2,290 2,118 2,123 2,613 3,006 2,586 2,358 2,182 2,209 2,347 2,700 1,318 1,523 1,534 1,525 1,617 1,691 2,278 3,793 5,169 6,387 6,515 6,639 6,747 6,189 6,989 7,100 6,362 6,588 7,100 8,209 9,588 13,409 15,687 16,183 16,638 18,392

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

Corporate Retail Mortgage Credit cards Total

40

Our Bank Stand Alone Financial Snap Shot

Loan to Deposit Ratio

EGP million

6,568 7,505 7,558 8,134 8,869 9,626 11,733 13,642 28,114 34,122 36,501 37,223 38,813 4,393 4,518 4,636 4,734 5,278 5,978 6,587 9,590 12,643 15,066 15,608 16,063 17,822

66.9% 60.2% 61.3% 58.2% 59.5% 62.1% 56.1% 70.3% 45.0% 44.2% 42.8% 43.2% 45.9%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Total Deposits Total Loans (Exluding Subsidized Loans) Loan to Deposit Ratio

41

Our Bank Stand Alone Financial Snap Shot

42.5% 57.5%

Deposit Book Breakdown Q3- 2019

Retail Deposits Book Corporate Deposits Book

42

Our Bank Stand Alone Financial Snap Shot

Loan Book Break Down – Q3-2019

51.5% 48.5%

Retail Loan Book Corporate Loan Book

Our Bank Standalone Financials

38,813 17,822 45.9%

Loan to Deposit Ratio Q3-2019

Total Deposits Total Loans (Exluding Subsidized Loans)

44

Our Bank Stand Alone Financial Snap Shot

NPL’s

EGP million

6189 6989 7100 6362 6588 7100 8211 9590 12,643 15,066 15,608 16,638 18,392 239 245 278 433 391 385 445 372 736 838 1144 1482 1,815 3.86% 3.51% 3.92% 6.81% 5.94% 5.42% 5.42% 3.88% 5.82% 5.56% 7.33% 9% 9.9%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Total Loans Non-Performing Loans Non-Performing to Total Loans

45

Net Interest Margin

Our Bank Stand Alone Financial Snap Shot

1.1% 1.4% 1.4% 2.1% 3.4% 3.6% 4.8% 4.3% 4.3% 5.6% 4.9% 6.9% 4.9% 4.40% 4.20% 7.80% 7.7% 6.90% 7.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 Q 1

• 2

1 9 Q 2

• 2

1 9 Q 3

• 2

1 9

NIM

NIM

46

Our Bank Stand Alone Financial Snap Shot

Net Interest income & Net Operating Margin

EGP million

300 349 392 584 465 501 1,028 1,690 2,544 3148 720 1,380 2,126 44% 49% 52% 65% 54% 51% 47% 42% 44%

0.1 0.2 0.3 0.4 0.5 0.6 0.7 500 1000 1500 2000 2500 3000 3500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019

NII NOM

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Our Bank Net Profit Breakdown

9 Month - 2019 Item Commercial Banking Activity Real Estate Activity Total Total Revenue 5,398,151 416,626 5,814,777 Total Expenses (3,734,515) (205,345) (3,939,860) Net Profit BeforeTaxes 1,663,636 211,281 1,874,917 Taxes (306,544) (47,538) (354,082) Net Profit After Taxes 1,356,819 163,743 1,520,562 Contribution % 89.23% 10.77% 100% Amounts in EGP Million Total Net Profit 1,520,562

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Our Bank Participation in the CBE Mortgage Finance Initiative

• The Central Bank of Egypt (CBE) Launched this initiative in May 2014
• The Total initiative amounts to EGP 20 Billion
• This initiative started by that Mortgage Finance is given to low income clients

and Medium income clients

• A new amendment took place mid 2016 including below low income clients

and above middle income clients

• Our Bank requested to participate in this initiative with EGP 2 Billion
• Actual dispensed amounts till end of Q3-2019 are EGP 5,340,381,0543

Million to 58,620 thousands clients by our bank

• The spread that our bank receives is from 3.5% to 4.5% on actual amounts

dispensed

• The below low income clients ceiling is EGP 150 Thousands for a unit with 5% interest
• The low income clients ceiling is EGP 350 Thousands for a unit with 7% interest
• The Medium income clients ceiling is EGP 500 Thousands for a unit with 8% interest
• The above middle income clients ceiling is EGP 950 Thousands for a unit with 10.5% interest

CBE Mortgage Finance Initiative

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Number of Units in Thousands

4,109 4861 2,528 212 180 257 12,147

2,341 6,670 11,303 11718 9,458 1179 1016 1438 45,253

143 308 230 153 278 16 1,128 28 35 146 13 222

2,484 6,978 15,670 16767 12,410 1420 1196 1695 58,620

10000 20000 30000 40000 50000 60000 70000 Total 2014 Total 2015 Total 2016 Total 2017 Total 2018 Q1-2019 Q2-2019 Q3-2019 Grand Total Low Income New 5% Low Income 7% Middle Income 8% Above Middle Income 10.5% Total

CBE Mortgage Finance Initiative

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Value EGP Million

288,403,026 413027307 214,645,308 17528061 15,618,200 21,858,517 971,080,419 131,656,818 495,863,370 919,678,189 1136504616 923,039,474 115601771 100,715,682 146,983,886 3,976,579,878 30,482,500 74,038,146 53,574,592 38794842 92,322,999 4700588 293,913,667 10,015,810 13880783 74,750,567 6696000 105,343,160

162,139,318 569,901,516 1,271,671,617 1602207548 1,304,758,348 144526420 116,333,882 168,842,403 5,340,381,053

1E+09 2E+09 3E+09 4E+09 5E+09 6E+09 Total 2014 Total 2015 Total 2016 Total 2017 Total 2018 Q1-2019 Q2-2019 Q3-2019 Grand Total Low Income New 5% Low Income 7% Middle Income 8% Above Middle Income 10.5% Total

Our Stock

51

Our Bank Fact Sheet

52

• Total Number of Issued Shares is 126,500,000 million with a book Value of

EGP 10

• Coupon number 38 with a value of EGP 5 per Share will be distributed on

Wednesday 17th April 2019 to shareholders until withheld or record date

• f Sunday 14th April 2019. The distribution will happen through Misr for

Central Clearing, Depository and Registry (M.C.D.R)

Incorporation: Egypt Sector: Banking & Financial Services Full Listing: The Egyptian Exchange (EGX) Issued Shares: 126,500,000 Free Float: 24.40% Listing Date: 13th September 1983 Market Cap: Almost EGP 6.9 Billion 52 Week High: 61.82 52 Week Low: 41.11

53

Stock Data: Bloomberg / Reuters: HDBK EY / HDBK.CA

Our Stock Activity

21.69 20.7 19.2 17.46 17 15.61 16.43 17.24 16.8 17.2 24.5 24.51 27 28 33.3 32 38.5 43 52.6 52.6 56 49.69 49.69 48.1 50.99 53.99 51.5 54.97 57 54.7 52.27 51.01 48.06 47 44.6 44.4 47.64 53.9 52.61 48.12 47 47.5 47 48 44.03 10 20 30 40 50 60 January-16 February-16 March-16 April-16 May-16 June-16 July-16 August-16 September-16 October-16 November-16 December-16 January-17 February-17 March-17 April-17 May-17 June-17 July-17 August-17 September-17 October-17 November-17 December-17 January-18 February-18 March-18 April-18 May-18 June-18 July-18 August-18 September-18 October-18 November-18 December-18 January-19 February-19 March-19 April-19 May-19 June-19 July-19 August-19 September-19

Dividend / Share

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• HDB has been distributing cash dividend on annual bases.
• HDB Full Year 2018 suggested cash dividend of EGP 5 to generate

a Yield of 9%

• HDB Pay Out Ratio for 2018 is 39%

Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 29 30 31 32 33 34 35 36 37 38 Dividend / Share 1.25 1 1.25 1.5 1 1.5 1.5 2 1.5 5 Payout Ratio Dividend / Share 5 Total Shares 126,500,000 Shareholders Dividend 632,500,000 Attributable Net Income 632,500,000 Net Profit 1,624,835,369 Pay Out Ratio 39%

Why HDB Stock?

55

• HDB performance shows that there is a room for loan growth

especially for corporates and under the CBE initiatives.

• 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 with a

high upside based on peer valuations.

• HDB combination of real estate projects & commercial banking

activities has proven a solid element.

• HDB investments in subsidiaries & sister companies that

complement the business model.

Analyst Coverage

• HDBK is covered by the following coverage houses:

56 Entity Contact Person E-mail EFG Hermes Elena Sanchez esanchez@efg-hermes.com EFG Hermes Ahmed El Shazly aelshazly@EFG-HERMES.com CI Capital Monsef Morsy Monsef.Morsy@cicapital.com.eg CI Capital Aya Abd Allah aya.abdellah@cicapital.com Beltone Ahmed Hesham ahhassan@beltonefinancial.com HC Nemat Choucri nemat.choucri@hc-si.com Prime Shihab Mohammed SMohammed@egy.primegroup.org Arqaam Capital Jaap Meijer jaap.meijer@arqaamcapital.com Arqaam Capital Ribal Hachem ribal.hachem@arqaamcapital.com Naeem Capital Allen Sandeep allen.sandeep@naeemholding.com Pharos Radwa El-Swaify Radwa.ElSwaify@pharosholding.com Pharos Dalia El Bonna Dalia.Bonna@pharosholding.com Rencap Nancy Fahmy NFahmy@rencap.com

Contact Us

57

Mohamed Hamzawy Chief Investment Officer Housing & Development Bank Direct Telephone: +2-02-33349037 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.com