Hassan Ghanem, vice chairperson and managing director of the Housing and Development Bank (HDB), said that the bank aims to be among the 10 largest commercial entities in the Egyptian market.
Ghanem explained, in his interview with Daily News Egypt, that the market share of the bank is currently about 0.93% in the total deposits and 1.13% of the total loans in the Egyptian banking sector.
According to Ghanem, the HDB aims to focus on financing the industry in its next plan, in implementation of the initiative launched by the Central Bank of Egypt (CBE) to support this sector, pointing out that plans, and strategies have been identified to put the bank on the right track in relation to the digital transformation.
The HDB will soon launch two services, Mobile Banking and Internet banking, to support the state’s transformation into a cashless society and activate the concept of financial inclusion. The bank is also in the process of launching two electronic branches in major commercial malls in Cairo as a first stage and they are scheduled to open this year.
First of all, what are the most important economic sectors that the bank will focus on financing in 2020?
Certainly, the focus will be on the industrial sector, in implementation of the initiative launched by the CBE to support this sector with EGP 100bn, in addition to the strategic sectors that contribute to economic development, such as renewable energy, petrochemicals, electricity, telecommunications, services, construction, and building.
What about SMEs?
The volume of financing directed to small and medium-sized enterprises (SMEs) in the bank, up to the end of August 2019, amounted to EGP 3bn, provided to about 1,100 customers, mostly in the industrial, commercial, and agricultural sectors.
How much is the amount of financing that the bank has pumped into the real estate mortgage initiative?
The bank’s real estate finance portfolio recorded EGP 6.7bn at the end of September 2019, compared to EGP 6.38bn at the end of 2018, an increase of EGP 361m. The volume of loans granted under the initiative of the Central Bank of Egypt (CBE) for real estate mortgage financing amounted to about EGP 5.3bn.
What about retail bank loans?
The size of the retail bank loan portfolio reaches more than EGP 2.2bn by the end of September 2019, with a growth rate of 29.5%, which is higher than the 25% targeted in the bank’s plan.
What is the bank’s plan to develop those banking services?
The HDB is keen to provide banking products that cover the needs of all customer segments, and are in line with the requirements of the banking market and competition principles. With this in mind, the bank has paid special attention to achieving diversification of its products that serve individuals and the household sector, by providing retail banking services and products, which include retail bank loan products and customer deposit products. At the level of loans, the bank offers a package of personal loan products to all segments of society to include the government and private sector. The bank has restructured the durable goods product and pensioner loans, as well as the business owners and self-employed loans, which the customer obtains in order to develop their business up to EGP 1m. The auto loan programmes have been prepared, to suit all customer segments, and new credit programmes will be prepared for credit cards.
The bank also paid great attention to deposit and savings certificates, which provides distinct and consistent regular returns, either monthly or quarterly, annually or semi-annually extending over three, five, or seven years. These certificates meet a remarkable demand from the bank’s customers.
Children and youth have had a large share of the bank’s interests, especially in the area of developing savings awareness for them, and working to spread the banking culture among them, as the bank presented them with a savings account for children and youth with prizes, which has a minimum balance of EGP 100. This allows for a large segment of children to enjoy the opening of bank accounts at a young age and increase their savings and banking awareness. The bank also provides upward savings account with similar benefits.
In the coming period, the bank is considering launching some new savings products, with the aim of encouraging savings in the short term, as it will launch a saving programme with a distinct return that allows obtaining large amounts at the end of the savings period, in exchange for the customer’s commitment to deposit fixed payments periodically and determine the period and the value of the installment according to their needs for cash, including school and university tuition expenses and seasonal holidays.
What about electronic services?
The bank is keen to keep pace with the technological development in the technology banking services business and to develop and facilitate communication with the bank’s customers, by creating and offering a comprehensive package of modern and safe electronic solutions.
In this regard, the bank recently launched the mobile payment service, Felosy Phone App, to help the bank’s customers pay the due installments and payments, including all bills at any time, from anywhere, to save time and effort.
The bank also begins an electronic collection initiative for real estate mortgage financing installments through various electronic payment methods starting 1 December 2019. The bank aims during the next stage, to continue to develop plans and strategies that put the bank on the right track of the digital transformation plan, where two services -Mobile Banking and Internet banking services- will be launched, to support the state’s trend to convert into a cashless community, activate the concept of financial inclusion, and attract new segments to deal with the banking services and keep pace with the latest developments in banking technology in the world.
What about the geographic expansion plan?
The bank’s network currently reaches 95 branches, in order to achieve an orientation towards expansion in the targeted areas. Proliferation areas are chosen according to the banking vision, target customers, and saving products.
In order to achieve the required geographical spread and according to the results of feasibility studies, due consideration was given to the selection of branches to be completed in Greater Cairo, and Upper and Lower Egypt, and will continue this trend in 2020/2021 plan.
The bank has recently signed an agreement with Orascom to build the bank’s administrative building at the New Administrative Capital. The bank lies on 9843 sqm and will cost EGP 636m. The new headquarters will be equipped with the latest technology, and it will include, alongside the bank’s departments, an electronic archive centre for all the bank’s documents. It will also include a branch of the bank and not only an administrative headquarters. The bank aims, at the present time, to cover all regions and governorates of the republic with its branch network, to cover all banking and housing services in all regions. The bank, however, does not intend to open branches abroad for now.
What about electronic branches?
The bank is in the process of launching two electronic branches in the major commercial malls in Cairo as a first stage, one of them in the 6th of October City, and the other in the 5th Settlement. Both are scheduled to open this year.
What about the bank’s efforts to help the country achieve financial inclusion?
The bank carried out many activities in the field of financial inclusion during 2019, including holding educational seminars on the concept of financial inclusion and its importance, in coordination with various groups of society, such as the Faculty of Commerce Damanhur University, and the Chinese University, and published definitions of financial inclusion on the bank’s official page on social media platforms.
The bank also held training programmes in coordination with the Egyptian Banking Institute to spread the culture of financial inclusion for bank employees, and designed educational programmes on financial inclusion for external parties for students and women.
In addition, the bank held 245 exhibitions throughout Egypt during the activities of financial inclusion in March, April, August, and October, to consolidate and enhance financial inclusion, and attract and motivate the largest number of groups of society to deal through the formal financial system.
How much is the bank’s market share currently?
The bank’s market share for deposits is 0.93% and for loans 1.13%.
What are the most prominent details of the bank’s business strategy during the coming period?
An ambitious strategic expansion plan has already been developed for the bank’s work from 2018 to 2022. In addition to strengthening the bank’s reputation, we are also working to consolidate a mental image of an integrated bank that offers banking and housing services, through a strategy aimed at geographical expansion during the next five years.
We aspire to be among the 10 largest commercial banks in the Egyptian market, while working to maintain high operating efficiency through the development of new banking products that are compatible with the geographical location of the branches, according to each geographical region, including Upper Egypt, Marsa Matrouh, and Sinai. We will also be introducing a new element bearing the bank’s logo, represented in cars to reach remote areas that lack banking representation, such as villages and hamlets, after obtaining the approval of the CBE.
We are also interested in being present on social media since 50% of the total dealers with banking services are youth. A new system was created for VIP customers, by providing services to them through large branches and allocating places for them at the hands of competent employees. The bank is also adopting a sustainable development policy as one of the most important principles to support the bank’s continuity during the next stage, by strongly entering in the field of mobile wallets and Internet Banking to serve individuals and institutions.
Furthermore, the bank is also taking interest in people with special needs and is seeking to reach this marginalised group, by preparing the new branches with accessible entrances.
The bank is further enhancing its social responsibility service through its contributions that serve the environment, social justice, and social integration, as the goal and interest of the bank is not limited to merely achieve economic returns for its activities and services, but rather taking into account the interests of customers, in order to obtain an appropriate economic return.
In the housing field, the bank seeks to continue to solve housing problems, by participating in the financing of social housing projects, providing appropriate facilities for housing customers, maximising the benefit of the initiative of the real estate mortgage financing initiative of the CBE and the financing of low and middle-income groups, in coordination with the Mortgage Finance Fund, to include housing units in various social housing projects, in Sakan Misr, Dar Misr, and the 1m housing units project.