The Housing and Development Bank (HDB), under the leadership of Hassan Ghanem, CEO and Managing Director, achieved a remarkable improvement in its financial indicators and doubled its performance and business results. This is one of the many exceptional successes that the bank has accomplished.
The bank’s net profits before allocations and income taxes grew by 133% during the fiscal year ending on 31 December 2023, reaching EGP 9.444bn, compared to EGP 4.051bn in the previous year, an increase of EGP 5.393bn.
The bank’s net profits after taxes also increased by 167.2%, amounting to EGP 6.031bn in the same period, compared to EGP 2.257bn in the previous year, an increase of EGP 3.774bn.
Strong Financial Position
Hassan Ghanem said that the bank’s business results for the fiscal year ending on 31 December 31 2023 demonstrated its strong financial position and its ability to achieve high growth rates, confirming its status as one of the largest and most comprehensive commercial banks in the Egyptian banking sector. He added that despite the current challenges, the bank was able to achieve exceptional growth in both revenues and net profits, reflecting its ability to adapt and cope with various changing situations with professionalism, dynamism, and flexibility.
Ghanem also said that the bank adopted a distinctive and unique business model that enabled it to maximize the benefit from all available opportunities while ensuring optimal management of resources. The bank also adhered to the highest standards of operational efficiency to achieve this exceptional success, as its net operating revenues increased by 95% to reach EGP 12.3bn during the fiscal year ending on 31 December 2023.
Moreover, the bank continued to benefit from its solid position in the banking sector, as its total assets reached EGP 125bn, with a growth rate of 21% during the fiscal year ending on 31 December 2023. The bank’s loan portfolio also grew through the retail and corporate sectors, with total loans reaching EGP 45.5bn, a growth rate of 19.2% during the fiscal year ending on 31 December 2023. This was driven by the growth of the corporate and institutional loan portfolio, which recorded EGP 20.569bn, a growth rate of 21%, and the retail banking loan portfolio, which recorded EGP 24.916bn, a growth rate of 17%.
Financing Portfolio Quality
The bank’s net return margin increased to 11.3% from 7% in 2022, and the percentage of non-performing loans decreased to 6.9% in the fiscal year 2023. This reflects the bank’s commitment and keenness to increase its financing volume while maintaining the quality standards of its financing portfolio. The coverage rate also increased to 114.1% from 108.8% in the previous year.
Ghanem also emphasized the effectiveness of the bank’s ambitious strategy, which puts customers and their needs at the top of its priorities. The bank was able to gain the trust of its customers in its banking products and services and encourage current and new customers to invest their savings. As a result, customer deposits increased by 13.2%, reaching EGP 101.3bn in the fiscal year 2023, compared to EGP 89.485bn in 2022. This was driven by an increase in retail deposits by up to 89%, which shows customer confidence in the products and services that the bank offers.
He pointed out that the total loans to deposits ratio increased to 44.9% in 2023, compared to 42.6% in the previous year. He added that the increase in the return on loans and similar income by 69.8% and the increase in the cost of deposits and similar costs by 28.5% contributed to the increase in net income of revenue, which reached EGP 10.453bn, compared to EGP 4.908bn in 2022, with a growth rate of 113%.
According to Ghanem, HDB was able to achieve distinguished returns thanks to the effective strategies it adopted in its various sectors. The growth in net profits in 2023 resulted in a growth in the return on average equity to 46.9% from 23.1% in 2022, while the return on average assets increased to 5.3% from 2.5% in 2022. The capital adequacy ratio was also recorded at 26.31%, compared to 22.94%, which exceeds the minimum set by CBE. This confirms the bank’s commitment to maximizing the value provided to shareholders and all related parties.
Ghanem explained that supporting SMEs is a top priority in the bank’s strategic plan, given its role in fostering development, creating job opportunities, and building an Egyptian industrial and production base to create a competitive industry. The bank was able to achieve the goals of CBE by directing 25% of its credit portfolio to SMEs.
Digital Transformation
Regarding digital transformation, Ghanem indicated that his bank has adopted an ambitious expansion strategy in this field. Ghanem explained that his bank is keen on launching many applications and electronic services, to enhance its competitive position, which represents a breakthrough in the field of digital services such as e-wallets and Internet and mobile banking. The bank also joined the real-time payments network via InstaPay.
He noted that the second phase was launched, along with Internet banking services, which provide a large number of services, such as transferring money inside and outside the bank, opening accounts online, linking new certificates, managing customer cards, and paying credit card debts.
Ghanem also revealed that the number of subscribers to the Internet and mobile banking applications increased by 72% in 2023, compared to the same period in 2022. The percentage of users of the Internet and mobile banking applications also increased by 108% in 2023, compared to 2022.
Sustainable Finance Principles
Ghanem highlighted the management’s pride and continuous efforts to establish sustainability standards in the bank’s various operational activities in 2023, which are evident in the bank’s strategy. He also said that the bank is participating in financing several strategic projects to support the state’s trends towards the transition to a green economy and sustainable development.
The bank allocated EGP 2.7bn to the principles of sustainable finance in terms of corporate finance, joint loans, and SMEs in 2023. Ghanem noted that creating sustainable value for all relevant parties is a strategic goal as well as a moral obligation for the bank.
Subsidiary and Sister Companies
Ghanem expressed his satisfaction with the positive business results achieved by the bank’s group of subsidiaries and sister companies. The net profit of the consolidated financial statements reached EGP 6.560bn, with a growth rate of 140.6% in 2023, compared to EGP 2.726bn in the previous year. This confirms the success of the bank in implementing its strategic plan to develop its group of companies and increase its investments.
Ghanem also explained that despite the challenges that the Egyptian economy is facing, the bank has shown flexibility and professionalism in dealing with crises. It was able to achieve remarkable sustainable growth. He expressed his optimism about the management’s ability to continue seizing attractive opportunities and tackling challenges.
He pointed out the utmost importance that the bank attaches to developing human capital as the basic pillar of success and the main factor behind these results. He added that HDB is keen on creating a positive and stimulating work environment for its employees, while constantly developing its human resources and investing in the human element through distinctive training opportunities in all fields to enhance and utilize their skills to achieve efficiency and productivity.
Ghanem stressed that achieving these honorable results and distinguished indicators on all budget items and income statements for 2023 reflects the efficiency and professionalism of the bank’s executive management, its employees, and its board of directors. He also said that the bank plans to continue implementing its ambitious plan with optimism and caution, based on several pillars, including putting customers as a top priority and managing risks wisely.
