Housing & Development Bank Investor Presentation Q2- 2015 Results August 2015

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 or 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 offer 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 2

Agenda • Historical overview • Business review • Financial review Stand Alone • • Financial review Consolidated • Stock • CSR • 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 35 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 Misr Insurance Co. 8% 22%

7%

Misr Life Insurance Co. New Urban Communities Authority

15%

30%

Housing Fincance Fund Egyptian Endowment Authouriy

11%

7%

Regional HNWI Free Float

7

Our Transformation •

•

In 2003, Egyptian banking law 88 prohibited the existence of specialized banks in Egypt, and HDB was restructured to become a conventional 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. Management implemented a five-year plan to turnaround the bank in 2009, by heavily investing in new IT systems, renovating its branch network and increasing its marketing efforts. HDB currently has a branch network of 62 branches.

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. New Bank products and Real Estate Projects continue to be the key at increasing our growing client base & performance.

8

Our Journey 1979

1993

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

Continued growth of real estate investments 1993: raised paid-in capital to EGP 54mn

Initial capital of EGP 18mn Registered on EGX in 1983

2000: raised paid-in capital to EGP 122.3mn through existing shareholders

2003

2003: Introduction of new banking law Bank restructured, increased focus on growth of core banking business Further expansion in real estate development to be carried out through subsidiaries

2006

In 2006 provided an integrated banking system to cater to the retail sector Raised: paidin capital increased to EGP 500mn through existing shareholders In 2009 investment in Hyde Park Development

2010 Paid-in capital increased to EGP 1.2bn through a private placement and portion through HDB`s ESOP First time nonEgyptians allowed ownership of HDB shares; their ownership reached 20% Vitalized the corporate identity campaign

2013 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

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

9

Board of Directors Chairman & Managing Director (Executive)

Fathy El Sebai

Vice Chairman & MD (Executive)

MD For Engineering & Investments Affairs (Executive)

Essam Abou Hamed

Mohamed El Alfi

New Urban Communities Organization

Egyptian Awkaf Organization

Misr Insurance Company

Housing Financing Fund

Misr For Life Insurance

Independent Board Members

Experienced Members

4 Members

2 Members

1 Member

1 Member

1 Member

2 Member

1 Members

10

Corporate Governance •

Board composition: 3 Executives and 12 Non-Executives

•

5 Board Committees meeting on a regular basis, namely:  Audit Committee  Risk Committee  Remuneration Committee  Governance & Nomination Committee  Executive Committee  Investment 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 clients, employees and third parties dealings

11

Our Organization Chart Audit & Risk Committees Audit Division

Chairman

Compliance Division Risk Division

Support Functions*

Vice Chairman & MD

MD For Engineering & Investments

Credit

Finance

Marketing

IT

Treasury

Legal

Financial Operations

Human Resources

Consultancy

Branches

Strategy & Planning

Asset Management

Investment Investment

Real Estate & Engineering Real Estate Development

Administration

12

Business review

13

Our Business Model Housing & Development Bank

Banking Business

Investment Business

Real Estate Business

Includes some subsidiaries & sister companies

HDB has direct and indirect ownership positions in 14 subsidiaries and sister companies; total EGP 974 million as at end of Q2-2015 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 14

Our HDBK Group Structure • Blue Line elaborate Bank Direct Investment • Red Line elaborate Holding Company Investment

Housing & Development Bank Group

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

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

38%

El-Tameer Co. For Mortgage Finance 24.80% Ownership by HDBK

EL-Tameer Co. For Housing & Utilities 35% Ownership by HDBK

2% Zayed City Edge 38% Ownership by HDBK

51% 51%

El-Tameer Co. For Asset Management 15.70% Ownership by HDBK

39% Ownership by HDBK

60%

76% 60%

El-Tameer Co. For Real Estate Investment Funds 24% Ownership by HDBK HD Company For Trading Securities 20% Ownership by HDBK Obelisk for investment fund management 30% Ownership by HDBK

El-Tameer Co. For Security & care services

Tameer Co. for Real Estate Investment Development 37% Ownership by HDBK El-Tameer Co. For Financial & Real Estate Marketing 39% Ownership by HDBK

31% 21% 18.2%

51%

El-Tameer Co. For Technological services 40% Ownership by HDBK

Hyde Park Co. for Real Estate Development 36.90% Ownership by HDBK

15

Our Equity Investments Serial

1

Company Name

* Holding Co . For Investment & Development

Participation %

Value in EGP

92.00%

365,000,000

Holding Company For Investment & Value in EGP Development Participation %

Subsidiries

Sister Companies

2

Housing & Development Co. For Real Estate Investment

60.00%

180,000,000

3 4

EL-Tameer Co. For Housing & Utilities El-Tameer Co. For Mortgage Finance

35.00% 24.80%

5,250,000 93,200,000

5

El-Tameer Co. For Asset Management

15.70%

6 7 8 9 10 11

El-Tameer Co. For Security & care services El-Tameer Co. For Real Estate Investment Funds El-Tameer Co. For Financial & Real Estate Marketing El-Tameer Co. For Technological services Tameer Co. for Real Estate investment Development HD Co . For trading securities

39.00% 24.00% 39.00% 40.00% 37.00% 20.00%

12

Obelisk for investment fund management

30.00%

10,000

13

Zayed City Edge

38.00%

102,600,000

Participation %

Value in EGP

36.90%

198,622,250

Company Name

Equity

1

Hyde Park Real Estate Co. For Development Total

38.00%

114,000,000

942,000

51.00%

3,060,000

1,521,000 2,400,000 2,178,158 4,000,000 18,500,000 10,000

51.00% 76.00% 60.00% 51.00% 60.60% 31.00%

1,989,000 7,590,000 6,000,000 5,100,000 121,345,300 4,650,000

21.00%

525,021

2% 10,800 Holding Company For Investment & Value in EGP Development Participation % 18.20%

81,900,000

974,233,408

16

HDB Financials • 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. 17

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. Ready to Sell Units across Projects 100% Owned by HDBK 30/6/2015 Project Name October - El Montazah - Phase 1 New Cairo - Acacia - Phase 1 Ganat El Obour 6 October Project - Phae 2 and 3 El Arish City Qena Governerate New Cairo - Acacia - Phase 2&3 Administrative Building Plot 28 Diffierient Sites

Description

Segment

Residential Residential Residential & Commercial Residential Residential Residential Residential Office Residential & Commercial

Middle Upper Middle Economic Middle Economic Economic Upper Middle Upper Middle

* All sales will be done at current market prices

Total Number of Available Units Sold Units Units for Sale 240 220 1620 660 184 162 593 Leasing 63 3742

232 218 1490 99 4 140 25

1 2209

8 2 130 561 180 22 568 Leasing 62 1533

18

Potential Upside of Revenue & Profit Land Bank Owned by HDB 30 June 2015 ** Land Area Sq. m 5,000 4,815

Cost in EGP

Item Ganat El Obour – El Obour

198,362 1,011,150 29,669,123 31,778,193 5,822,504 17,257,185 120,757,906 206,494,423

6 October Project El Montazah - Phase 2 and 3 New Cairo - Acacia - Phase 2&3 New Cairo - Plot 31 Hurgada - Red Sea Land El Koroum Street Land Number 24 - Office Building Helwan Land Total

6,800 108,072 6,150 750

105,000 236,587

Work In Progress As of 30 June 2015 ** Project Name

Number of Units

Type of Units

Cost in EGP

Qenna Governorate

90

Apartments

9,361,901

New Cairo -5th Settlement - El Safa

95

Villas

113,166,181

Hurgada Governerate

174

14,237,424

Different Sites

304

Challet Mix of products including Shops

Total

663

** All sales will be done at current market prices

11,783,078 148,548,584 19

Years in Review Item Revenue breakdown

Break Down

2009

2013

2014

Banking

EGP Million

930

1,251

1,322

Real Estate

EGP Million

142

466

381

Deposits

EGP Million

Loans

EGP Million

6,800

6,400

7,100

Land

meters squared

837,459

3,811,600**

472,000

BUA

meters squared

328,447

2,900,000

662,947

Investment Activity

EGP Million

399

912

912

Human Capital Spending 2503 employees

EGP Million

1.7

4

2.03

Share Holders Equity

Standalone

EGP Million

1,070

2,100

2,200

Consolidated

EGP Million

1,600

3,600

2,800

Standalone

EGP Million

17,800

24,900

23,030

Real Estate Activity

Total Assets

* Consolidated including minority interest ** Includes 3.3 million sqm in Hyde Park *** Subsidized Loan by CBE

6,500+1200*** 8,800+1000***

15,145+1000***

20

What We Aim For Our Vision To be within the five top ranked banks in Egypt, with direct involvement in the real estate business to both boost our financial performance and continue profitably to asset-back our banking business Our Mission Through the continuous upgrade of our human capital we strive to excel in providing our clients, both in banking and real estate, with an outstanding level of services and innovative products 21

Our Strategy Capitalize On Our Housing Reputation To Attract New Clients Into Our Banking Business Accelerate Overall Banking Growth Capitalize On Our Housing Reputation To Attract New Clients Into Our Banking Business

Provide Integrated Real Estate Services

HDB Strategy

Capitalize on our reputation and experience in providing full range of housing and property development services to attract new retail and corporate costumers to our banking services; marketing efforts Increasing Customer Base Enhance corporate lending, increase retail financing whether through retail loans, mortgage finance or credit card business. Improve client access through increased street visibility, introducing a wider variety of short, medium and long term saving schemes Provide Integrated Real Estate Services Construction and sale of housing units through affiliated companies

Continued Customer Satisfaction

Increase Customer Base

Provide real estate financing Supervision of implementation of housing projects Real estate business appraisal

Maximize Profitability

Continued Customer Satisfaction

Introducing new products to capture targeted growth in both banking and real estate business 22

Our Products Range Retail Products

Corporate Products

Real Estate Products

Current accounts

Credit facilities

Real estate financing

Saving products

Trade finance

Real estate investment & development

Loan products

Limited investment banking services

Debit/Credit /Prepaid Cards

e-payments

Life insurance services

Financing customs & taxes

Safe deposit boxes

Specialized services to SMEs

Payroll services

Treasury & cash management

Vodafone cash

Construction of housing units* Supervision of implementation of the projects owned by HDB & others Business appraisal and feasibility studies* Real Estate consulting and engineering services*

Housing installment and epayments

* Through HDB’s subsidiaries & affiliates

23

Our Way Forward New core banking IT system allows handling of increased more complex products and a greater client base

Increasing planned branch network set to capture a greater portion of retail business to reach 100 branches by end of 2017

Hidden equity; around 3.25 million sqm of undeveloped land carried at an average cost of EGP 1,317/sqm

Low loan/deposit ratio coupled with the recent capital increase allowing for increased and varied lending opportunities

Trading at Price to Book of around 1 & Price to earnings of around 7

HIGH GROWTH PROSPECTS OVER THE NEXT FIVE YEARS

24

Financial Review Stand Alone

25

Our Bank Financial Snap Shot Standalone Financial Position*** 30 June 2015(EGP million) Total Loans Total Deposits Total Revenue

7,575 10,682 1,189

Net Operating Margin

51%

Net Profit After Tax

322

NPL/Total Loans

5.4%

Cost/ Income Ratio

62%

Tier 1 capital – Basel I

22.84%

Tier 1 capital – Basel II

17.91%

26

Our Bank Financial Snap Shot Paid In Capital

EGP million

1400 1200

1,150

1,150

1,150

1,150

2010

2011

2012

2013

1,265

1,265

2014

Q1-2015

1000 800 670 600 400 200 0 2009

• • • • • •

Total Number of Issued Shares is 126 million with a book Value of EGP 10 HDB is listed & traded on the Egyptian Stock Exchange (EGX) Last Div. / Ex. Date EGP1.50 on 22 Apr 2015 Est. Free Float 21.4% Bonus share issue announced April 2014 at a rate of 0.1% of paid up capital Bonus Share Distributed on 12th January 2015 27

Our Bank Visibility 180 156

152

160

156

140 120

118

114

120

98

100 80 60

59

58

55

62

61

59

40

62

64

64

65

65

68

68

68

2009

2010

2011

2012

2013

2014

Q1-2015

20 0

Branches

P.O.S

2009 Footprint

55 Branches, 98 ATMs, 64 POS

A.T.M

Q2- 2015 62 Branches, 152 ATMs, 68 POS

28

Our Bank Stand Alone Financial Snap Shot Capital Adequacy Ratio

30%

24.2%

25%

24.2%

25.5%

25.2%

23.7%

22.84%

30%

29.1%

25%

20% 20.6% 15%

Return on Assets & Equity

35%

19.8%

13.7%

20%

18.6%

Capital increase: EGP500mn to EGP1.2bn 11.2% 9.4%

17.91% 15%

10%

10%

5%

5%

0%

0% 2009

2010

2011

2012

Tier 1 Capital to Basel I

2013

2014

70%

65.1%

62.9%

65%

75.3%

50% 45%

40% 34.9%

37.1%

38.7%

1,200

2013

400

1,146

1,265

1,012

Q2 -2015

Return on assts

1,770

1,546

1,537

1,244

1,332 1,202

1,195

1,062

882 743 264 244

200

35%

2014

Net Profit

1,242

1.2%

800 600

42.0%

1.4%

1,800

1,000 51.0%

40.0%

EGP million 2,000

1,400

52.9% 47.1%

55%

2012

1,600

60.0%

60%

2011

1.7%

1.7%

Return on equity

62.0%

61.3%

11.8%

1.3%

2010

Tier 1 Capital to Basel II

Unusually high TB rates & auction land sales distort ratios

75%

1.6%

2009

Q2-2015

Net Operating Margins & Cost to Income Ratios 80%

2.3%

16.2%

15.8% 13.2%

230 203

203 176

302 206

335 247

438

451 322

306

0

30% 2009

2010

2011

Net operating margins

2012

2013

2014

Cost / Income ratio

Q2 -2015

2009

2010 2011 Total Revenue Net profit before tax

2012

2013 2014 Total expenses

Q2 -2015

Net profit After tax

29

Our Bank Stand Alone Financial Snap Shot EGP million

Development of Assets

30,000 26,327

414 1,058

25,000 21,250

360 1,056

20,000 14,592

14,037

15,000

374 390 1,822

278 904

447 630

5,792

366 944

2,095

235 1,004 2,570

6,514

2,195

2,282

6,646 5,000

4,322 6,949

13,004

12,657 10,619

10,000

5,035

6,563

6,023 5,760

12,710 8,835

2,149

2,622

2009

2010

3,981

3,584

2011

2012

4,607

0

Cash,Mkt.Securities&T-Bills

Net Loans

Investments

2013 Real Estate Activity

2014 Fixed Assets

Q2 - 2015 Other

30

Our Bank Stand Alone Financial Snap Shot Total Liabilities & Shareholder’s Equity EGP million

30,000 26,327

25,000 21,250

9674 20,000 6903 14,037

15,000

12,657 10617

10,000

426 414 670 745 1,796

503 870 1,150 957 1,671

13,004

1,891 904 1,150 980 1,553

442 938 1,150 886 1,455

5,000 6,568

7,505

7,558

8,134

2009

2010

2011

2012

14,592

1,400 963 1,150 896 1,310

982 1265 1192 1282

8,869

9626

2013

2014

1039 1265 1969 1518

10862

0 Q2-2015

Customer Deposits

Long Term Loans (incl.subsidised)

Other

Paid In Capital

Reserves & Retained earnings

Down Payments - Real Estate

31

Our Bank Stand Alone Financial Snap Shot Loans To Deposits Raito

68%

12000 EGP Million

66.9%

10,682

66%

9,626

10000

8,869

64%

8,134 7,558

7,505 62%

6,568

8000

61.7%

62.1%

61.3%

Total Loans excluding subsidized loans

59.5%

60%

60.2%

6000

58.2% 5,978

58%

Total Deposits

6,587

4000 Loans to Deposits Ratio

56% 4,939

4,518

4,636

4,734

5,278 2000

54% 52%

0 2009

EGP million 8,000 7,000 6,000

6,189 26

2010

2011

6,988

7,100

16 1,523

2012

2013

2014

Development of Loans 16 1,534

6,362 17 1,525

1,318

6,588

7,100

Q2-2015

17

7,575

16 17

1,691

1,965

1,617

5,000 4,000

2,202

2,290

1,746

2,118

2,123

2,613

Credit cards

Mortgage

Retail

Corporate

2,842

3,000 2,000 3,099

3,248

3,260

2009

2010

2011

1,000

2,702

2,831

2,780

2,750

2012

2013

2014

Q2-2015

0

• •

Steady growth in both corporate and retail loans With loan to deposit ratio still remaining low, there is room for the planned growth in the loan portfolio

32

Our Bank Stand Alone Financial Snap Shot NPL’s to Total Loans 8% 7%

,6362

7,100

6,989

,6588

7,100

EGP million 7,575 8000

6.8%

6,189

7000

6%

6000 5.9%

5% 4%

5.4%

3.5%

3.9%

5000

5.4%

3.9%

3%

3000

2% 1%

239

433

278

245

391

385

386

0%

4.8%

4% 3% 2%

6.2% 6.3% 5.8% 5.7% 11.9% 6.1% 10.4% 10.1% 10.5%

5.9% 5.3%

0% 2010 Loans

• •

2011

2012

Deposits

2013

2014

103.9%

86.8%

300 112.1% 113.5%

111.2%

150

1000

50

268 239

278 245

435 391

433 376

200

100

404 384

403 388

309 278

0

2009 2010 2011 Non-Performing Loans

14%

1% 2009

105.2%

2012

2013 2014 Q2-2015 Non-Performing Loans Coverage

Coverage %

5.1% 4.7% 4.9% 10.6% 10.4% 11.0%

4.3% 4.3%

350

2014 Q2-2015 Non-Performing Loans

Net Interest Margin 5.6%

6% 5%

2013

111.3%

400

2000

0 2009 2010 2011 2012 Total Loans Non-Performing to Total Loans

450

250 4000

Non-Performing Loans

EGP million

500

Q2-2015

Net Interest Margins

12%

EGP million 700

10%

600

8%

500

6%

400

4%

300

2%

200

0%

100

Net Interest Income 584 464.2

300

349

501 394

392

0 2009

2010

2011

2012

2013

2014

Q2-2015

Quality of loan portfolio improving with NPLs fully covered HDB’s planned retail strategy is set to increase the net interest margins over the next five years 33

Our Bank Standalone Financials Bank Standalone Financials 1/1/2014 till 30/6/2014 On 1/1/2015 till 30/6/2015 50%

EGP million 900.00

46.8% 44.8%

45%

783

41.9%

40%

800.00

37.9% 36.1%

700.00

35% 600.00

550 29.8% 30%

451

31.3%

25%

500.00

397 400.00

20%

322 300.00

15%

240

219

187

200.00

10% 99

95 5%

59

100.00

68 1.63

2.55

0%

0.00 Interest From Loans Net interest income & Similar Income

Net fees and commisions income

1/1/2015 - 30/6/2015

Housing projects' profits

Net profit for the year before taxes

1/1/2014 - 30/6/2014

Net profit for the year

Earnings Per Share

Y-o-Y 34

Our Bank Standalone Financials Bank Standalone Financials 1/4/2015 till 30/6/2015 On 1/4/2014 till 30/6/2014 50%

EGP million 450

44.8%

427

42.8%

41.2%

40.3% 400

40% 33.0%

350

30% 286

300

20% 208

250

221

10%

200 0%

144 122

150

119

-10%

86 51

-20%

30

47

100

38

50

-23.7% -30%

0 Interest From Loans Net interest income & Similar Income

Net fees and commisions income

1/4/2015 - 30/6/2015

Housing projects' profits

Net profit for the year before taxes

1/4/2014 - 30/6/2014

Net profit for the year

Y-o-Y 35

Our Bank Net Profit Breakdown 1/1/2015 till 30/6/2015 Item Total Revenue

Commercial Banking Activity 979,136

Real Estate Activity 210,801

Total Expenses

670,763

67,305

Net Profit Before Taxes

308,373

143,496

Taxes

87,937

41,885

Net Profit After Taxes

220,437

101,612

Amounts in EGP Million

Total Net Profit

322,048

1,200,000 1,000,000

979,136

800,000

670,763

600,000 400,000

308,373 220,437

210,801 143,496

200,000 67,305

87,937

41,885

101,612

0 Total Revenue

Total Expenses

Net Profit Before Taxes

Commercial Banking Activity

Taxes

Net Profit After Taxes

Real Estate Activity

36

Our Bank Net Profit Breakdown Full Year 2014 Vs. H1-2015 Full Year 2014

1/1/2015 Till 30/6/2015

Item

Commercial Banking Activity

Real Estate Activity

Item

Commercial Banking Activity

Real Estate Activity

Total Revenue

1,486,837

268,227

Total Revenue

979,136

210,801

Total Expenses

1,185,995

130,565

Total Expenses

670,763

67,305

Net Profit Before Taxes

300,842

137,662

Net Profit Before Taxes

308,373

143,496

Taxes

90,801

41,550

Taxes

87,937

41,885

Net Profit After Taxes

210,040

96,112

Net Profit After Taxes

220,437

101,612

Amounts in EGP Million

Total Net Profit

306,152

Amounts in EGP Million

Total Net Profit

322,048

37

Our Bank Participation in the CBE Mortgage Finance Initiative •

The Central Bank of Egypt (CBE) Launched this initiative in June 2014

•

This initiative states that Mortgage Finance is given to Medium and low income clients

•

The Medium income clients ceiling is EGP 500 Thousands for a unit

•

The low income clients ceiling is EGP 350 Thousands for a unit

•

The Total initiative amounts to EGP 10 Billion

•

Our Bank requested to participate in this initiative with EGP 2 Billion

•

The actual activity started in November 2014

•

Actual dispensed amounts till 30th June 2015 is EGP 400 Million to almost 5000 thousands clients

•

The spread that our bank receives is from 3.5% to 4.5% on actual amounts dispensed 38

Financial Review Consolidated

39

Our Bank Consolidated Financials EGP billion 30

Development of Assets 24.9

25

22.3

20.3

17.8

20

1.3

1.2

0.9 15

8.8

8.2

22.1 2.0

9.2

10

1.4

5 0

1.8

6.5

23.03

1.12 2.00

1.15 1.76

5.04

4.30

9.2

7.5 1.4

2.9

28.25

6.94

6.54

28.25 24.9

25

22.3

22.1

2.0 1.2

2.3 1.2

7.0

5.8

1.9 2.4

2.3 2.3

2.2 2.5

6.5

7.5

7.5

8.1

8.8

2009

2010

2011

2012

2013

20.3 20

17.8

15

1.5 0.7

10

1.4 5.8

5.6

6.3

2.3

2.7

4.2

3.8

5.0

2009

2010

2011

2012

2013

12.90

2.1 1.8

5

9.12

Other Real Estate Activity Net loans

Development of Liabilities & Net worth**

5.2 1.9

5.6

EGP billion 30

2014

2,500

1,472

1,500

142

1,000

387 69

71 87

187 13 80

500

874

934

1,004

1,277 185

1,284

1,960 1,871

469 59 93

466 135 92

1,239

1,178

381 243

1,201 165 141

1,204 794

0 2009 2010 2011 Real Estate Activity Revenues Fee And Commission Income

2012

1.40 1.518

2.2 2.7

15.086

Networth. Excl. Capital Down Payments - Real Estate Long term loans *

Development of Revenue 1,860

10.634

10.630

2014

Q1-2015

Q2-2015

Fixed Assets Securiities Cash,Mkt.Securities&T-Bills

2,000

5.4

7.6

2.700 1.265 2.400 1.300 1.282

2.800 1.265

0

EGP billion EGP billion

1.9 1.2

2.4 1.2

23.03

2013 2014 Q2-2015 Financial Investments Revenues Interest And Similar Income

1,800 1,600 1,400 1,200 1,000 800 600 400 200 0

Paid In Capital Liabilities Customer deposits

Development of Expenses1,573 1,473

1,128

1,074

895

262

311

203 347

368

154 277 40

335

105 187 27

182 224 36

135

163

193

559

597

627

661

698

685

2009 2010 2011 Others Income Taxes Expense Fee And Commission Expense

908 144 211 149

384 2012 2013 2014 Q2-2015 Employee Costs Financial Investments Expenses Interest And Similar Expense

*Assets have decreased because Hyde Park assets has been changed from a Subsidiary to a sister company ** Includes subsidized loans *Overall total expenses came down as cost cutting initiatives and increased efficiency procedures came into play

40

Our Bank Consolidated Financials EGP million

Operating Profit Margins 60%

51.6% 46.7%

50%

40% 36.0%

1400

700

1200

600

1000

500

36.1%

800

400

600

300

400

200

Net Profit 603

43.0%

40.7%

37.5%

EGP million

591

568

522 476

30% 1239 20% 10%

377

337

518

480

410

0%

200 0

2009

2010

2011

Total Operating Revenue 40%

2012

2013

2014

Net Operating Income

10% 5%

1.8%

2010

2012

Return On Assets

2010

2011

2012

2013

2014

Q2-2015

Net Profit After Tax

Equity Multiplier 14.02 11.47

13.7%

15.1%

1.7%

1.6%

10.67 9.10

10 12.7%

8 6

7.1% 5.2% 1.0% 0.7% 2011

326

156

Net Profit Before Tax

16

1.20%

4

5.66

5.83

2012

2013

2.49

2

0% 2009

374

0

12

12.9% 3.2%

428

14

20% 15%

203

Operating Margins

Capital increase: EGP500mn to EGP1.2bn

25%

100

2009

35% 30%

387

Q2-2015

Profitability Evaluation

35.8%

238 196

794 578

315

577

1004

934

874

1204

1178

2013

2014

Return On Equity

Q2-2015

0 2009

2010

2011

2014

Q2-2015

41

Our Stock

42

Our Bank Fact Sheet • • • • •

Total Number of Issued Shares is 125,600,000 million with a book Value of EGP 10 Last Div. / Ex. Date EGP1.00 on 14 Apr 2014 Bonus share issue announced April 2014 at a rate of 0.1% of paid up capital Bonus Share Distribution Date on 12th January 2015 Last Cash Dividend distribution date was 22nd April 2015 Incorporation:

Egypt

Sector:

Banking & Financial Services

Full Listing:

The Egyptian Exchange (EGX)

Issued Shares:

125,600,000

Free Float:

21.40%

Listing Date:

13th September 1983

Market Cap:

Above EGP 3 Billion

52 Week High:

31.47

52 Week Low:

18.0 43

Our Stock Activity 30

28.6 27.47 27.1 27.02 26.6 26.5 25.89

28 26

24.28

24

23

20.99 20.68 20.16 19.88 19 19.41 18.98 18.24

22 20 18 16

24 23

15.7515.515.78 16

16.22

14.69 14.31 14.2814.114.51 13.95

14 12 10

Stock Data: Bloomberg / Reuters: HDBK EY / HDBK.CA 44

Dividend / Share • • • •

HDB has been distributing cash dividend on annual bases. HDB in 2013 distributed cash dividend & Bonus share with 1:10 ratio HDB Full Year 2014 cash dividend generate a Yield of 6% HDB Coupon 34 was distributed on Wednesday 22nd April 2015 for shareholders record on Sunday 19th April 2015. • HDB Pay Out Ratio for 2014 is 62% Year

2009

2010

2011

2012

2013

2014

Dividend / Share

1.25

1

1.25

1.5

1

1.5

Payout Ratio Dividend / Share Total Shares Attributable Net Income

1.5 126,500,000 189,750,000

Attributable Net Income Net Profit Pay Out Ratio

189,750,000 306,152,601 62% 45

Why HDB Stock? • HDB performance shows that there is a room for loan growth. • 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. 46

Analyst Coverage • HDBK is covered by the following coverage houses: Entity

Contact Person

E-mail

EFG Hermes

Elena Sanchez

[email protected]

CI Capital

Monsef Morsy

Beltone

Nancy Fahmy

[email protected] [email protected]

Beltone

Ahmed El Shazly

[email protected]

HC

Monette Doss

[email protected]

Prime

Heba Monir

[email protected]

Arqaam Capital

Shadi Salman

[email protected]

47

Our Bank CSR Non-Governmental Organization & Non Profit Organizations: Educational, Family and Society Development, Special Needs, Blind, Local Society Development, Patient Coverage, Mothers & Infants Coverage and Social Help Universities & Colleges: Sponsoring Student Competition, workshops, Research & Development Projects & Scholarship Hiring Schools Activities: Donation of Saving Passbooks to encourage students on saving, and a Housing Saving Passbook to help them secure a residential unit when they reach 21 Years old. Plus, Scholarships granted to super students until they graduate from universities too. Talented: Provide financial & Psychological support to Super Students God Gifted Students: Search for God Gifted Students across all ages & educational levels regardless it is vocational or academic and provide support 48

Our Bank CSR Governorates Activities: Charity Projects & environmental projects that governorates & Cities need to upgrade quality of people & it is done via Bank branches. (Example: street enhancements) Hospitals Activities: Sponsorship of Hospital units that look after children, Cancer, Liver, Kidney patients Institutions & Organizations: Entrepreneurship , Provide upgrade, maintain & development of schools, Cardio Research & Development, Breast Cancer Awareness, Social Research & Development, Misr El Khier Foundation and Sonaa El Hayat Orphanages: Provide support to Orphans & their families to complete education until university graduate Families: Provide & distribute food supplies in rural and Slump areas based on needs and requests Floods & Weather Rehab & Rescue: Build housing units at El Arish and Aswan to shelter citizens who suffered or lost their homes as a result of Floods or weather conditions 49

Our Bank CSR Youth Graduate Sponsorships: Plan training, secure jobs and conduct exhibitions for them Small & Medium Size Contractors Sponsorship: Prepare special training sessions with cooperation of the Social Fund for Development (SFD) and granting them SME’s projects to manage & execute and monitoring them to help them technical & Psychology & fund them when required Small Manufactures & Technicians Support: Buy & provide them the required materials to produce final products that the bank buy & use in its projects Support & Conduct Art Exhibitions across several domains: Conduct Exhibitions, workshops and Seminars to Artists and welcoming celebrities in across Art & Cultural aspects and domains to support Artists and even the bank buy some pieces as a support to them to enhance spiritual & mental creativity Young Creative Sponsorship : Prepare exhibitions that is specialized to them and providing support & financial aid to encourage them and push them to excel & continue in creativity 50

Contact Us Mohamed Hamzawy Strategic Planning & Investment Officer Housing & Development Bank Telephone : +2-02- 33357170 Direct Telephone: +2-02-33357327 Fax: +2-02-37627053 Mobile: +2-010-25000551 H/Q 26 El Koroum Street – Mohandessian - Giza, Cairo –Egypt www.hdb-egy.com E-mail: [email protected]

Samir Soliman Chief Finance Officer & Assistant CEO Housing & Development Bank Telephone : +2-02- 33357170 Direct Telephone: +2-02-33357327 Fax: +2-02-37627053 Mobile: +2-012-23467388 H/Q 26 El Batal Ahmed Abd Al Aziz Street – Mohandessian - Giza, Cairo –Egypt www.hdb-egy.com E-mail: [email protected]

51