Housing and Development Bank reports 13.7% profit growth in Q1 2021

HDB’s pre-tax profits amounted to $54.9mln

  
Customers are seen at the National Bank of Egypt (NBE), also known as the Al Ahli Bank in Cairo, Egypt March 10, 2016. Image used for illustrative purpose.

Customers are seen at the National Bank of Egypt (NBE), also known as the Al Ahli Bank in Cairo, Egypt March 10, 2016. Image used for illustrative purpose.

REUTERS/Amr Abdallah Dalsh

The Housing and Development Bank (HDB) has released its business results for the financial period ending in March 2021 to reveal a 13.7% rise in profits before taxes.

HDB’s pre-tax profits amounted to EGP 862m, whilst it reported net profit after taxes amounting to EGP 620m.

This continues the bank’s success in achieving good results for the first quarter (Q1) of 2021, despite the exceptional circumstances caused by the novel coronavirus (COVID-19) pandemic. 

These results came after the required precautionary reinforcements by the Central Bank of Egypt (CBE) for credit allocations to customers, in light of a challenging operating environment. These reinforcements are a continuation of the conservative policy pursued by the bank since the beginning of the pandemic.

Hassan Ghanem, Chairperson and Managing Director at HDB, said that the bank approved its independent financial statements for Q1 of 2021, and continued to achieve good results.

He pointed out that these results were due to the bank developing a clear strategy through which the bank seeks to be amongst the top commercial banks. The results also represent the implementation of the plan to develop banking services and products.

This comes as the previous period witnessed a remarkable development in all competitive banking services and products, to fit the needs of all segments of customers.

He added that the CBE policies aim to enhance financial inclusion, encourage dealing with banking institutions, keep pace with the digital transformation strategy, and spread the culture of electronic payment. 

The policies had a positive impact on the bank’s results, in addition to geographical expansion and increasing the number of branches and ATM networks. This aims to ensure the bank reaches out to customers in various regions of the country.

Ghanem stressed that the efficiency and professionalism of the bank’s executive management, employees, Board of Directors, and the continuous monitoring had a major role in achieving these good indicators. This was despite the current economic conditions on the budget and income statement of Q1 of 2021.

The results also revealed that the bank achieved a remarkable growth in total assets that supported the growth of operating revenues. Total assets increased by the end of the three months of 2021 to EGP 63.3bn, with a growth rate of 8.6%, compared to 2020.

Total loans and facilities increased to EGP 22bn, with a growth rate of 2.85%. Customer deposits increased to EGP 50bn, with a growth rate of 7.9% compared to 2020.

The net income from the return amounted to EGP 818m, compared to EGP 635m, an increase of EGP 183m, at a rate of 28.8%. It was represented by an increase in the return on loans and similar revenues by 8.6%, a decrease in the cost of deposits and similar costs by 6.3%, and a growth in dividends that amounted to EGP 124m, with an increase of 43%. 

This reflects the development of the profits of subsidiaries and sister companies, as well as the growth in the profits of the bank’s housing projects, which amounted to EGP 114m, an increase of 27% year-on-year (y-o-y).

The capital adequacy ratio according to Basel II requirements reached 20.59%, which reflects the strength of the bank’s financial position and gives it the necessary capabilities for future expansions.

The return on equity (ROE) was 7.9% during Q1 of 2021, and the return on assets (ROA) was 1% for the Q1 of 2021. Net loans to deposits amounted to 39% for Q1 of the year, compared to 41% y-o-y. 

It is noteworthy that the financial statements for the period ending in March 2021 reflect the current conditions, which had an impact on deposits. 

However, the directives and policies of the HDB’s senior management and the development of a plan to deal with exceptional circumstances and events have all strengthened the bank’s ability to deal with all the scenarios.

Moreover, the good results achieved by HDB allow it to accelerate the pace of investment in digital technology to support future growth. 

Furthermore, the profitability and strong capital base of the bank enables it to maintain strong levels of hedging to cover credit impairment provisions. This enables it to continue to support its customers during the recovery journey from the repercussions of the global pandemic.

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