The Housing and Development Bank (HDB) achieved pre-tax profits of EGP 757.782m in the first quarter (Q1) of 2020, down from EGP 781.648m in Q1 of 2019.
However, the bank’s net profit grew slightly to EGP 604.584m in Q1 of 2020, compared to EGP 603.017m in Q1 of 2019, an increase of EGP 1.567m.
The HDB business results also revealed that it recorded EGP 145.9m profits from its housing projects in Q1 of 2020, down from EGP 157.8m in Q1 of 2019, with a decline of 7.5%.
The bank’s investments in those projects declined to EGP 2.326bn in Q1 of 2020, compared to EGP 2.271bn in the same period last year.
The bank’s share of profits of associates amounted to EGP 57.8m in the first three months of the year, compared to EGP 59.5m in the corresponding period of last year.
HDB’s investments in those companies increased slightly to EGP 1.88bn in Q1 of 2020, compared to EGP 1.877bn in the comparison period.
The bank’s business results in Q1 of 2020 also showed a minor decrease in deposits, recording about EGP 39.695bn, compared to EGP 40.912bn in Q1 of 2019. At the same time, the bank’s loan portfolio stood at about EGP 20.511bn, compared to EGP 19.465bn in the same period of the previous year.
The bank said, in a statement sent to the Egyptian Exchange (EGX) last Thursday, that the first three months of 2020 saw the Central Bank of Egypt (CBE) announce a package of decisions and instructions. The CBE directives aimed to cushion the negative impact of the novel coronavirus (COVID-19) on the economy. The main decision among the CBE’s directives saw a 3% reduction in interest rates.
These decisions resulted in a decline of activity revenues. The costs of some instruments, such as time deposits, remained the same until their maturities were renewed, which affected the bank’s short-term profitability.
The bank added, “Despite these conditions, our main goal was to continue providing our comprehensive banking services to our customers, after applying preventive measures to protect workers and customers, and maintain the strength of the bank’s financial position. Additionally, HDB reinforced its credit allocations in Q1 of 2020, to ensure good coverage in case of any decline in credit quality in the coming fiscal periods until the end of 2020.”
The bank pointed out that the cash flow from operating activities plunged to EGP 964m in Q1 of 2020, compared to EGP 3.489bn in Q1 of 2019, a decrease of 127.6%.
HDB operating revenues recorded EGP 1.176bn in Q1 of 2020, up from EGP 1.123bn in the same period last year. At the same time, administrative expenses were hiked 22.6%, from EGP 341.6m to EGP 418.8m.
HDB’s paid-up capital stood at about EGP 1.265bn in Q1 of 2020, and the bank set aside EGP 380m to increase its capital.
According to the bank, the value of its reserves amounted to about EGP 3.767bn during Q1 of 2020, compared to EGP 2.341bn, a growth of 60.9%. The retained earnings recorded about EGP 1.978bn, compared to EGP 3.373bn, a decrease of 41.4%.
The total assets of the bank increased to EGP 54.322bn at the end of March 2020, compared to EGP 54.219bn in the same period last year, a growth of 0.2%.