housing and deyelopment bank consolidated … · g€neral and administ alive exp€nses other...
TRANSCRIPT
HOUSING AND DEYELOPMENT BANKCONSOLIDATED FINANCIAL STATEMENTS
FORTIIE YEARENDED3l DECEMBER2Ol9
Translated fiorn the C)fficial Repon issued in Arabic
BT $ ahid Abdel Ghafrar and &Co E\' - Allied for Accounting & -{uditing Accoutrtabilitl State Authorifl
INDEPEI\'DENT AT,JDTTORS' REPORT
To The Shareholders ofHousing and Developmenf Bank - Egrpt (S.A.E)
Report on the Consolidated Financial Statements
We have audited the accompanf ing consolidated financial statements ofHousing and Developmeat Bank -Eg)'pt (S.A.E). represented in the consolidated financial position as at i1 December 3019. and the relatedconsolidated statements of income. changes in shareholders' equit_v and cash flows for the year then ended.and a summary ofsignificant accounting policies and other explanatory notes.
Management's Responsibilitv for the Financial Statements
These consolidated financial statements are tie responsibilit-v of Bank's managemenl. Management isresponsible for the preparation and fair presentation of these financial statements in accordance with theinstructions of preparation and presentalion of financial statements for Egrytian banks issued by CentralBanli of Egypt on 16 December 2008 as amended by the regulations. issued on 26 February 2019 and inlight of the prevailing Egrprian laws and regulations. Management responsibility includes designing.implementing and maintaining internal control relevant to the preparation and fair presentation offinancialstatements that are free from malerial misstatements. whether due to fraud or error. Management'sresponsibilitv also includes selecting and applying appropriate accounting policies; and maliing accountingestimates that are reasonable in the circumstances.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.We conducted our audit in accordance with Egyptian Standards on Auditing and in light ofthe prevailingEgyptian laws. Those standards require that we comply with ethical requirements and plan and perlorm theaudit to obtain reasonable assurance that the financial statemenls are free from materialmisstatements,
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated firancial statements. The procedures selected depend on the auditors'judgrnenl including the ass€ssment of the risks of material misstatement of the consolidated financialstatements. u,hether due to fraud or error- ln making those risk assessments. the auditor considersinlemal control relevant to the bank's preparation and fair presentation of the consolidated financialstatements in order to design audit procedures that are appropriale in the cfucumstances, but not forthe purpose of expressing an opinion on the effectiveness of the bank's intemal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by man€ement, as well as eyaluating the overall presentation of the consolidated financialstatements.
We believe that the audit evidence we have obtained is sufficient md appropriale to provide a basis for ouraudit opinion on the consolidated financial statements.
Opinionln our opinion the consolidated financial statements referred to above, present iairly. in all materialrespects. of the consolidated financial position of Housing and Development Bank - Egypt (S.A.E) as ofil December 2019 and of its consolidared financial performance and its consolidated cash flo'ivs for the
1,ear then ended in accordance with the rules of the preparation and presentation of the banls' financialstatements. basis of recognition and measwement issued by the Central Bank of Egypt on 16 December2008 as amended by the regulafions. issued on 26 February 2019 and in light of prevailing Eg,ptianla*.s and regulalions related to the preparation ofthe consolidated financial statements.
Translated fiom the Official Repon issued in Arabic
Report on Other Legal and Regulatory Requirements
Nothing has come to our attention thal causes us to believe that material Yiolations rvere occurredregarding the provisions of the Cenfal Banli of Egypt. Banliing and Monetar] System Larv No. 88 of3003 for the 1'ear ended 3 I December 20 I 9.
The Banli maintains proper accounting records thal comply with the laws and the Bank's Articles ofAssociation and the financial stalements agree with the Banlt's records.
The furancial information included in the Board of directors' report, prepared in accordance with theprovisions of Law No.l59 of l98l and fu executive regulations are in agreement with the Bank's accountingrecords within the limit that such information is recorded therein.
Cairo
26 Februar,r- 2020
Tarek Salah
BT \1ahid -A,bdel Ghaffar atrd &Co
Public Accoutrtants & Consultants
(*\
il.l (,l" JJ l
Sameh Saad Mohened Abdel-Megeed
-{ccouDtability State Autborit}'
G buk"rtittyWAHID ABDELGHAFFAR & CO
4#I
HOUSINC .4.\D Df,\-ELOPMENT BA\XCO\SOLID.{TED FNA\CIAL POSIT]O\AS OF 3l Deccmber 2019
ASSETSCash and balances r*itb central banli ofEe}?tDue from bankLoatls & Facilities to customersFinancial assetsFinancial in\'esfnent at fair ralue throuer! profit and lossFinarcial asseb at fair value through ofier comprehensiveincomeFinancial assets at amortized clstsFimncial assets in subsidiaries and associaesHousing projectsReal estale investmentsIntangible ass€ts
Other assets
Fi\ed ass€ts
TOT.{L ASSETS
LL{BILITIES,{\D EQTTITILL{BILITIESDue lo hanLsCustomers' depositsOther loansDividends pa),ableOther LiabilitiesProvisionsCunent Income ta\ obligationsDeferred tariRetirement b€nefi r obligationsTOT.{L LL{BILMIES
EQI_iITl'lssued ard paid-upcapital,Amounts resened for capital incFaseRes€rvesRetained eamings (included n€t profit of the ],ear)Other comprehensive income
TOT,{L SILAREEOLDERS'EQITITYNon-controlling interestTOTAL LLABILITIES AND SIL{REIIOLDERS'EOUITY
3Ut2t20t9EGP
3Vt22018EGP
Jr76,19it"8558J88.117.792
r7.195.759.966
r.,186.3r8.9428.173-10i.691
r 3.609-15.1..10-t
\ote\o,
06)( l7)(18)
(19)
(20)
(20)(21)(22t(23)(21)(2s)(26)
11.689-653.0.1.r
1.822.514.58r2.649-27 6.814
84-307-028t2l -230.17 |
r.564.656,3 r3715.503.319
416277.J00
r .933.581 .018
:76-545.780
1
I J550.01{.4.t6I .877*509.0922271 ,933,931
ll120tJoJl1,t.r28Jl4
7,052,113,7191 ,031,913J5.t
5{rt9.205.t 60 16-131.i.1r..195
t27t(28)(29)
951J28.02JJ0,911,6{53J0
8JI.826.1666,8415.r8
3,469,7,t1J l0,128,828182
1626[,,W2671,72
39,676.455
{56-920.2i133-853.979.0J9
701.755.614612.994
1.100-212173614.513.479185,i37,77r
2.499.10636.433.85r
(30)(31)
(32)(33)
(34)
(3s)
J6.686.8J0J39 ,10.r ll.86.l-989
1,265,m0.000.379500.00{
2310,7963713J73,186,689
78,882,087
r-799-662-5561.964.453.105
( 1.641-104)
7.J37365.153 6.027 -171-551
95.009.668 91.101-949
-*1r19t05.t60 16.131-i41.195
n & \lanaging Director
Sameh Saad Mohamed -I{egeed
ChiefFinancial O ,u a
i(T SherifEl-Kelary
BT \Yahid -{bdel Chaffar & C0 E&\' -{llied for -A.ccouotitrg & -{uditing -{ccountabilir}- State Authorit}'
- The accompaaling notes, tom ( I ) to (40) fofln an integral pan ofthe consolidakd financial statements atrd to be .ead there\\ith.- Review report attached.
HOI:SI\C -,$iD DE\TLOP}IENT BA-\"KCO\SOLID,{TED I\CO]IiE ST.{TEIIE\TFOR THE PERIOD E\DED 3l December 2019
From l/l/2019ro 3lll2lz0l9
EGP
From l/l/2018to 3l/12,2018
EGP
6.152,892.170(2.932.138.120)
lnterest from loans and similar income
lnterest on deposils and similar expense
\rt interest income
Fees and commission income
Fess and commission e\pense
.\*et fees and commission income
Dividends income
Net income liom financial assets al fair value thrcugh proLt
and loss
Housing projects profitRevenue from toufistic assets management
Revenue from securir-.- and clearing services
Rgvenue Aom financial md Ieal eslate hvesting bar iingRevenue iom E-commer!.e
Revenue froln Mon€:Y tralsfer[,€as€d assets revenues
Touaistic assets manaepment eripenses
Security and cleaning services expenses
Financial and r9al esrate investing banliing expeDses
E-commerca expenses
Money transfer expenses
l,eased assets etpers€sBank ponion in income ofas-sociales companies
l.oss from financial assets
Loans impairment loss
Othsr provisions impairment loss
G€neral and administ alive exp€nses
Other op€rating revenues
\et income before income tar
Income ta\ expenses
\ct income for the tear
Nofl-controlling interest in net income for the )'earEquir_v holders ofthe bank
Net incomc for the !ear
Earnings per share
(7t
{1)
(r)
(e)
(t0)
(6)
{6)
(r3)
(31)
0l)(12)
i,r)
(Is) l?.50
6.623,709.177(3.628.299.640 )
2.995J09-r37
363330Jr7(3{S08.478)
328.521,839
6.673.505
63.163.{06
i.210.?51.050
332.813.785(28.880.64E)
i03.93i-ri7
I t.l9t.3i-1
61.812.76J
639,82t9161.447,128
15.889348
7923885&t,{70
I r 53s.46047252.854
(32,693f99)(34912.117)(3.466rs0)
(r8548,027)(2t*533-538)
(9.767,r84)
225.61538s(3315,000)
(4r5,r57J37)589"a$573
(r.685,m1571)
r6r,J89J29
692.678-641
i.280.306
6.?co.361
2.009.732
200.000
10.654.528
2.853263985
(639,1r 8537)
(25.907.071)
(27.8 r5.4r 0)(3.245.822)
7-246. t31 )
(26-931.63-3)
121.i95.9.19
(r%.995.09)(320:01.825)
( r.401.435.062)
85.954.471
2.600.387.309
(632.745.758)
1.96t.61l.i5 r
r6.628.J90
1.951.012.961
r.967.641.55 r
2.223SJ5JJs
10.158180
2,213.687,068
2,223.815J48
r5..12
HOUSL!iG AND DE\ILOPMENT B.AIiKCOIiSOLID.{TED ST.C.TE\IE\T OF COIIPREHE\SN'E T]\COIIIEFOR THf PERIOD E\-Df,D 3l Decembcr 2019
sat incooa for tbe yerr
Change in fair lalue of equi! inflrumen6 of financial assets dhir 1"lue through otle compr€hmsive tncome
Totsl .omprthcnsi}? idcoma
Frortr l/l/20l9to 31fi212019
EGP
2J23,845348
E0-58.r9r
FroD| lnlroltto3t/12lr0t8
EGP
r .967-64 I .55 r
( 1,64I,104)(20)
230J368-i39
-l
tlttrHOUSING AI{D DEVf,LOPMENT BANK
I
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITYnOR THE PERIOD ENDED 3l Decenber 2019
l'aid-in-cspitsl
1.265.000.000
Amountsroscrved for
crpitaliIaletse
Sprrirl Othcr Reserveof
GenerrlBst|kRiskt6t.2 t I
li)tslII RS 9Rcscrve
Grncrslrisk rcsarvo
RerrincdsarIlings
( I 164l,l 04)
(l,64l,lM)
80523.r91
( r96.948)
( t,641, t04) ( 1,641.104)
Balance ss of I January 2018Dividends paid for lhe yesr 2017Trarsfened to reservesReveNal of ths effect of sellinS assets
reverted to the bankChaflgc in financisl ass€ts at fairv6lue through other comprehensiveincomeNet profit for lhc year €nded 20 I 8
Brlrmct.l 3l December 2018
Balance as of I January 2019Transferred to general risk reseNeEffect oflFRS 9 implementationChsngc in financial assels at lairvalue through other comprehensiveincomeSelling of equity instrumenls at foirvrlue through other comprehensiveincome
Dividends paid for lhe year 20l8
Transfened to r€servesAmounts rcs€Ned for capitgl increaseAdjustmentsNet profil for the yeat
Brlinc.s oi rt ll Decembcr 2019
436,329.@4
53.776.633
732.000,000
400.000.000
| 4,5,16,205
t.307.563
l.%2.608.685(326,?93,500)(602,375.041)
4.405.093.t48(326,793.500)
t4,447.953
t47,231,t08
490.105,727 I,132,000,000 14,,147,953 15,853,768 18,000 t47,237,t08l95l,0l4%l
. 2,964,453,10s
53,737
(r 96,948)
I ,265,000,000
1r6s,000,000
|,95 t,0t2,96t6.027 .41 4.551
6.0r?,4741"a5?
(63,r24,285)
E0-s23,191
490,105,121 t,t32,000,000 14,44?.953 15,t5J,76t- - (s.102.eE7)
It.000 l{7,2.t7,101t- ( r47,2J7,tott)
- 81,241,76tiJ79-500,000 (126,s00,000)
,00.000,000(2s3O00,000)
(846,517,1l9)
(98J,758,106)
E9,2t5,Et0
l-509,7712,213,6t1 ,063373,tt6,6t9
- lJ09'77i2'2136t7,06t
7r8r2,0r7 ?,,13u65,1s3
1s2J40.095(6J,124,2Es)
2.964.45J.t05
2J,8! rJ70 23Jl t 970
(E46,sl?,119)
2.5 t t"t3t 4.500
1,265,m0,000 379,s00.000 444,u1,49s t.779.000,000 9J,14J66 tEJ65.606 22,5{X)
5
I I ttttltttlllll
l,rg{lrcsetvcs
(;orcr l Othercomprehensive
income
HOLJSI}{C AN'D DEIILOPMENT B.{\-KCO\SOLIDATED ST.{.TEIIE\T OF CASH FLO\\ SFOR THE PERIOD E\DED 3'l December:019
Cash Floqs From Opcrating actititiesProfit before ta\.{,dj ustments:Depreciation and amonizationLoans impairment losses
Housing projects and other assets impairmentOther prolisions-charged durirg the learRevaluation difference of financial assets al fair value lkough profit andlossFiDancial assets iopairmenl lossAmonizarion ofdiscount - financial assets at amortized costBar*'s ponion in income ofassociates companiesOther pmvision utilized during the yearProvisions oo longer requiredGain from selling trxed assets
Opcratiag incoarc bcforc charg.s in opcrating rsscts and liabilitiesNct decrease (increase) ir .ssetsDue from banlisFinaDcial assets odrer than fair value through pp6t and lossFinancial assets at fair yalue through profit and lossLoans alld adyancrs to customers and bankHousing Projects and real estate invesfinentsOther assets
Net (decrease) increase io liebiliti€sDue to bar*sCustomers' deposilsOther liabilitiesReti.ement benefi t obligationsIncome tari paidNet cash llows from (used io) opcrating activitiesCash flows from iDvestiDg .ctititiesPalments for puchase of trxed assersProceeds fiom sale of 6xed assets
Paynents for purchase of financial assets otber thao fair value tfuoughprofil and loss
Proceeds ftom sale of financial assets other than fat value through profiland lossPalmerfs to acquire associales companiesPalments for purchase of intangible assets
\et cash Ilows us€d in iulestiog activiticsCash flows from FinaDcitrg acth'itiesIrog-term loansDividends paidNct cssh florvs from linancitrg activiticslncrease (decrease) in cash and cash equivalents duriog the ),earCash and cash equivalent at the begirming ofthe ),earCash and cash cquiralenls at the eDd ofthe yc&r
Cssh and cash cquiralcots arc rrprescnted in:Cash and balances with Central BaDk ofEgptDue from banksFinancial assets at fat value throug:h other comprehensi\e incomeObligator-v resen e balance s'ith CBEBar* Deposits $ith maturiqv more rhaD three-monthFinancial assets other than al fair value through profit and loss \ ithmaturiry more than three-month
Cash aod cash equivalents at the eDd ofthe year
From 1/l/2019 to3 t2D0t9
EGP
Frcm l/1,2018to 3l/122018
EGP\oter
(231,(24't,(261(13)(12)(31)
(9)
245,.150.0704r5,157J37
7,965.01.1
2,1J71.8{5
l14.332.168196995.09915.822.6?9)
320.201.825
{ .16-05 I -6-l.l )
( 10.1.18.637)(21t.396-949)
(19.363.998)
(-j.131.519 )
2.863.261-98s 1.600_187-j09
i20t
(31)(31)(t2)
(.U.897.1 97)
3Jt 5.000(10,719*502)
(225,6153&s)(l{,787,151)
(613,92s,418)(J3{2,799)
2.6i6.235-798 t.015-999-875
(6jJ5,{9s9ss)(r,{6,852,002)
5,165*577(3,716281,831)
3335771572932r6505
191.$1.7727.057.666:91
( r ,98,930,663)3r{2,60-l
(780.973,971)
l.l18.790-918865.634-462532.759;109
(2.367 .0'13.477\(11 t ;t65.019)
26't -t78-507
2.16.337.906(6.760.983.611)
(260.498.730)
2-640-504(596,101.800)
(2.715,O22,6t9\ (:1.697.080.776)
(J66,820,073 )
3.973,039
( 1589.(m3t-r)
(312-398-269)
2. r21.040
(2-120-503298)
500.2t 9.921 435.020.000
t207 .454.1 50)(t2t-926.A061(77.010.051)
t1,628,617-i08)
2.r3:63-s27(8r028856s)
l-061-664.,130(326-386.903)
{597.025.038) i 352i1.521(.r.9.r0,685.1 65 )
8,173599,0J2
(6.286.9.15.332)
14.460.544.37,1
1.232.913-8?7
Jr76.l9{.8ss8J88,r 17,792
t5J96.71r,757(3559,41 0,6r 2 )(5,872,012840)
(15,796,686175)
8.173.599.042
1..186.318.9{28-171:01.697
l+.389.810.189( 1.643-612.337)( I ..1.12.3 1 5-360 )
{ 14,389.810.r89)
b
131) 3232.913.3,1i 8.173.i99-0J2
(1.115.1.11.08t )
HOUSING .{\-D DE\TLOPMENT BANK\OTES TO THE CO\SOLID-{TED FI\,A,\CIq,L STITE]IIE\TSFOR TIIE PERIOD E\DED 3l December 2019
l. Backeround
Housing and Development banli provides Ba.king Sen'ices for Corporales rather than Investments. retai I Banking Sen'ices in the Arab republicofE$?t throug! 92 branches. and hires 2632 emplo)'ees at the date ofthe financial position.
Housing and Derelopment bu ( is alr Eg,?tian Joinr Sock compar)- established as Investments and Business Bank on 30 June 1979 b) l,irtue-ministerial Decree No.l41 for aysat 1979 and it handles its activi! ttrough the head omce in Gza golemorare and fte banli is registsred inthe Egl?tian Slock Marlel for Secudties-
f. Summan ofSignificant Accounains Policies
The principal ac'cormting policies applied in the preparation ofthese financial statements are set out belo$. These policies have beeo consisentllapplied to all th€ yeaN presenred- unless olhe.$ise $ar9d.
-{, Basis of Prepar&tionThe financial statements have been prepared in accodance t{ith instructions ofcentral bank ofEg$t apFoved b}' its board ofdirecto.s on16 December 2008. in addition to the hi$orical cost basis. modified by the revaluation offinancial assets and liabilities originalll valued\yith fair value through profits and losses. and finaocial assets at fair value through other comprehensive income- and all financial derivativescootracts-
These consolidated lmancial stalemeots hale beel prepared in accordarce uith reler.aDt local la\r's investment in associates have beenpresented in barft's consolidated financtal statements and measured using equiD mgthod less impairment loss.
These consolidared financial statements have be€n prepared until 3l D€cembcr 2009 using central bank of Egpt instructions prevailinguntil this date. this panially differ froE the baDks prsparation arrd prerntations mles and lhe recognition and measurement basis approvedb!'certral baDk of Eg}Dfs board of dLectors on 16 December 2008. At the dale ofthe prepaEtion of coGolidded financial statementsdated 3l December 2010, the bank's management has amended c€rtain accounting policies and basis ofmeasuements to be in accordancewith the preparation and prcs€ntsrion requiEmeDts and the recognition and measurements basis ofbonks consolidded financial statementsapproved fiom the central ba* of Egpt's board ofdirecto.s on l6 December 2008.
These coDsolidared financial $atemenB hale b€en p.epared in accordancr with fie fustructions ofthe Cenral Bank ofEglF (CBE) rules
approved by its Board of Directors on 16 Decernber 2008: that is differ &om $tat is added l'mder insEuctions of Central Bar i of Eglptissued on 26 FebruaD'2019 regarding the implementation of IFRS 9 - financial insrruments .
@IFRS 9- Fimtrcial lnstrumcnb
The Bank applied the instuctions of the Central Bank of ES,?t (CBE) rules IFRS 9 "Finarcial lnsruments" dated Februa4 26. 2019srarting from Jaouary' 01, 2019. Requirements ofIFRS 9 represents material change than requirod und€r E$?tian accounting standad no.26 ''financial insmrment- recognitioo and measuementr specially $heo related to classification measulement and disclosure offinancialassets and some offinancial liabilities, the folloPing suomarize the main accounting policies charges resulted from applying the requiredstandards:
Classification of fioancisl asscts atrd liabilitiesFinancial assets have been classified rhrcugh th€e main caregodes as the follo$ing:- Financial assets at aDonized c!st.- Financial assets ai fair value thrcugh other cnmprehouive income.- Financial assets at fair value through plofit alld loss.Based ofIFRS 9- financial assets have been classified according to how they ale maraeBd (the e iy's business model) and their contractualcash flow characteristics. Therefore Egl?tian accsuDting standard no. (26) is no longer applied tlleld to maturiq,- Loans and a\railable forsale).
The implicit derivative contracts shall not be separated q,hen derivatives arc associated *ith a financial asset and therefore tho implicitderivarive mntract is fully classilied according to the related financial asset.
The change in financial liabilities at fair vaiue tkough profir or loss is preso ed as folto*s:- The change in the fair lalue rclaled to rhe change in the degree ofthe credit raing is peseflted in othe. comprehensive income.- The remaining momt ofthe chadge in fair value under (net income ftom financial assets at fair value through plofit or loss) is
Feseoled in the income stalement.
HO U SIIT- G AI{D Df VE LOPMEN T 8.4.\-K\OTES TO THE CO\SOLID.{.TED FI\"{\CL{.L ST.{TE}TE\TSFOR TIIE PERIOD E\DED.]l December 2019
\Ieasuremeot accordins toCBf irstrucdon dsted
l6 D.cember 20m
lressuremeal to accordioqIFRS 9
ImDairmeor of financial assctsIFRS 9 and Ceutral Banli ofEg/pl (CBE) insnuction-s repiaced the impairment loss model recognized according to EAS 16 \\ith expectedcredir loss (ECL) model also, IFRS 9 & CBE in-structions rcquires Aom the bank to implentent the measuemenr of expected credit loss(elicspt for measured al fair Yalue through profit and loss and fair value through other comprehensive income).
The ba.nk excludes the follo$ing fi'otrl $e calculation ofexp€cted credit losses:Deposits al bank $ith a maturit-v dale ofone mon$ and less than the date ofthe fiJlancial positiorlCunEnt accounts aI banks.Balances at the CenEal Banli in local cua-ency.Debt instrumfits issued by the Eg,lptian gove.nment in local cun€nc]-.Prolision shall be identified based on the erpected credit losses relating to probabiliS, ofdefarlt over the next 12 months unless the creditrisk has infieased substantially since inception.
Sesment reporthsAn operating sggment is a group ofassets and operations providing products or services wfiose risks and benefits are different ftom thoseassociated uith products or services provided by other operaling segmenrs. A geoeraphica.l segme prolides products or senices u ithin aspecific ecolomic envi.onment characto.ized b]' risks and benelits different ftom those related to olher geographical segments operating ina different economic environmenl
Trsnsitiotral provisioosThe banli has not re-measured the rccognized Enancial inslruments in the compantive financial stal€me s. but onl) reclassified lhefinancial assets alrd liabilities in the comparalive figures to conform with rhe presenEtioo method of the financial staiements. subject toapplling the starda'd for the first rime and is therefore nol comparable.The impairment provision ofthe financial assets recognized in the financtal position is deducted liom tfie finarrcial asset ralue at lhe tirn€of prepadng the financial position statemenl ri.hile the imf,airment povision ofdre loaD commitmens- financial guarantee contEcts and
co ingent liabilities is recognized urder other provisions of financial position obligalioos,
Classification of ,irarcial asscts and financial liabilitiesl- Re-classification ofthe firancial assets ard financial liabilities at &e date ofitritial applicarion ofCBE s instructions regarding IFRS 9.
The following table shows the odgioal measurement categories of frnancial assets and financial liabilities acro.ding to CBE instructiondared 16 Decamber 2008 and new measrrement categories offinancial assets and finarcial liabilities according to IFRS 9 a-s of I Januaq't0r9:
Carn'ins amountacmrding to
CBE instruction dated16 December 2008
Ellrct 0f IFRs 9
I Finmcial rnrestmem held forI tradinp
AEilahle for sale
Financial inr'esfieflt held fottrading
AmortizEd c{st
Frnancial inlestment held fortradmg
5s!!ECash and due from CentralBar* ofE$?t (CBE)
- Due from bnksTreasury bills
Fair r-alue through profit or loss
- Fair r€lue through othercomprehensive incomeHeid to marur4'
, Amo.tized costl- Loans and credit facililics Io
customersFinancial asse6 in subsidiaries3nd associates
: Housin! Dmiecls
Ral estrte investments
. Intangible arsels
. Oher assets
Amonized cost
Amoaized cost
A$o[ized cost
Amonized cost
Amonized cost
.AJnonized cost
Amoniz4d costFinancial assets at fair vslue lhrough other
comprchasive inco$dAmortized costFinancial inveslrnent at fiir vahe lhrough profit
and lossFinBncial assets at fair rdue throu8h o$e.
compr€hensive incoEeFinanci6l assets at fair \alue though other
comprch€nsive incomeFair value through other comprehensive income
Amonized cosl
L486.)18,942
8J73207,6979,813,134.426
3E9,010,427
53,327,380
2.486.3 l 8.942
8.772.958.625
376J45.780
t,339.073,402
l:.683,555j40r3.891_695.3r6
.1.089,789.993
13.6419.25,i..104
r_E::.5t4.5Er 1.811,5r4,58r
-Amonized cost
Amortized cost
.A.rlodzed cost
Amortizcd cost
Amonized cost
Amonized cost
Amortized cost
2$49276.81484,307,038
rlr:30,t7rr .564,656_31 3
2.U9.276.81484.307,028
r2t:30.171I .564,656.i l 3
8
HOUSNiG d\D DE\:ELOP]VIENT BA\I\OTES TO TIIE CONSOLID.A.TED FL\-..{\CI \I, STATE}IE\'TStOR THE PERJOD E\DED.ll Deceober 2019
Fixed assets
Totil AsscB
Li.biliti.s .rd E{uiaLirbiliticsDuc to t,ar rs
Cu$omers depositsLother loans
Dividends payable
t other LiabilitiesI
[_ I,rovisions
Cufc.llt lncome ta)( obligalions
Dcfdred ExI nairement benefit obliparrons
Lro.", "nn,,o.o
, Eqoio
I lssued ond raid-up-capital
715.503.3t I 715.503.i1s
46:3I.54t.4S5
Amortized cosl
Amortized cost
Amonized cosl
Amortized cost
Amoatiud cost
Amortized cost
-Amortized cost
.qmonized cost
Arnottrz€d cosl
Anonized co6r
Amonized cost
Amonrzed cost
Amodzed cost
Amortized co6t
-funonized c6tArnortized cost
456,920-:51
.3i_E5.3.979,049
701 .?55-61,{
612.994
4-?00-: I 1.273
6745t3.479r85J37.7,1
2.899.?06
36.433.85t
456.910.52
i3.85t.979.04970r.755,614
42N,?t2.273r-014.731.800
r 85J37-?7r
2,899,706
16,433,651.r0-l t:.t64.989 40-45i,083i I 0
t:65,000,000I J99,66.2,556
2.962-8 r 2,001
r :65,000.0001.736.538:7r
l,%2.8 r1001Rerained eamings (included netprofit ofthe year)
Totrl Shrrcholdcrs' Eqrit-r
- \ on-{oatrollirg intercst 9r:01.9i9Total LirbilitiesShereholders' Equi{'
and
Settlement of carryitrg amounts offinancial assets and financirl lisbilities at the dste of itritial applic{tiotr ofthe CBE'S inskuctionsregarding IFRS 9.The follo$ing table shows the settlement ofthe car)ing amounts offinancial ass€ts and financial liabilities according to CBE instructionsregarding the conversion Io IFRS 9 on I Januar)' l0l9:
Effect ofimplementing IFRS 9:
EGPEffect of rscogniziog erpccted loaD lossProtisions according to rccorditrg to CBE instructiol dstedl6 Decembcr 2fi)EImpairment ofloa! and facilities loss provision to cugomersContin$nt liabilities reserve
Total
2.027 ,02822159,7d1,681
2-AA6.i 69.902
Expected lorn loss Provision according to according to IFRS9t oan and facilities loss provision to customelsExpected loan loss provision for cootingent liabilitiesExp€cted loan loss provision for loans arrangernentsE\pected loan loss provision for due from banksExpected loan loss provisioo for Financial assets at @ortized cosls
TotalDifreremc due to implemertation of IFRS 9
1.7.13587J09r22393.760211_16,6212
249.0726,097801
2.119.89,1.187
63.12{r85
9
t-
HOTISTI\G A.|'iD DEITLOPMENT B.{\K\OTES TO TIIE COj-SOLID.{TED FI\ANCI.{L ST{TElr{EliTSFOR TIIE PERIOD E\DED 3l December 2019
The follo$ing table sholr,s the net amounts of financial assets and financial liabilities accordilg to CBE hstruction dated 16 December1008 and IFRS 9:
C&rnipp amoupt eccordiosto CBE i.structiotr datcd
l6 December 1008
:.486-il8.9.ll
5l-ill-181)
J-089.789,993
l-82_sl{.581
Efi.ct ofarparGd loan
loss
CrrniBr rmount,ccorditrg
IFRS 9
:.,r86.i r 8_94:
8.77:.95S.6:5
Cash and due iom CmtralBark of Eg,.pt (CBE)Due from banksTreasu{'bills
Financial inlestrn€nt held fortradingAvailable for salc
Fair \aiue through profit or loss
Fair \alue through olhercomprchensive incomeHeld to maturily.ABortized qost
Lmns and credit facilities to
Financial aas€ts ,n subsidianesand associates
Horsing projeds
R€al estate invesrmen6
Intangible assets
Otfier assets
Fixed assels
Totrl Assctg
Liil,ilitics rrd EooitvLirbiliti.sDue 10 bar*sCustomers' deposits
Oths ioans
DiYidends payable
Orh€r LiabilitiesProvlsioDs
Cunent Income ta\ obligrtionsDefgred ta\Retir€mfi t beneiit obligations
Tot l Lisbilili.s
EquilrIssu€d and paid-up-capita!
Reserves
Retarned eaminSs (included n€n
profit ofthe year)
Totd Shrr.hold.rs' EquitfNoHoot olliog int restTotsl Liabilities andShar€holdrrs'EquiS'
RGclassiIicatitltr
l:-r;.!ri:l8_773_?07-69?
9.873_t.i4.426
189.0:0_J:7
( 9-873.1 34-4:6 )
(3 89.0r0-4r7 t
(53,i:7.380)
376-i45.780
I .i39-07t.40:
(4.089J89,993)
I1,6E9,653.044
376j45,7801.3i9-071,402
r:,68iJ55,140r3.892.695-3r6
:.649:76.E I 4
8.1J07.0:8
lll:30,l7tI .564,656-3 l3
715503,319
:.649:76.8r-1
84.307.0:8
I I:30,171r,564.656.31i
7r5j03.3r946-2i t 5,t1 .495
456,9]!.25233-853-979,049
701.755.614
6t2-99442UJ2\2273
674513,479
185-s37,71
2,89JM36,433,85 |
J56.9f0:5213,853,979,019
701,755.614
611,8)4
4200212,273
I ,014.73 1,800
l85J3Z7/l2.899.706
36,431,851
r t65.000,000t ,799,6tr2.556
2.962.812,001
: ll --r jj- r : :::-91201.949
46:11.54t,.195 -.:
l0
HOTISI\G .{I(D DE\TLOPMENT B,{NI(\OTES TO THE CO\SOLIDATED }'L\-A\CL{L ST.{TEIIIENTSFOR THE PERIOD E\DED 3l Decembcr 2019
The Crroup fulll consolidares is subsidiaries liom the effective dale in *hich conEol is obraiDed and deconsolidates them Nhen such controlceases to e\ist.
Infomation on subsidia.ies is set out below for companies wbich are combined in tfie bar i's consolidated firEncial statements as of -llDec€mber 20 I 9.
Direct & irdirectshare 7o
920/094,960/09!,20yo85,92062,62Vo$.430/oK,92vo92,71o/o94,82yo97.ttyo
B- Barir of nrer ion ofconsolidationSuhsidiaries
Subsidiaries companies are confolled b] the baak control exiss *hen the banli has the power directly or indirecll) to govem the fmalrcialand operating policies ofao entitl' to obrain benefits liom ils acrivities. This is usualll achieved when the banli ouns. directl] or indtectl)-through subsidiaries. moie tha, halfofthe voting power ofar enti! ($hen the bank's shaEholding portion exceeding direoll or indirectll50o,ilofthe paid up capital ofthe subsidiai) )- the existence and efed ofpotential voting riltrc that arE cunen ) exercisable or clnverribleare considered when ass€ssing \ahether tie Crroup has contsol.
Holding compan] for lnvestment and DevelopmentHousing and development company for real-estate investn0entEl-Tameer company foi financial and real estale investment bankingEl-Tameer compaly General and envircnmental sen'ices - HemayaEl-Talnegr company for real estate and buristic asset MaD€ementReai estate delelopment frmd - Nemmoln-formation and electronical trarsaaions services companyEl-Tameer coEpany for real estarc development and investmentHemaya company for securiLv .nd money transferHD for leasing
Basis ofCombitratiotrsDuring the preparation of consolidated financial statements. the bank combines the cusolidared financial stalement with subsidiaJ-\'
mmpanies financials statemen8 throueh the cmbination of similar items of ass€ls, liabitities, ol,ner'5 equitli reveDues 8nd e\penses forthe purpose ofpresenting rhe consolidated financial stalesEnt as ofone business unit gohg thrcugh following steps during the preparationof consolidated fi nancial statement:- Eliminarion ofthe book value for itrvestments in subsidiary company according to Equiq method, including share ofholding company
in the equiry- ofeach subsidiary company.- Noo.contolling iaterest in profit/ loss ofsubsidiaries is coruidered during the fiscal year in the pr€paration ofthe financial reports.- Non-controlling inteest in net assets ofthe subsidiaies is dgtermiDed during the prepardion ofconsolidated financial statements and
presented in the clnsolidaled finatlcial $arements in the o\ ner's equitl' ofholding coopany.- Elimination ofall inte[elated revenues and oipeoses tralsactions Mween $e subsidiaries rvilhin rhe group.- Elimination ofall balances resulted Aom fie transactions beh{een the subsidiaries within the group. aiso group transactions including
rcvenues. e)ipenses and dividends besides elimination ofall reYenues and losses resulted ofsuch fi'ansactions and recognized in theassets I alue.
- The financial statements are presented using same accounting policies for similar tansactions and same events under same
circumstanc:es.BJ. Associrt.sAccording to the equit),method. an in\.estment in an associare is iDitially recognized in the sateme of fitrancial F,osition aI cost and issubsequentl) adjusted to recognize the Group's share in profit or loss, and othgr changes in the net assets. ofthe associale.
C, Translation of Foreign CurrenciesC.l. Functional and pres.ptation currepcvThe financia! stalements are presented in Eglptian pound, uhich is the badi's functional and presentation curenc1
Cr. Functiom aod balatrces ir foreign currencicsThe bank maintains its accounts in E$?tian pound and transactions arc rccsrded in foreign curencies duriae rhe financial lear on the basisof pR\ailine exchange rates al lhe date oflhe t ansaction. monetary asses and liabilities denominated in foreign currencies are ren-arslatedat the end of$e financial )€ar on the basis of pler'eiling exchange rates at that dare. Foreign erichange gains and losses rcsulting from thesettlement and translation ofsuch nansactions and balances are recognized in the income stalement and reported under the follouing items:
tl
HOI-]SING AND DE\TELOPMENT BANK\OTES TO TIIE CO\SOLIDATED F[i,,{\CIr.I- STATEMENTSFOR THE PERJOD E\DED f,l Dccember 2019
Net income tom firlulcial assets ar fair va.lue thDugh prDft aDd lossror net iacome from fisancial instruurents classified at fat valuethrcugh profit and loss ar the dale of inception of rhe assets4iabilities or those classified ar the dar€ of inc€ption uith its fair valuethrcu€D profits and losses acc{rding to their Epe.Sharcholders' equi.l" offinancial derivatives as a coverage for cash floulnet investment or as a coverage for net investmenl,Other operating income (expenses) for the other items.Changes in fair value of financial instrurnents denominated in foteign curencl classified at fair value lhroug*r other comprehensireincome (dobt instruments) is anal)zed b€tween valualio! differences fiom changes in amortized cost of the instrumenl differencesresulted fiom changes in the prevailing orchange raler differenc€s resulted from chaflggs in the fair value of the instrument. anddifTerences res,ulted from the impairment of the financial assets. Those changEs are recognized in dte income statemenl as income onloans and similar items regading changes in amortized cost and differenc€s rElaled to changes in the exchange rate are recognized as
other operating income(expense)- changes in fair lalue are recognized in equilv(Other comprehensive income/Tinancial assels al fairvalue rlrough o$er profit and lossl.
Eraluation differences resulting from non-monetar]' items include profit and loss resulting ftom changes in iair value such as equiqinstruments held at fair value throu-qh profit and loss- \r'hile evalualion differences resulting ftom equig- instnrments classified as financialassets at fair lalue through other comprehsnsive income are recognized as otber comprehensive income.
D, Fidancial lssetsD,l. Rccosritiop
The Bank classifies its finaBcial ass€ts into the follolring categories: fair value through profit or loss (TVTPL), fair yalue through othercomprehensive income (FVTOCI) and anortized cost. Management determines the classification of its investments at initial recolxrition.
D.?. ClassificatioaFina[cisl assets Policies spplied stirtitrq from Japusrr' 01. 2019:
At the time of initia.l recognition- the banl( derernines the classification of fuaicial assets lo be classified as amortized cost. lair value
through other oomprehensive inoome (FVTOCI) and fair value through profil or loss (MPL).
Financial asset classified ar amortized cosl ifthe follo*ing two conditions aIe met and was not recognized at inceprion date by the ba'lk as
fair value throug& profit or loss:- The financial asset is retahed in the business model offinancial assets held to collect cotrfactual cash florv.- The contrachral terms ofthe financial asset at specific dates result in contractual cash flows ofthe asset represented onl) in the p.incipal
financial instruDent amount and the returrl
Financial asses classified as fair value throuefi other comprphensive income iftfie follou'ing two coriditions are met and was not recognizedat inceptio[ d81e by the barlk as hir value through profit or loss:- The financial asset is retainsd in the business model of finmcial assets held to collect conFattual cash florr's and sale5.
- The cofimctual terms ofthe financial asset ar specific dates result in contractual cash flo\ 's ofthe asset represented only in the pdncipalfinancial irsfument arbount and the returrl
The debt instswnent thar was not allocared ar the initial recognition at the fair value through pmfit or loss is measured al the fair value
tluouet other comprehensive income ifboth ofthe follou'ing conditions are met:The financial asset is letaiIled in the business model thar aims to collect contrachral cash flo\Is and sell the financial asset.
The contlactual terms oftte financial asset on specific dates result in cash flows ofthe asset aDd not representsl only the principa.l
debt aDd the retum.
Upon rhe initial recognitior ofao equity instsumeor thar not held at fair value th$ugh profit and loss. the bank may malie an imvocablechoice to plesent subsequertr charges in rhe fair value though the other comprehemive income statement. This choice shall be made
lor each investmem individually.Tle remaioing financial assets arc classified as investmerts ar the fair value through proft or loss-
ln additiorL upon the initial recognition, the baflk may irrevocably allocaie a financial asset measued at the fair value through prcfit or loss.
although it mee$ the cdteria ofclassification as a financial asset al amonized cost o! at rhe fair value through other comprehensive income.if rhis action substaatialll., reduces the inconsisteDry that may adse h dre accormting measuremenl
I]
HOLI SING .{ItiD DE\TLOPMENT B,{\iK\OTES TO THE CONSOLIDATED FL\_.4.\CIAL STA.TE\TE\-TSI:OR TIIE PERIOD E\-DED 3l December 2019
Financial Insrument llethods ofMeasurtEent AccordiDg to the BusiDessMod.l
l) The baDli prepares. documents and approves a business model in accordancr with the requirements ofthe IFRS 9 in a \r'a) thar reflectslhe Bank s to the finarcial assets afid their cash flo*s as follous:
The bar i shall eYaluale the busircss model goals oa the portfolio's level in uticb the financial asset is reiaine4 being the \r"y that rcflectsboth the methods of lrork management and information provided. The information to be talieD into consideiadon utile evaluating rhe
business model goals iDclude the follo$ing:- The approved and documented policies and the objectives ofthe poftfolio in addition to 4plying such policies in practical realiry.
specially whether the management srategy focuses only on collectirg the contractual cash flows ofthe asset and retainin8 a cenainretum rate to meet the dates of financial assers' maturity $irh the dales of the liabilities' maturit) that are funding such assets: orralher on generating cash flolvs drough seUing such ass€ts.
- The method ofevaluaring the pordolio's performaDce and reponing the same to the top managemeol
Fair \ alur{mortized Clost Through
CoElprehersir,eIocome
Through Profit or Loss
Equi(r Instruments One-time irrevocablechoice ar the initialrecognition
Normal transaction of equiqinstruments,
Debt lnstruments Business model ofassets beld tocollect contractual cash flows.
Business model ofassets held to collectcoBtractual cash flo$sand sale.
Business model of assets
held for Fading,
Business ltodel Basic CharacteristicsFiBancialAssetBusiness model of financialassets held to colleclcontractual cash flows
. The busioess model is aimed to retain thefinancial assets to collec{ the contractua.l cash floqsof the inl'estment principal alnolnlt and therevenues.
. The sale is an e-jicsptional actioo comparing tothe pupose of this rnodel and lhe terms of thestandard represented in the deterio.ation in thecreditworthiness ofthe financial instnJment issuer.. l€ss sales in terms offrequency and value.. The bank performs a clear and reliabledocumetuation offle rationalg ofeach sale process
alld its compliance $,ith the requiremefts of theSlandard
Financial assets st amortized cost
Financial assets at fair lalue throughcomprehensive iocome
Business model of lunncialassets held fo. thecollection of contractualcash flows and sale.
. Both rhe collection of contracnral cash flo\r,sand sales are complementary to the otjective ofthemodel.. Sales are high (in terms offrequency and value)comparcd to tlle business model held for thecollection of confactual cash flows-
Financial assets at fair value throughprofit or loss
Other business modelsinclude (t adiDg -managing the financialassets based on fair value -morimiziag cash flousthrough sale)
. The busisess model is not aimed to retain thefinancial asset for thg collection of contractual orthis Etained for lhe collection of cortractual cashflows and sales.. Collecting mntraflual cash flows is an
exceptional action comparing to $e modelobjective-. Man€ing the finallcial assets at the fair valuethrough proft or loss to avoid inconsistenc"- inaccounting measurement
l3
B[sincgs models Er'duatiotrI ) Followirg debt and equitl instruruents arc classified ed neasurEd accordiry to the follori,ing:
I I
I
I
HOLJSING,{iiD DE\TLOPMENT B.{\'I(\OTES TO THE COIiSOLIDATED F[i.{ItiCIAL STATEMEMSFOR TIItr PERIOD E\DED 3l December 2019
- The risks affecting rhe business model performance including the nature ofthe financial assets retained \ ithin such model and themethod ofmanafdng such risls.
- The method ofeva.luating the performance ofwork maiagers (fair value and/ or r€tums on the portfolio).- Frequenq-. \'alue and timin8s of sales' tsansactions in the prer.ious periods: the reasons of such transactioos: as well as the
expecrations regarding the future sale acti\-ities. However. the informalion ofthe sales' adivities are no1 talien into cusideration inisolalion.. bul mther as a part ofa compreheDsive evalualion ofthe merhod of carr,ving oul lhe bank's goals regarding mana€dng
finarcial asseLs md ho\r casb flos's are generated.
The financial assets- which are retained for &e pupose oftrading or those which are mana3red and evaluated ba-sed on tie fair value. are
calculaled by the fair value througfi Eofits and losses because they are not retained for the purpose of mllecthg contrafiual cash flo*s and;
or selling financial assets.
Evaluating \i'hether the assefs cortractual cash flo\$ represent payoents that are onl-l' limited lo the ori-sinal dnount ofthe instrument and
the retum.For the purpose of can-1,ing out this evaluation fte banli defines the original amortrfi of the financial instrument as lhe fair value of thefinamial asset at initial recognition- The renlln is defined as the consideration ofthe time value of money, the credit risk attached to theoriginal amouot dudng a certain period oftime, other basic lending risk and costs (such as the risk ofliquidiq and administrative costs).and plofit margin.For lhe banli to determine $,hether the asset's contiactual cash flous are palments that are limited to the asset and retum on the financialinstrumenl the banli puts the conEactual terms of the instrument into consideration. This includes evaluating *t€th9r the financialinstrument includes contractual tenns thar mal chmge the timing or amount ofconFactual cash flows. which may lead to non-acceptmceof such terms.For the purpose of carrying out the above evaluation" the Bank needs to talie the followfug into consideration:
- Potential events that may change the timi[g or amount ofconlractual cash flows:- Characteristics of the financial leverage (rate of returD. tirne limits. culren"-'--..)- Terms of pmmpt pal,ment and extension of time limits;- The rerEs dlat may limirs bank's abilir)* to claim cash flows from crrtain assets:
- The chamcteristics thal may amend the consideratio! ofthe time value ofmoney (re-€stiEaring the retum rate on aperiodical basis),
The bank does not reclassify groups of financial ass€ts rmless the busiress Eodel is changed, which rarely happens, or does not happen
except iniequently or when the credit capaciry ofone ofthe debt instruments declilles at arortized cost
E. Ofrscttitrs bctwccd Fioaocial Ipstrup.ntsFjnancial assers and liabilities ale oftet when the bank has a legall!'eoforceable right to offset the recognized amounts and it lends to settlethis amount on a net basis. or realize the asset and settle the liabilig siDultaneously.
Repos and rcverse rcpos agreemeots related to treasur)'bills ee rctted on dle balance sheet and disclosed Erder'teasury bills and otiergoverurental ootesn caption ofthe balance sheel
F. Fip8pcial Dcrh?tivcs lNtrumetrts 8trd hcdshq accoontiE. Derivalives are initiall], rEcognized ar fair value on *re date oo q{rich a derivali\,e conaad is entered into and arc subsequently re-measured
ar their fail value. Fair values are obtained fiom quoted market prices in active ma*ets- including rec€ ma*et transactions. and valualiontechniques, including disclurted cash flow models and optioos pricing models. as appmpriate. All dedvatives ate carried as assets $henfair value is positive and as liabilities when fair value is negative.
.Embeddgd derivalives are not isolared ifrhey were included in a finarcial insfument thal falls under the finarrial assets definition as per
IFRS 9 *Financial Instruments.
. Recognizing the profis and losses resulted fiom the fair value depends on whether the derivative is a covering instrunent provision andaccordiag to the nature ofthe covered itern the bank classifies some ofthe de vatives as one ofthe follo$ing:
. fusk Hedging ofthe fair value ofrecognized assets and liabilities or coafirmed commitme s (fair value hedging).
. Risk hedghg of future highly expected cash flows relared to a recoenizes asset or liability or rclaled to as expected tmflsaction (cash
flows hedging).. Hedging accounting is used for provision derivalive for that purpose ifthe needed conditions are available.. At the initiation of the transaction tlte bar ( documents the rclations between the coveEd items and hedging instsuments. also dte
objectives of risk maragement and the straletr-. ofhavttg differsnt hedging traDsactions. At the begirning of hedging and consciousl,\'.the banli docwnents the estimaion of u,trethq the derivative used in hedging trdrsactions are effective in facin-e tfie changes in the faitvalue or cash flows ofthe covered items.
ti
HOUST{G -A\.D DE\TLOPMENT BAITI(\OTES TO IIIE CO:\-SOLIDATED F[i-{NCL{L ST.{TE\I[\TSFOR TIII PERJOD EN'DED 31 December 2019
F.l. Fair !alue hedsingThe changes in the fair value ofqualified deriratives Forisions for hedging ofthe fair value arc rccognized in tie income statemenl this\r,ith anl change in lhe fair value related to the risli ofthe covered as,sa or liabili$..
The efGctive changes in the fair Ialue of retum tsansfers contracts and the rclated hedged items are added to the net retum and effecriYechanges in the fair value ofthe future currenc) con$acts are added to nel income Aom financial assets al fair value through profit and loss.Ioefficienq in ali of the conEacts emd the rclated hedged items mentioned in the previous pamgraph are added to the net income liomfinancial asses at fair value ttuough profit and loss.
lfrhe hedging is no longer follo$ing the hedSing accounting proc€dures. the modificatiofl added ro the book talue ofthe hedged itemsrecorded b] the amofiized cost method this is through charging it against the profits ard loss€s along the l-ear till its maruri!. Amendmenlsin hedged equil. instrument's book \alue remain within the sharcholders' equir-!-, till it has been excluded.F.2. Cash flows hedgitrsThe effective pafl itr the changes in the fair value ofthe qualified derivative prolision lo hedge the c€sh floNs is recognized as shareholders'equiq. while the profit and losses rclated to the ineffectiYe pan ale recognized imrnediatel) as (net income from financial assets at fairvalue throuet profit and loss) in the income statement.
The amounts accumularcd in the shareholders' equi!' are trarsferred to drc income stalement in the same period that the hedged item has
an effect on profits and losses. profits and losses related to the effective part ofthe currency trdrsfers and options are added to the netfinancial assets at fair value through p.ofit and loss item.
$llen the hedging hstrulent is being due or sold- or ${leo tbe hedging is no lon_eer follo[ing the hedging accounting procedwes. theprofits urd losses accumulared in the shareholders' equi$ in thar time remain \rithin the shareholden' equiS' item and it is recoenized inthe inc-ome staEmeot ir.hen the expectsd transaction is finally recognized But if the expected transaction is no longer eripected to occurthen the profiB ard losses accumulated in the shaEholders' equity arc immediately transfened to the income staJement.
F3. flnoualified derh'ativc of hedsitrs rccouotitrsChanges in the fair value ofthe unquatified derivatives ofhedging accormting are being recognized in the (net income from luuncial assers
al fair valne tkough profit and loss) item. ln the income statemeDl lhe profits aDd losses resulted fiom the changes in the fair value isrecognized as (net iDcome ofclassified finarcial insnnnerts valued by the fair value ofprofits and losses). this is ttrough $e prcfils ardlosses resulted fiom the changgd in the fair value of derivatives matr€ed in rglation to the classified assets and liabilities at fair valuethrougir prcfits and losses.
G. Recoqnizins first dav's defcrred prolits ahd lo63es:Regarding the tools thar evaluate fie Air value, dle traisaction price is considered lo be the best instmment to evaluale the fair value on thetr-ansaction daJe(fat value of delivsred or received rctum) unless lhe fair value ofthe insrn-nnent oo thar dare is iDdicaled depending on thetransaction's price in published msrket or using evaluation modules. When the bank has a long term Eansaction. its fair value is specifiedushg evaluation modules thal their inputs may not all be Aom the published markgt rates or prices. those financial instnments arcrecognized according to tansaction price r4tich is the best indication ofthe fair value. Although the value calculated ftom evaluationmodules may be differcflt and dle diffeEnce betweer the tansactiol price and the arnormt resBlted from the module is not immedialel)'recogniz:ed as first dal's profits ard losles and il is listed as other assers in the case ofloss. and as other liabilities in the case ofp.ofit. Thetiming oflecggnizing the defered profit and loss is specified s€pararely for each cas€ thrcugh its amonization orl the ftnsactior! or $'henit is possible to identi, the instrument's fair value using published marker's itrputs or by apEoving it when adjusting the ransactions. theinst umenls is measuEd bv th€ fair value, the subsequent changes in lhe faii va.lue arc immediately recopnized in tte income statemmt.
H. lnterest Income and ExpenselDterest income md expense for all interesl-bearing financial instrumeds, except for tbose classified as financial assets designated at fairlalue through profit or loss. are rEcognized within'interest income' and'intercst e)ipense' in tlle income sralement using the effectiveinteresl method The effective interest Berhod is a method ofcalculating the amoniz€d cost ofa financial asset or a firancial liability andof a.llocating the iDterest iocome or irterest expeDse oL€r the r€levaDt year. The effective intercst rale is tie rate that exactly discountsestimated futllre cash palments o. recripts through the expected life ofthe financial insEument or, utrcn appropriala a shoner ).ear to thenet carying amoufi ofthe financial asset or financial liability. When calculaling the effective interesl rale. the Banli estimates cash flo$,sconsidering ail conuactual terms ofthe fnancial insmfftent (for exaople. prepayment optiom) but does nor corcid€r future crodit iosses.
The calculation includes atl fees and poin6 paid or received betwee[ parties to th€ contact thar ar9 an integra.l part ofthe effective interesl
mte. transacdon costs and alt other premiums or discoutrls. Inlerest income oo loans L recognized on accrual basis except for lhe interestincome on non-perfoming loans, Efiich ceases lo be rccognized as revenue l'hen dle recovery ofinterest or priociple is in doubt and are
ralher recorded offbslance sheet as follows:
When it is collected and this is after redeeming all dues of consumer loatrs and persormel mortga€es also small loans for economicactivities.For corporale loans- i erest inc:ome is recognized on a cash-basis after the bar* coll€fis 25 % ofthe Escheduled instalments and ivhen
these installmefis continue to be paid for al least o.e ),ear. If a loan cotrtinues to be performing thereaffer- interest sccrued on the
l5
HOUSING .AI{D DEVILOPMENT BA}KIOTES TO TTIE CO\SOLIDITED }'L\-'-{NCI.\L STATEITE\TSFOR THE PERIOD E\-DED 3t Deceiibcr 201 9
principal tben oustanding starts to be recolnized in rer.enues. Inrerest drar is trritten of prior to the dare q{len r}re loan becomesperforming is not recognized in profit or loss except wien the total balmce ofloarl prior to that da&- is paid in full.
l. Fces aod CommisrioEsFees charged for sen icing a loan or facilil. are recognizd as revenue as the se^.ice is provided. Fees and commissions on non-p€rformingor impaired loaas or receivables cease to be rccolnized as income and are ralher reco.ded offbalance sheet. These are recognized as revenue- on the cash basis - onl) \ 'hen inter€st income on those fees and oommissions that are ao inteeral pan ofthe effective interest rate ofafinancial asset are trealed as ad-iusmlent to the effective i erest rate ofthal fiDancial assa,
Commitment fees received b-," the baDli lo originate a loan are defered if ir is pobable thal the bufi rvill enrer into a specific lendingarangemenl and are reg3rd€d as a compensalion for an ongoing involvglent \ ith lhe acquisition ofrhe financial instrument ard recognizedas an adjustmenl to the effective intergst rate. If the commitmenr ex?ires \yithom the bank m8liing the loan- the fees are recognized as
revenue on expia -
Fees relared to debl instruments which are measured d fair value are recogoized utrder revenue at initial recogaitiol. The fees for promotionofjoint loans are recognized within revenues upon completing tle pmmotioa proces uithod retaining an) parr ofdre loan $ the banli orifthe banli naintains a part thereof$'ith the actual intere$ rare availabte to orher participaots,
Fees and commissions thal ar€ eamed on negotiating or pdticipating in the negotiation ofa traNaction in favor ofanother entilv- such as
arrangements for the allotment of shares or another financial instrument or acquisition or sale ofan enterprise on belElf of a clifiL arereco8rrized as revenue \r'hen the transaction has been completed. Admhist alive consultations and other senic€ fees are usuall)' recognizedas rel,enue oo a $raight-line basis over the year in which the sen ice is rcndered- Fees Eom financial planning management and custodiansen ices provided to clie.ts over long )ear arc usually recognized as revenue on a straighFline basis over the year in which these sen icesare rendered.
J. DividcdsDividends are recogoized in the income statement when the bar ('s dght to receive pa).ment is established-
K. Purthase & Resalc Agreemc s..pd Rcsale & Purchrs. AsrcementsFinancial instrumenB sold under repurchase agreements arc not derecognized from the book. Thes€ are sholm in the arsets side as anaddition lo th€ -treasury trills ard other govemDental notes" line item in the balance sheet. On the other hand- the bar i's obligaJion a singfrom financial instruments acquired under resale agreements is shov,n as a deductiofl from the *treasury bills and o8ter govemmertal notes"Iine item in the balance sheet. Differeoces befween the selling and rEpurcha-se pdce or bet$€en the purchase and resale price is recogflizedas interest e\pense or income throughout the year ofagreemens using dre effective interest rate method.
L. Imprirmcnt of Firatrcial AssetrThe bank assembles debt iD-sumeots iD groups with siEilar credit risks bas€d on: the D?e ofthe banking product as per tlte retail Eoduclthe clie s as per the corporat€ loam, and tte rEcognized credit agenry's classifications as per the balances a banks and sovereign debt.The bank classifies debt itrstuments into thrce phases based on the quantitively and qualitative criteria Fovided in the (Central Banli ofEeypt) CBE s instructions issued on Feb. 26, 2019.
The bank estimales. on the dat€ offioarcial staleme s, the provision ofthe fiDancial instrurnenfs impairment losses for al a value thal ise4ual to the exp€cted cr€dit losses (ECLS) for the liGtime ofthe financial instrumen! except for the debt insltuments $ith low credit riskor otherwise debt instruments i{hose 6edit risk did oot significantly increase, at the financial position dale. sinc€ the initial recoelition.The bank consi<ien ECLS to be a potential \r,eighted estimation ofECLs, Etfch arc eslimated as follows:
ECLS are estimated in the firs1 phase by calcularing the curent value oflhe total cash deficit calculared based on tlle historic probability ofdefault rates as amended by the e+ectations ofmacto-economic sceoarios' average lhal \r,ould be lhe rales ofeconomic go\th, inJlalionand uneBplolment for twelve months as per the debt insmments in the first phase or dle lifetime ofthe asset as per the second phase.
As per tie credit-impaircd debt irstuoeots (third phase). ECLS are calculaM based on rhe difference bet$reer the asset's total book balanceard the cureot value ofthe futurc e\pected cash flo$s,
Commitments Elared to loaDs and finaflcial guaraotess are coDsidered as among the default value when calculated-ECLS are calculated for thg contracls of financial guarantees based on the differ€nce between the payrie s ex?ected to be paid to the
-euarantee holder iess arlr other amourts lhat the Bank expeqs to rcdeem.
The bank shall not mo\,e the firancial asset from the second phas€ to the first phase unless all the qualtitive and qualitaiive elements of thefirst phase are mer.
I6
HOLISING .ci\^D DEVELOPMENT B.{\-K\OTES TO TIIE CONSOLIDATED FI\.,{I{CI.{L ST.{TEIIE\'TSFOR THE PERIOD E\DED 3l December20l9
Finsncisl a.sets st f&ir v.lue thruugt the oth.r coDprchcDsivc iocomcFinancia.l assets are measured a! fair Yalue througtr rhe odrer comprehensive income. utether tl€\' \*-erE listed on the Stock Eschange wilhinactive transactions or Dot listed b! determining ttle fair value thrcugh one ofthe accepted lechoical oethods for determining the fairl'alue. However. in case ofrbl being able ro determine the fair value ofsuch socks through a reliable method- thel should be measured ar
replacement cost.
-41 the dale ofeach financial position- the ralue ofthe debl instruments' ECL5 are estimaled b) the bai[i and recolrxized in the starcmenl olprofits and losrs. whe.Eas the rest of differences like the change in the fair ralue are recognized in the other comprehensire income. [ncase the value rises. il should be e,.ipressed in the stalemefi ofplofits atrd losses to the exlent ofll{ral x'as previousll charged during pretiousfuuncial periods. prcvided thar any increo-se should be rccoenized in value in the olher comprehensive income. As per the equi$instrumenrs. all change differences are recognized ar fair value in th€ other comprehensive fucome lill the assd is disposed. and in suchcase. all those differences are carried to the retained eamings.
M. GoodwillGoodwill (Positive- Negative) representing in the amounts resulted from the ac4uisition of subsidiaries companies and has beencalculated based on the difference between the cost of acquisition and the fair value ofthe net ass€ts ofthe acquiree al theacquisition date.The positive goodwill is recogniud at cost mLrus any losses Esulted from rhe impairnefi in the valtre ofgoods,ill while thenegatire goodwill is recognized directly in profit and loss.
li._E@!_s[.!&c$!s ]rqiectsThe cost of work under consfudions includes lhe cost of allocated lands for housing projects, frc cost of tie constructions thereirL theborro*ing costs thar arc capitalizd during the borowing period until rclat€d rvodi is finisM and atl Elated oipsnses as works uderconstructions arc considered one ofth€ qualified assets to be chareed with the boEo\a,ing coss $'hich should be no more capitalized for theprojects that ils col€ actiyities ne€ded to make it rea4' for iE ideDtified puposes or for elling it to other.
Finished housing ulits arE evaluated at lower ofthe cost or fair valuq the fair ! alue is evatuared in the light ofdetailed studies. In case
the fair value is less thar the cos! the difference is charged to reduce'profits ofhousing projects' ilem in the income statement. In cas€
ofan increase in the fair value, such increase shall be credited to the income stalement to the ex:tent previously charged to the incomestalement.The cost and selting price ofhousing unis in some distinguished projects are calculated according to the priyileges io locarion and areafor each unit t\ith no effect on the project's total cost.
O. lDvestments oroDertvlnvestments property is represented in laod & Buildings o*ned by the bank for gain rental revenuss or capital appreciation. Therefore itdoesn't include rcal-estale assets used in the baoli's operations or which was receivod in settlerEent ofthe bank's liabilit!. lnvestment is
accounted b) the same method applied for fixed assets in 14t ch investmenrs properry- arc recorded at historical cost and depreciated usingstrai8fit line mefiod using apprcpriate deprecialion rate and recoenizing impairment loss ifneeded
P. Intangible AssetsP.l. CoEputer prosraEsExpenses related to improvement & mai.tenece of computer programs aIe recognized as elipeDses in income statement when incured.Recognized as atr i[taigible asser er?enses ielared dLectly with defnire progmms and uoder fie ba.Ii control & expected to generate
economic benehts u,hich e\ceed its cost for morc thar one )€ar. Direct expenses includes labor cost in the program improvement team inaddition to appropriate average ofrelded general eryrcnses and it is rccognized as an iEp.ovement cost in the e{,enses that leads to an
increased eripansion or performance oflhe computer plogrmr morc than its original standards. it is added to rhe program cost.
Computer proerans' cosr which are recognized as an 4sset are amo ized over its life time ofnot more than 4 -!"ea.rs.
Pl. Other iltrpqibL rssetrRepEsented in the intargible assets other than goodwill and compuer programs for example (tademark- licerse, and rental contractsbenefits).
Other intangible assets are recoded by acquisition cost and is amortized by staight line method or lte economic benefis expected, alongits estimated useful life. Considering assets *,ith no definite useful life. they are rot amortized but its irnpairment loss is ),early.' examinedand recorded (iffound) in the hcome statement
O. Fired AssetsLand and buildings comp se mainly branches and omc€s. All fixed assets are caried aIhistodcal cost net ofaccumulaled depreciation andimpairment losses. Historical cost includes expendirues ttBr are directly attributable to the acquisitior ofthe items.
t7
HOL]SING -A,ND DE\TLOPMENT B-A]iK\OTES TO THE CO\-SOLID-{1ED Fft.{\CI.{L STATE}IE\-TSFORTHE PERTOD E\-DED 3l December 2019
Subsequent costs ae included in tlle asset's cam,ing anount or rEcognized rparatell'. as appropriate. onl) uten it is probable thar futureeconomic berEfits associded $ith the item will flo*- to the Bek and lhe co$ ofrhe item caIl be meassed rcliabl!'. .All other repairs aDd
mai enance e4ellses are recognized in profit or loss withitr" other ope.atitrg expenses" during tlte financial year in $fiich lhe\ ale incured.
Deprecialior is charged so as to write offthe cost of assets, other thaD land which is not depreciated. over theft estimaled useful li1es. usingthe staighl-line method to the e$ent oftheir estimaEd rcsidual values based on the following annual rales:
Re-cstablishing e\penses related to the renled branches are ainortized tlTough the estimated production iife or the lear of the renrcontl acts u,hichever less-
Facililies and installments ale depreciated over 3 year's year.The assets' residual values and useful liles arc reliewed- and adjusted ifappropriate. at each balance sheet dale. Assels that are subjeclto depreciatioo are reviewed for impairment whenever evenB or changes in circumstances indicate thal the can-\'ing amount ma) nol be
rccoverat le. An asset's carn ing amount is uritten down immediaIel) to its recoyerable anount ifthe asset's cafi]in8 amount is greaterthan its estimated recorerable amount. The r€coverable amorml is the highsr oftte asset's fair value less costs to sell and value in use.The remvemble amoml ofan asset is the higher ofthe assefs net realizable value or lalue in use. Gains and losses on disposals aredetermined b-'" comparing proceeds \ ith relevant carrying amount- These &e included in profit or loss in other operaling income(expenses) in the inc:otrle $aement.
R, Noo-Finarci8l -A,sset ImpairpctrtAssets Nithout definite u-seful life are nol amortized & the.v are being tested emually for impairmenl Asscts are tested fo. impaiment\\.henever events or circEnstances indicated thd &e book value may not be recoverable.
Then the impairE€nt loss is recognized & and the carrying arnourlr of an asset is reduc€d to the exle that such carq ing amount exceeds
recovemble amount. The recoverable amount represents the higher ofthe asset's net selling value or value in use. ln o.der to estimale theimpairment. asser is joined lo smallest possible cash gencrating unir.
Non-financial assea with impairment are being reviewed to assess \,rtether or not all or part of such impairmenr loss should be reversed
througb profit alld loss.
S. RentllPalments ale reco.ded in operatiry rent accomr after deducting any discouots Ec€ived from the lesser in the expen-ses in the incomeslarement according to stmight line rnelhod \r,ithin the contract 1.ear.
L@Lg!!!.,]EaSt ESclyaleltsFor tlre purposes of the cash flo\. statemsnl cash ar ca5h equivalents comprise balances *ith less tha! lbEe moirlhs' maturity Aom thedate ofacquisition: they include cash and balajrces due Aom centsal baii ofEglpt-other than those within the mandatoD. reser\c. curentaccounts $'ith banks and financial assets other than fair lalue througlt pmfit and loss.
l"I. ProvisiousProvisions for restmcturing costs and legal claims are recognized u,tren the Bank has a present legal or consmrctive obligaion as a result
ofpast events. it is more likely than not that an outflow ofresources will be requiEd to settle the obligation and the amouflt has been reliabl,vestimated
where therc are a nurber ofsimilar obligations. the likelihood thar an outflorv $ill be required in settlement is detemined b1' mnsideringthe class ofobligations as a rvhole.
A provision is recqaized eveo if the likelihood ofan outflo$, \rirh rcspect to any one item included in the same class of obligations is
remote. rllrn a provision is Btloll)' or partially no longer requirEd i1 shall be reversed through profit and loss under other operating income( exp€nse). An appropriare ifferest rate is used to measue the prEs€nt i'alue of liabilfties' palments that are determined to be settled a.fter
one year 61]m balance sheet dzte. This interesl late is not affe'cted by tre ta\es' rates virich rcflect the cash time value alld ifit's due in less
tha! a ].ar esrimaled vaiue ofthe liabilit, is calculated and ifit has an important effect it's recoEnized by the Fesent ralue.
li
HOT.SPiC .{\'D DEVELOPMENT B.{NK\OTES TO TIIE CO\SOLID.{TED }-L\_..{"iCIAL ST.{TEII'E\"TSFOR TIIE PERIOD ENDED 3l December 201 9
\'. Firaocial coll cial contractsFinancia.l colla&ral contract is the contrafl issued b] the bank to cotlateral loans or debit culient accour*s plesen(ed Io ils customeE fromother parties aDd it is required Aom the barL to pa) c€rtain palmeDts to compensate the beneficiaries ofcarried loss because debit pa)mentin the due dare according to the debl insrument's conditions, These fmancial collarerals are presented to banks. financial irstitutions andother parties on behalfofthe bank's cuslomers-
Initial recognition in the financial stalements is Ecorded t!}'the fair value al the date ofgranting the collate.al $hich ma) refled thecollateral fees. Later on. the b6 i's liabilitl is measued b! the virtue ofihe c.llaleral on the basis ofthe initial recoenition amount lessthe amortization m recognize the collateral fees ir the income statemenl by the straight line method over the collderal lifetime- or thebest estimation offie needed pa;ments to adjust anl financial liabililv resulted from the financial collaterals on the balance sheet date$.hich is higher. These estimations ale specified accoding to the experience in similar transactions and historical losses and also b] themanagement's judgrnanl ADy inctcase in the liabilities resulted fiom financial collaterals. is re.tgnized in the income statemem as
other operating revenues ( e-'penses).
\\'. EmDlo\ees Bcnefits!V.1, Pensior LiabilitiesThe banli is committed to pa],the contribulions to the Socia.l Insurance Public Authorit)'. $ith no other liabilities afier paying these
cont butions. Those contributions are rccorded yearl.v in the income statement in its matudtv )ear and arc Iisled as labor benefits.
The bank has insuranc€ fund for the emplo],e€s ofthe banl, which \r,as founded in 1987 Worting according to lalr'no, 54 for year 1975
and its executive reeulations. in the purpose of granting compensation and insurance benefits for lhe members. this pension fund and itsamendments are implemented on all ofthe employees ofthe bank's head ofEc€ and its branches.
The bank is committed ro pay the annual and monthly subscriptioa to the fund ac'cording to the funds reeulation and its amendmenls. Noolher liabiliries on the bank after tk palment ofthe subscriptioo. Thos€ subsqiptions are recognized as administrative e\penses \\,h€n the.rcome dug. The prepaid subsctiptiom are rccognized as asseB to the limit that lhe deposit leads to rgduce the futurc palments or lo a refimd.
\\'-2. Retirement l,iahilitiesThe banli has applied a specified medical system for its employees and the rEtired ones. According to the above mentioned $'stem. thebank's liabilities are repres€nted iD the differencE betwe€n both the present value ofliabilities in the balance sheet dale aDd the present value
of its asses including settlements resulted from actuadal profit4oss d also the cost ofprevious sen'ice. Those liabilities are determinedannuall) b)' independent actuarial expen using the *estimated added unit approach" and are determircd lll-rough es{imaled future out cash
flo\r appll'ing interest rates on bonds \r ith maturities similar to rhat ofrhe liabilities itr -othe. liabilities- item.
Actuarial profit/loss resulted from settlements together with amendments in the medical s).stem are charged to the income stalemeot if it'snot more than 100,6 ofthe value ofthe asset or l07o ofthe defined benefits liabiliries- rtrichever is higher and in case profiE ( losses) is morerhan the percentage. the incremenl is added { deducted) to dle income stalement o\.er $;hal's left toE the $,oridng years,
The cost of the previously mentioned service is charged dircctly to the iocome statement as (geneml & administrative expense) unless
changes that ha\e been made on the policies stare that worker should stay for a specified year, in this case the cost ofthe s€rvice is amortizedusing straight-line method.
WJ. Shere based parEc]ltsThe bonk operates an equiq-se$led sharc-based compensalion plan. The fair value ofthe emplo]'ees sen'ic€s receiYed in exchange for thegranr ofthe options is recoCrized as ar expense. The total aEount to be expensed over lhe vesting year is detemined by reference to thefail value ofthe options granted excluding the impact ofany non-ma*et vesting conditions (for example. profitabilitv targets). Non-ma*etvesting conditions are included h assumptions about the number ofoptions that are expected to become exercisable. At e3ch balanc€ sheet
date. the entit-v revises its estimated numbsr ofoptiois that arc expected to become exercisable. It recogrizes the impact ofthe reyision oforiginal esrimates- if any- in tlE income statement and a corespondiog adjusttlent ro equity over the .emainin8 ve5ting )ear.
The proceeds received net of atry directly anributable rEnsaction costs aIe caedited to share capital (nominal value) aod sharc preEium\\'hen the options arc exercised.
l9
HOTTSII{G .4]\'D DE\TLOPMENT B-A]iK\OTES TO TIIE CO\SOLIDATED FDi-$,iClAt. STATEIIIENTSFOR THE PERIOD ENDED 3l Ixcember 2019
\. lncomf T4tieslncome ta\ expense on the year's proft or loss includes the sum of the tai curentlrv pa),able and deferred ta\ and is recoenized in theincome stalement except u'hen the) rclate to items that ae recolnized dircctl) in equiB. in *tich case lhe t&\ is also recoenized in equilr.
lncome mx is reco€nized based on net taable profit using the ta rates applicable at the dare ofthe budger in addirion to tar adjustmenrsfor prer ious I ears.
Deferred taries is Ecoenized on temporq' differences between the caqins amounts ofassets and liabilities in the lmarcial statemeots and
the conesponding ta)i bases used in $e compuration oftoeble prc6t-Defened tajr assels and liabilities are measured af the tax rales that arc expeded fo appl) in the ],ear in rNhich the liabilia.r is settled or theasset realized- based on taJi rates (and la)i lai{s) thar have b€en enacted or substantivel.v- enacted b! the end ofrhe reportin-e }ear. Defen€dta\ assets are generally recognized for all deductible tempolar,v differences to the exlent thal it is probable that ta\able p.ofits will be
aYailable against u,lrich those deductible tempora4' differences can be utilized. The carr-ving amout ofdefened tai assets is revie$,sd at
the end ofeach repofling year and reduced to the e\1eDl dtal il is no longsr pmbable thar sufficient taxable profits $'ill be ai.ailable to allo\r'all or pan ofthe asset to be recovered. However. when it is expecled thd fi€ ta\ ben€fit will hcrease. the cerling amount ofdefered taJi
assets shall increase to the e{ent ofEevious rcductio[
l. Borro\r ingLoans obtained b]'the bar i are initially recognized at fail value net oftran^saction costs incrrred in connection with obtaining the loan.Borrowings are subsequentll' measEed at amonized cDs! ra,ith the diffe.Ence between net proceeds and the value lo be paid over the
borro*ing 1'ear- recognized in proirt or loss using tle efective intercsl.ale method.
Z Capit.lzl. Cost of capitalThe issuarce expenses that are .elated directl], with issuing new shares or shares ofacquiring entity o. issuarce options. are presented as a
deduction &om shareholders' equitv and the net reveoues after tax.
22. Dh'idcndsDividends are.ecognized when the gsi€ral ass€mbly ofshareholders appmves rhem. Dividends include the emplo).ees' profit share and theboard ofdirecton' remuneration as prescriM bv the baDk's afiiclgs ofassociation and the corporale law.
,{A. Trust ActivitiesTrust activities arc the assets' opposition and managing for individuals and funds. Its values and profits are not recognized in the banli'sfinancial staten€ots because they are nol o$red b:i the bar*.
{B. ComDrrrthe Fisur6Comparative figures are reclassified- \ fiere necessar)- to conform qith changes in the curent year's presentation
J. \Ianagement of Financial Risk
The banlL as a resutt of conductiog its activities, is exposed lo various finaocial risks. Sioce financial activities are based on the concept ofaccepting risks drd analysing and maraging individual risks or group ofdsks together, dle bank aims at achieving a well-balanced risks andrelevant r€wards. as applopriale and to rEduce the probable adverse effecls oD the bdi's fimrcial performance. The most imponant qpes ofrisks are credit risk market risli liquidity risk and other operating risk. The market risk comprises foreign currenc!' risk. interest rale risk andother pricing risks.
The dsk management policies have been laid down to delermioe aod amlyses the sks, set lirDits to the risks and mnrrol then ttlIouEh reliablemerhods and ug{o-dale $Flems. The baoli regularly reviews the risk Eanagement policies and rystems and alreodtrlenls lhereto. so that the}'reflect the changes in Darkets, products 6!d se ices and the besl up-to-dare alDlicadons.Risks are managed in accordance uith Feapprcved policies by the board of dfueclors. The risk managemEnl departrtrJnt identifies, evaluales
and clvers finarcial risk. in close collaboration trith ft€ bank's l'arious opeiatiDg units. The board ofdirectors proYides written ntles whichcover cenain risk areas. such as credit risk, foreign exciange risk intgrest rate risk and lhe use ofderivalive and non-derivative finaocialinstruments. Moreover. the risk depamrent is responsible for the lear r€view of risk man€ement and ths cutrol gnvlonrnent
independentl].
{ Crcdit RiskThe banli is exposed to the credit risk *hich is the risk rcsulting ftom failure ofthe client to meet its contractual obligalions 1o$'ards the
Banli The credit risk is consider€d to be the most significant risk for the bank therefore requiring careful manageme[L The credit riskmanifests itself in the lending activities and debt instruments in bek's assets as well as oll balance sheet financial instruments- such as
loans @mmitments. The fiedir risk managemeDt and contIol are centralized in a credit risk manageme leam in Bar i Risk man€enentdepartment and Eported to the Board ofDirectors and head ofeach business rmit regularly.
20
HOL]SI\G ,,LT{D DEVELOPMENT B.A.]{N\OTES TO THE CO\SOLIDATED F[I{.{\CL{L ST{TEME!{TSFOR TIII PERIOD E\DED 3l December 2019
{.1. Messurins thc CrEdit Riskl,oans ard facilitics to hsrks rod cliertsln measuring credit risL ofloan and advances to customers and to banli-s d a counterpartv level. the Banft's mting s)ste[o is based on threekel pillas:
The'probabili! ofdefault' b) fie clisnt or colmterparD on its contactual obligarions,Current exposues to the counrerparB and i1s likely futurc developmenl fiom *hich the bank derive the (erposure at default).
These credit risli measurements. r'hich reflect evected loss .The operational msasurements can be co msted u ith impairmenl allo$,ancesrequired under EAS and in accordance $ith the Cenf.dl Bank ofE$/pt's iostructions approved b!'the board ofdirectors on l6 December:008- *hich arc based on losses that have been incurred a! the balance sheet dara (the 'incured loss model') rather than e\pected losses.
The bar i a-siseses the probabilit-v of default of individual counterparties using iffemal rating rools tailored lo the larious caregories ofcounterpan). The) have been develop€d intemalll md combine statistical anab,sis lr,i$ credit officerjudemenl to reach the relevaDt credilrating basis, Clients ofthe Bank are segmerted into four rating classes. The bE*'s rating scale. utrich is shown belo*. reflects the rangeofdefault protrabilities dehned for each rating class. This means that. in principle. o.posurEs migrate between classes as the assessmenl oftheir probabilit-v ofdefault changes. The rating tools arc kspt under review and upgraded as necessa4,. The Banli regula y validates theperformance ofthe rathg and rheir predictive power with rcgard to default events.
Bank's internalr3tings scale
&!B:9-84!!g DcscriptioB of thc qrrdcI C,ood debts2 Normal u"tchlist3 Special warch-list4 N-on-performing loans
The position exposed to defauh dspends on tbe aDourfs thal the Bank expects to be outstanding wheD dela-"- occurs. For inslance- for theloanr the position would be rlE oominal value: for coomitments, the Ba[k includes all $e aloou s alread_v wilhdrawu in addition to theother amounts that are expected to be wirhdra*n till trle date ofdelay. ifan),.Presumptive loss rePresens tlte B@k's expectations ofthe amoml of loss wh€n dre debt is claimed in case ofdelay. This is e)'pressed b!the loss perce[tage in tlle debl x,trich cetufu y dif€rs according ro the q?e ofdebtor, the priorirr" ofclain and the availabiliB ofluarantees or olher clEdh coverage means.
Debt Instrume!!lsAs per debt instuments. the bank uses e$emal classifications or any equi!,alent in credit risk' management. Howeve.. ifsuchevalualions are not available- similar methods are used to the ones applied to credit clients, Such investsnents in securities arE considered ameans to obtain a better cr€dft qualitv and at the sane time it provides an available source for meeting the financing requireme s.
A2. Risk limit control rdd mitisatiotr BoliciesThe banli manages. limits a.d contols ooncentsations ofcredit risk wherever they ae identrfied - in particular. to individual counterpartiesand bants. and lo indus-rries and countries.
The Bank structures the levels ofcredit risk it undertalies by placing limits on the amount ofrisk accepted in relation to one bo.rower. or
!troups ofborro*ers, and to geographical and industry segmefis. Such risk are monitored on a revolving basis and subject Io ar amual ormoie frequent lel'ie*, lrfien crnsidered necessary. Limits on the level of credit risk b], individuaJ. counterpanies. producl and indushysector and by country are approved quanerl), by the Board ofDirectors. The eryosue to any one borower including banks ard brokers is
firdier restricted b]' suUlimits covering on- and off-balance sheet exposures. atrd daily deliverv risk limits in relalion to tradirg hems suchas fonvard foreign erchange conrads. Adual eryosues against limits are Donitored quanerly.
Exposure to credit risk is also managed through regul& anallsis of the abiliB. of borrolers and pore ial bonowers to meet intercst andcapital repayment obligations and by changing rhese lending limits $trere apgopriue.
HOI-ISIIiG .4I\-D DEVELOPMENT B.TIiiK\OTES TO TIIE CO\SOLID.{TED }'I\--.T\CA{L STATETILI{TSFOR TI{E PERIOD E:{DED 3l December 2019
Sottrc other spccific coDtrol abd mitigation me.surcs sre outliDed b.lo*:CollateralrThe banli emplo),s a range ofpolicies and practices to mitigate ciedit risL The most traditional of thes€ is the taliing of secu.ig for fundsadvances- $hich is commotr practice. The bank implements guidelines on the accepabiliq of specific classes of mllaleral or credil rislmitigation- The principal collateral tlpes for loans and advances are:
Mongages over resideatia.l propenies.Mongage business assets such as prcmises. inventory and accounts rec€iyahle.Mortgage financial instrumens such as dehl securities and equities.Longer-term finance and lending to corporale entities arc generall) secured: revolting indilidual credil facilities are generalh unsecured.In addition. in order to minimize the credh loss the bank will seek additional collareral from the counterpail-1 as soon as impairmenrindicalors are noticed for the relevant individual loans and adYances.
Collat€ral held as securir]- for financial assets other than loals and advances is determined bl the narue ofthe instnunent. Debt secu ties.treasuq and other -eovemnental securities are generally unsecued \ jth the exception ofasset-backed securities aod similar insttuments"$hich arc secured b)' portfolios offinancial instrumenls.
Derh'atil.esThe banli maintains stricl control limits on net open derivative positiom (i.e-, the difference bet$'een puchase and sale contmcrs). b). bothamount and term- At an) o$e time- the amount subject to credit risk is limited to the c'urrcnt fair value ofinstruments that are favorable tothe banli (i.e.. assets $,here their fair value is positive). $hich in relation to dsriYatives is only a small &action ofthe coffacl or negotiableralues used ro express the volume ofinstrumenls outstaoding. This credit risk exposue is marEged as part ofthe ovemll lending Iimits uithcustomers. together $ith potential e\posures from market movetnents. Collateral or other s€curiq is nor usually obtained for credit riske\posures on these instruments, except where the bank requires margin deposits from counterparties.
Settlement risk arises in anl' situation yhere a payment in calll secuities or equities is made in the expeclalion ofa corresponding receiptin castl securities or equities. Daily settlement limits are established for each counterpaft,v lo cover the aggregare of all settlement riskarising &om the Bank market fansactions on any single day.
ComEitments Rclated to CrEditThe prioary purpor ofthese iflstsumeots is lo ensure that funds a.e available to a customer as requfed. Collaterals and standbl" Ietter ofcredit canl' the same credit risk as loans. Documentary and comm€rcial lette.s of qedit - qbjch are urftren undertaldnss bt the Bank onbehalfofa customer authorizing a third part)' to dra* &afu on the Bank rp to a stipulated anount under slecific terms and conditions -are collateralized b]'rhe unde ),iDg shipmeDts of goods to which lbey relare ard therefore carry lsss risk than a direct loan,
Commitmems to e{end cledit represent unused portions of au0D.izadons to e\1end credit in the form of loans. collalerals or letters ofcredit. With respecr to credil risk on commitments to exlend cr€di! the Bank is potentially exposed to loss in an amount equal to the totalunused commitments. Hopeler- the likely amount ofloss is less than the total unus€d commitments as most commitmeDts to e\tend creditare continge upon customers maintaining specific crcdit standards. The Batrk monitors the term to maJuliB- ofcredit coomitments becaus€loneer-term commitmefis generally have a greater degree of oedit risk than sho.ter{erm commituents.
.\.3. lmDai!luent and Provisions PolicieiPolicies The intemal radng systems previously described focus more on credit-quality mapping from the inceptioD of dre lending and
investmeol activities. ln contast impairment provisions ar9 recogdzed for fi:rancia.l reporting purposes onl-"" for losses thal have been
incured at the balaDce sheet dale based on objective evidence of impairment due ro the different methodologies applied- the amount ofincured credit losses prcvided for in the finarcial statemertts are urually lou,er than the amount determined Aom the erpected loss modelthat is used for intemal operational management and Central Bank of Eg."r?t's rcgulation purposes.
The impainne.t provision shoun in the balance sheet at the period is derived fiom each ofrhe three inremal rating grades. Horvever. themajoriry ofthe impairment proyision comes from the bonoB two grads.
The table belo\r shoqs rhe percentage offhe banli's in balarce sheet items relating to loans and advanc€s and the associated impairmeftprovision lor each ofrhe bal i's intemal raling categories:
lmprirmetrt losscsprovisioo o/o
42o/o
450/.
Stage ISla3e lStage 3
Loans andfacilities Yo
84%1o/o
99
l00qo
3 t2t20t9Bauk's Rating
HOUSDiG A]iD DE\f LOPMENT B.AI{K\OTES TO THE CO\SOLD.{TED }'L\-.-{\CL{L ST{TEMENTSFOR THE PERIOD E\-DED 3l December 201 9
Loans and facilities includes loans used limit and percentage ofloans agreemeffs. :tccording lo the vohEne of expected used limit i, additionto financial collate.al contracts-
The banli's policl requires the rerie$ ofall lmancial assets thd are above materialig thrEsholds af leasr armuall]., or more regula t whenindividual circumstmces require. lmpairment allolrErces otr fudiYidualb aasessed accounts ale determined b) m evaluation ofthe inculredloss at balance-sheet date on a case-by-case basis. and arc applied to all indilidualll sigrificart accounts, The assessment normall]encompasses collateral held (including le-confrmatior ofits enforceabiliq) artd the anticipaled receipts for that indir idual account.
Impaimenl loss provision is fomed based on homogenous assets usirg the historical experienc€ ofloan loses. available personal j udgrnentofbanli managemenl and statistical methods.
-{..4. Bank Risks Mcasuremcnt Gencral ModelIn addition to the four caregories ofmeasuring credir worthiness &e marragement malies sub-gmups more detailed according to the CentralBar i of Eglpt's rules. Assets facing credit risk are classified to detailed conditio.s rel)'ing ereatlJ on ctlstomer's informariorl acti\ities.finsncial posirion and his regular palmenls ro his debts.
The bark calculales the provisions needed for impairment ofassets exposed to credit risk including commitments relared to the credit based
on special percenrages determined b) Central Bank ofE$?t. ln the case ofincrease ofimpairme loss provision needed according to creditrvorthiness as per Central Banli of Eglpt over the impairment loss for the purpose of preparing the financial stalement according ro theCentral Banli of Egpt approved bl the Board of DL€ctors as on Februar,' 26, l0l9- regading the implementation of IFRS 9- the general
banliing dsk reserve is included in o$ners' equi!' deducted fom the retained earning with this increase- this Eserve is modified on a rqularbasis \\ith the inc.ease and deoease- s,hich equals the incrcase in provisions and this reserve is nol dist ibuted.
And this a.e calegories ofinstitutional wonhhess according to intemal rarings compared u,ith Central Bank of Eg}?t's ralings and rales ofprovisions needed for assets impairment Elaled to credit risk:
Classilicatiop ofthe Ceptrd Bapk
of Est'ptI2
I5
67
8
9t0
Classifi catioo Sisnifrcatrce
I.ow riskAverage Risk
Satisfacrory riskRearcnable Risk s
Acceptable RiskM6rginally Acceptable risk
Watch listSubstandard
DoubtfrrlBod Debt
ReouiredD4C!S!S!
r!!9Zeo
l9!o
lo/o
2o/o
30/.
5%20ph
Str/ot 000./o
Internalclassification
IIIII2
444
lnternal classificationSisnificance
Performing loansPerforming loaBsPerforming loansPerforming loansPerforming loans
Regular walchingWatch list
Non-performing loarsNon-perfonoiog loans
Non-performing loans
23
HOUSING {\D DE\TLOPMENT BA\X\OTES TO TI{E CONSOLID..ITED I.I^-,4J{CL{T ST..1.TE]I{E]\TSFOR TIIE PERJOD EI\DED 3l December 2019
r i \lorimrrm lim its for C it Risk hefore Collrl.rrl.
Itees Erposed to Credit RiskDue from baDksLoans ald facilitics to customersRetail LoallsOlerdrafisCredit cards
Personal I-oans
Real Estate L-oans
Corponte LoaN:Ot€draftsDirect Loans
Syndicated Loans
Specislizrd Loans:Direct Loaos
FiosDcial assets:
Deht lnstnunentsOther assets
Tot&l
Neither past dues nor subject to impairmentPast due but not subject to impaimentIndividuall) subject to impairmentTotal
Irss:lmpairment loss provisionIntercst in suspense
3ltr2Dot9EGP
8388,117,?92
3t/t2/2018EGP
8.1',73-207.691
i43.854.016t9-079.976
1.838-753.8 t I6.386.914.0r 8
3..li r.721_35-3
2.011.819-891
1.034-371-057
533,090.4.10
26-i58.9062.{93J91.0636.851 .971.1 16
J.122.4873562.251.926.1712.665J35.999
517.119.97J
50,190,353,623 .10.05,r.12t.83.1
20r8J,{38,972.452,4r3,779
11.028.726.446
1.564-656.3 t3
Following is the position ofloans and facitities balaDces to fie cl;erfs in terms ofcredh soli'enq-:
3llt2D019EGP
Loans & advancesto customers
r 6.430.826.6901J27,630550L706825.815
3l n 2/2018EGP
l.oans & advancesto clrstomers
10.048.068,1081.7 64-721-979
8'14-743-291r 5-687-i33.378
(2,251.{18,897)
11810J,r92)
(2.027.028-22r )(51f50-753)
_____l:J2iti2J!6 13.609254.401
Loans and facilities impairment reached EGP 413.217,180 compared to ECP 196.995,099 in the compamtive ]ear. Item No. ( l8) lncludesadditional infomation about provision for impaiment losses on foans and facilities to banls ard customers.
The follon itrs t blc shon ine total Loans & Facilitics stases durins the vearl
3l Dccembcr 2019Stsge I Stage 2
12 llotrths LifetiDeStsgc 3l,ifetime Totrl
RetailCorporate
8,706. r88.7647.124.63'7.926
226.586.1621. t01.044.388
972.738.629734.187.186
9.905.513.5059.559.869.500
l 6J30.826,690 rJ27530550 1,706,92sf15 19.r65J83.05s
l-l
{.6. Loans and Facilities
19.165383,055
HOUSI\G .4.\D DE\TLOPMENT BA\K\OTES TO TIIE CONSOLIDATED FA{.T\CL{L STATE\IE\TSFOn TIIE PERJOD E\DED 3l December 2019
The follorr ing table sho$ ing Impairment krss prorision in staqes durins the r ear:
3l December 2019Strge I Stage 2
l2llonrhs Lifetime
RetailCorporate
41.r 86.778903.623.56t
r04.2 r3.585186.333.935
124-211.71159r.839.766
Stage 3Lifetime
Total
1.681 791.2622151..1t8.8979-1J.8t 0339 290.547-520 1.0t6.061.038
The follo\r ins table pror ides information on the qualir\ offinancial assets during the r ear:
Duc from trank!3l Dcc.mber 2019
Stage I Stage 2l2ltlonths Lifetime
Stage 3LifetimeCredit r:rting
8-388.1 I7.792
Total
8.388.r r7.792Good debtsNormal ivatchJistSpecial u atchlistNon-performing loan
Total.{llo$aDce for impairment losses
Total
Finsncial assets at amortized costCredit ratine
Good debtsNormal Batch-listSpecial watchJistNon-performing loan
TotrlAllo$alce for impairDent losses
Total
Good debrsNormal $"tchlistNon-performing loanTotalAllo. atrce for iEpeinDcnt losses
Total
Corrlorate Loa[s & Fa(ilitie!Credit rating
Good debtsNormal $alch-listNon-perfoming loanTot!l-{llouance for impairmatrt losscs
Totsl
8388.1 17.792 8388.117.792
8jtt8.l r 7.791 8-388-117.792
f,l December 2019Stage I Stage 2
12 \tonths Lifetime
r4.558.331.470
Stage 3Lifetime
Total
1J558J31.J70 ll*i58J31,{70(8287.031) (8;87.03.!)
I J_i50.0.r{.{35 1.1550.0Jt.J36
Total
3l December 2019Stage I
l2llonths
8.706,r 88.764
Stage 2Lifetime
Stage 3Lifetime
226.586.r 61
8.706.188.761126.586.162972.738.629
8.706.188.76J 226-586.t62 9'1L138-629 9.90551t*555(J1.186.77q) (10{313*s85) H24221272t ( s69.621 .635 )
122312..\11 518..i173578-665-001 -986
Stage Il2llonths
'1.121.637.926
3l Decemter l0l9Stage 2
LifetimeStage 3
Lifetime
734-187-186
Total
1-l0l-044-3887 ,724.647 .926l.l0l,0-14,388
734.187.1867 -7)4-637 -926(903,623561)
1r0.14.1.388 73d187.186(186J33.935) (591.839.766) i.681,197 2A\
6.821,01,tJ65
2i
914.710..153 112311.120 7.878-072t38
Retail Loans & FacilitiesCredit ratins
______2-3li.8e r .e20
9.559.869.500
HOT'SING -{liD DE\TLOPMENT 8.4,} I(\OTES TO TIIE CO\SOLIDATED I-L\-'.{IiCL{L ST.{TEI-TENTSFOR THE PERJOD E\-DED 3l Decembcr 2019
Loans snd fscilities on.3l December l(ll8:-
Loans and advarces neither past doe nor subjcct to imprirme[tThe credh qualiq ofthe loans and facilities ponfotio thar neither past dues nor subjecl to impairment arc evalualed according10 the intemal evaludion used b] the banli'
3l Decembcr 20lg
Evaruation "*
-.r}**;,Jil*
,":"ffi';i rotel
Rct{ilOverdraffsCredit cardsPersonal loansReal estate loansTotal Retail
CorporateOverdraftsDirect loansSlrdicarion loansTotsl Corporst.Specializcd t strs
Dfuect lransTot{l Lo.ns rnd .{dvsrce! to Clients
6.201557213 6J0l-s57.2t3
-t..u9.515.022 119,922 10J6J.762 3.{50.099.706
386.t1t.189 186.,111.r 89r0.037*583,42.1 r19.922 r 0J5.1.752
r60.08.3.431t7 -546-228
1.231.097.1l94.192.830.435
160.08i-.13117.5t6-:28
t-131.097. I t9.1.792.830.435
2.454.3M.1244.582.30r
990.728.597
I19.922 2-464.788.808.1.582.-101
990-728-597
Loans and advances prst duc but trot subjcct to implirmcrtloans and advances with dues up to 90 dals but are not considered impaired- unless other information is available to indicate the contrar],Clients' loans and advancrs with neither past due nor impairrd
The iair Yaires ofthe collateral relared thereto are rcpresented as follors:
Retail
Past dues up to 30 da),sPasl dues more than 30 da-vs up to 60 dalsPast dues more than 60 da;-s up ro 90 dalsTotal
CorDorate
Past dues up Io 30 da]sPast due mor€ than 30 days up to 60 da],sPast dues Dore than 60 days up to 90 da-ys
Totel
3l Dccemb.r 2018EGP
Personal Loans Real Estate l-oans Total,t41,081.620 727.588.488 I,168Bt t-s6{
234.583 306090,905 306J86,,48114.693 340.379.986 3.10575,636
383.Jr3 J1r,4303% tj7ffi
Overdrafts24t.456
6 t.00080.957
O'r,erdr8fu196
632.513.756166.122.929
Totrlr 58J53,8156,12,090,66{
Di.rct Lo8trs158.353.6199.546.908
t-747 -672-823 l.9l798,666.881 1,915.573Js0 2,11121023r
Specialized Loans
Pasr dues up to 30 daysPast due oore than 30 da)'s up to 60 da)sPast dues mo.e than 60 da)'s up to 90 days
Total 23.t.608.060
Loans and rredit facilities $hich are individualh imDaired
Lorrs and crcdit facilities to customersAt the end of the curr€nt reporting year the carD,ilg amourt of loaDs and credit facilities, thai are assessed to be individualll rnpaireCorcluding any cash flows expested to arise liom rhe associated guaranreex arnouiled to EGP 814-743-291al the end ofthe prior ) ear.
DirectLoaos
70,144.38458,869,653t05.594.023
t6
10.0-18.M8.108
HOT]SING .{'tiD DE\TLOPMENT B.A.NI\\OTES TO THE CO]'SOLID.{TED FI\A\CI,{L STATE}IE\TSFOR THE PERIOD E\DED 3l Decemh€r 2019
The follou'in-e tahle provides a brealidoun of the balance of such loans and credit facilities q'hich are indilidualll impaired including rhe
lair value ofrhe collalerals shall prer ail $'hen calculaling the prorisions:
-11 December f018
Eraluatiolr
RetrilOverdrafrsCredir cardsPersonal loansReal e$are loansTotal Retail
CorporateOverdraffsDirect loansSlndicatioo loans
Total CorporateTotsl Loms and -{dvatrccs to Clients
ll.7t5-704571.170.927 167 -271326
Loens andF.cilities Collatcrals
r83.387.172r.533.748
166.225.803220.024.2M
154-453.582102-M0
168.265.6649't.664-24043.6/.2-460
9.320.95350.211.021
7.750.000
303*s72364871.113.29t
67 28t.97123.t-553300
Restructu.ing Loars and advaaces:Restruc{uring actilities include e*ended pa}ment rangemenB; execute obligalory matragsment proerams. modification ard deferral ofpaJments. Restrucauring policies and practices ale based oo indicalors or criteria lvbictl. in thejudgne oflocal mana€Emenl indicate thatpalment will most likelt continue. These policies arc kept under continuous revig\*'. Res{iucfifing is most commonl}' agplied lo long termloans: in particular cu-stomer frnarc€ loans Renegotialed loans rhar $puld otheNise be pasl due or impaircd totaled al the ofthe financial
1,ear. especialll' customers' funded loans. t ans thal were being renegotiated arnounted EGP 395.001.867.3l December20l8
EGPLosns & adl3[ces to custoltcrsCorDoratc:OverdraftsDirect loansSFdicaJion loafls
Total .395_001-867
221,011315142035{6
159,781,006
.{.7. -{.couisitiotr of collatcr.ls:Assets o*ned througfi possession are classified among other asseb in the balance sheet
Those assets aie sold whenever practical according to The Cental Bank ofEg)?t reSulations to dispose lhose assets in a specified l ear
Book Value
LandHousing units
HotelFactor-v
990.00018.316-912
31n2t2019EGP
20,071,2501,120*50048376,972
3|12/2018EGP
69_.68.722
950
51.316.972
21
HOT]SING .{\iD DEI:ELOPMENT B.{NK\OTES TO TITE CO\SOLIDATED FT\ANCIAL ST-{TE}IE\TSFOR THE PERIOD f,\'DED 3l Decembcr2019
A.8. The copcentrrtion offinrncial ,ssets expo6ed to crcdit risks:Geographical segoentsThe following table represents the aoal_!.'sis oftlrc most importafl bank's credh risk mea-sured at the book va.lue. allocated according to thegeographical segmenr d 3l December 2019 Uhile prepadng this table. risks $,ere allocaled to the geo€xaphical segments according to tieareas relaled to the banli's cuslomers-
Greater Cairo
8--188- t 17.792
.{rsb Republic of ES ptAlerandrig-
Deltr rnd sinai t'PPcr Lgi Pl
Due iom bar*sLorns and -{.dl'ance to CuslomersRetail [naDs:Overdrafls loansCredit cards IoansPersonal loansReal Estate loansCorporate Loatrs:OverdrafuDirect loansSydication loansSpecialized Loaw:Odrer loansFiDaEcial alsebDebt InstnrmentsOther AssetsTotal as of3U12r0l9Total as of3l/1212018
188.010.29012.557-651
786.481.3792-930-533-81I
2-639.345.9091.840.677.140:.665_135-999
5li.119.911
:0.184.438.9972.008.095.9i7
{2360,81 4,89932-303.7i1-478
l8 t.668.263t0-978-760
901.893.4482-718.552.190
t -262,190,47 5293.163.601
27.185.M4sJ9653r,7814.732,133.708
63.4t l-8873.022.495
805.5t6.236t-202-787 -t45
120.650.97112 t.085.J:0
t6.532.1782,433,m6,9433.017 .657 -648
Total
8.388.1r 7.792
5.33-090.440t6.558-906
2.493.891.0636.851.973. t46
4- t22-487_3562.251.9)6-t't I2.66i.3-i5.999
5 r 7-l l9-971
10.18J.1i8.9971.052..{13.779
50.190J53,623,t0.05,1.r t3.831
:8
I I I
HOUSING AND Df,VELOPMENT BANKNOTUS TO'l'llll, ('()NSOI,IDAI'UD I.INANCIAl, S'l A'I l,lMllNl S
IOR I ItE PllRlOD I,INDED.lI Deccmber 2019
The following table represents thc anslysis ofthe most important bank's credit risk in book value, allocated according to the customers' activity:(EaP)
liinInciel
Iistitulions Agri(llllIrrllndustrisl
lnstitutions (:t'mm€rcirl srrviccs
Real lrslBtc
A(tivity
Governmcntll
S€ctor
Other
Activitics lrdividuols 'l otrl
Du. from banks
Lo.Ir &F.clliai.r
R.t.ll[xerdrafts
Crcdil Csrds
PeNonsl loans
Real Eslate
Corporata
overdraft
Direct
Syndicated
Spcdallz.d Lo.trt
Direct
Flnlncirlalrat3
Debt lnstrum€nts
Other A3.!et!
| .595 .222,652
t 50,663.494
1, ti6.636.151
300.869.E78
47,734,563
t,949,t40
1,827,001.487
247,292,380
l.l | 8,743,t l0t7t.356,550
617,288,675
42t,262,877
2,665,335,999
26,177.897
292.5t6.51I
22t,824.118
1,264,1t30,465
6,792.895. t40
517,t 19,974
20,284.438,997
294.975.395
68,539,496
t4,604,295
1,246.t39
5 33,090,,140
26,558,906
2,493,891 ,063
685t973t46
158.3 t4.005
lt.Jti8,l t7,792
533,090,440
26,558,906
2,49J,891,06J
6JSl .97J.1 ,16
4,l22.dt7JS6
2,254,926,t11
2,665J35,999
517,t t9,974
20,2t4,4Jt897
2,0s24t 3.119
Iolrl [s ofSl Decemb€r 20193.223J92.175 19,6t3.70J 2,07 4,293.861 t.290,099,680 .1,730.065,.1,18 r.779,t71,75.t 27.8E9.{29,506 90J{r9,9J0 t0,06J,E27-560 s0,r90JsJ,623
Totalar of3l Decembcr 2018 39.847.059 594,823,22t 79t,126,334 416,r64,869 3.526,300.708 t.936.442,946 23.9t3,194,367 174,372.3E7 8.64t,25 t,943 40,054,t 23,834
29
tl lrllllll !
HOTISLNiG .{\'D DEVELOPME]\T BA}i K\OIES TO TIIE CO.\-SOLIDAITD FINANCIAL ST.4,fE}IE\TSFOR TI{E PERIOD ENDED 3l Deccmber 2019
B. Market RiskThe banl takes on erposEe to market risks" *tich is ihe dsl thal lhe fair value or future cash flo$s of a financiaiinstn]ment i{ill fludua& b€cause of changes in maket prices. Maliet risks arise fiom open positions in i erest rate.currEnr)- and equi} pmducts, all of which ae erpos€d to geneftl and s?gcific rnarkel movements and changes in theievel ofvolatili4 ofmarkel rates or prices
B.l. \larket Risk lleasuremenl Techniques:Vduc at riskThe baok applies a -value at risk" methodolog, (VAR) to its trading portfolios. to esrimate the ma*et risk ofits positionsheld alld it's been mol,itoring dail).
VAR is a starisdcally based estimate of the poteqtial loss on the cunenl portfolio resultine from adverse marketmovements. h sxpresses lhe 'ma)dmum' amount the banli migtrt lose. but using c€rtain level ofconJidence (980,6). Thereis therefore a specified stalisticai probabilit-v (2olo) thal actual loss could be greater than tlle VAR estimate. The V.ARmodel assumes a cenain 'holding year' until positioN caD be closed ( l0 days) before closing the opining quarteG. and itis assumed thai the rnovemsnt ofthe markel during the retention )e@ $'ill follow the same movement pattem thal occrrredduring the previous teo da1s.
The bank is assessing the historical molements in the ma iet prices based onvolatilities and corelations dala for the past
nro lears u'hile collecting fte historical data for the past five years and the banli applies these historical changes in mtes'prices and indicators directl)' to the current positions, and this way is known as a simulaled historical method and the
actual oulputs are monitored on regular basis to measure the epropriate assumptions and factors used to measue vARThe use ofthis approach does not prevenl losses outside ofthese limfu in the eve ofmore significant market movements.
Stress testingSress Testing Stress tests provide an indicarion of the potential size of losses thar could a se under extreme marketconditions. Therefore. bank designs strcss rests accorditrg to its activities by using E?ical aralysis to specific scenarios.
8,2. Foreign e\change riskThe Bank talies on expo$re to the effects offluctuatioDs in the Fevailing foreien cuEencl exchange mtes on its financialposition and cash flous. The Board sets limits on the lerel ofexposure by currcncy and in aggregate for both ovemiEfitand intra-day positiols- rvhich are monitored daily. The table belou' summadzes the bar*'s e\posure lo forelsn currenc-te\change rate risli and banli's financial instruments ar car4ing zunormts. caregorized b) culrenc!.
3l Decembcr 2019Firancial Assets:Cash and balances l'ith Central BankDue tiom bankLoans & facilities to customersFinrnci&l a3setsFinancial assets at amortized costsFinancial assets ar fair yalue throughcomprehensive income
Other Financia! assets
Total titrancial asseas
t'S Dollar Sterlitrg PoundOthcr
Currencies
li iqq qso 3.000.000
.19.768 1.715
93.770.598 20"336.587 119391 2.55{.J96
6.1021696.835,432
19,455,284
Euro
155.260l-284t63
936.97 6
r4.800.000160.088
7 -366121.258
t-005
200.8402-348-7 t'l
3.224
other21.500.000
1-471-763
Financial liabilities:Due to barksCustome/s deposits
Other Financial liabilitiesTotal fi naocial liabilities
Net finstrcial positior as ofSl December 20t9
3l December 2018
Total financial assets
Total financial liabilities
Na financial position as of 3l December 2018
15.155.7173.639.467
342-4311.849,143
r 3,062
12273.65',1
31.841.027r2..110.325
l91.l9ll9.9lr-
8953r,009 t9,t37$21 22.1.J31 l-862J05{139*{89 1,198966 (r5.03{)
3.056219 851.109 32.195
3.056-219 851.,109 tt.ls5
692.291
5.14.025
j.11.025
-i0
HOUST{G A\D DEVELOPMENT BA-I{K\OTES TO THf, CO\SOLID.4.TED FI]\.T\CL{L STATE\IE\TSFOR TEE PERJOD E\DED 3l D.ccmber 2019
B.S.lnterest rate RiskCash flou intergst rale risk is the risk that the future cash flors ofa iliancial instrument \ ill flucruate because ofchangesin markel iflteresl .ates. Fair lalue interest rate risk is the risk that the value ofa financial instrums will fluctuate becauseof changes in marliet interesl rates. The bank takes on exposr-ne to the effects of fluctudions in the prevailing levels ofmarliet inrcrest rates on botl its fair ralue and cash floq risk. Interesl margins mal increase as a result of such changesbd ,na] p.ofit decreas€ in the event thal rmexpeded moveoents aris€. The board sels limits on the le\el of mismatch ofinte.esl .ale reprising ihat ma] be undertalierL which is monitored daill b1 Risk Dept.
The following table summarizes lhe risk that the balk faces the chamge in the r€tum value including the booh l'alue offinmrcial instruments allocated based on the re-pricing dates or due dales price whichever is sooner
(Vrlues in E$.?tirn thousards pounds)(lp to Morr Morc t}rE Motl. thrB Wfuhout Totll
I mo h tbrD 3 months to I ycar to netrmI montt I ye.r 5 y€rrs
to, mortt
Fiutrcisl .{sse6:Cash and D{re liom C€ntral BankDue &om banksLoans & facilitres to customers
Finincirl rssels:Fair l,alue through other comprehmsile incomeFair wlue thmugh pmfit and loss
Other assets
Totsl tiutrcid ass€a
:.369.895233-800
6.7.r-{-{4:t77.138
2.206.600 4.396.724
4,:76.r958.188. r r8
t9,{65.383
t6J83.7:5116 .271
7.459.1i0
I1,010.,t33
r.r35,95938.839
2.702..397
14,838,773 dfl0r95 12.820,931 14,t87,628 9.131.198 56.{88.828
FiB.Dci.l lirbiliticsDue to banLsCustomels deposilsOther loans
otie' fi nancial liabiiiti€s
Tot l lirarci.l lirbiliticsRe..priciDg grp
9,{6,69 |8,913j98
\\4s2
4.163:Jr9,3r 9
6.167:,1i3,607
9t 156E:33,6E2
7 | 8,0515,747 -517
41119.111.439
9,472,111 2-s296{9 2224.763 t{,699"LS0 27.r5E,425 s6.{88.8:8
{,966.032 22E0.616 10592.t71 Itu78 1t8.!27,2271
.{. Liouiditv RiskLiquidity risk is the risk ftar the BaDli is uable to meet its palDent obligations associaEd qith its financial liabilitiesrvhen they fall due and to replace fimds rrten th€y arc withd.awrl The consequence may be the failure to meet obliEationsto repay depositors and fultrll commitments to lend.
Liqoidity Risk M.BlgcnertTh€ bank's liquidiry management p.ocess, as caried our within the b@k and oonitored by Risk ManagementDepartment includes:
Day.today fiDding. managed by monitoring fuhrte cash flows to ensue that rEquirEments can be met. This includesrepleoishment of funds as they malue or is borrowed by custoEers. The bank maintains an active plesence io globalmoney markets to enable this to happen.Maintaining a portfolio ofhi-ehlv markerable assets that can easily t'e liquidaled as pmtection againsl an)' ulforeseoninterruption to cash flo\I'-Monitoring balance sheet liquidity ralios agains{ irremat and rcquirements ofcentral bar i of ES,pt.Managing &e conceqt arion &d profile of debt matudties.
\ronitorine and reponing tale the form of cash flow measuement and pmjections for the ne\1 da},- $,eek and monthrespectivel,y. as these are ke)' )-ears for liquidiry management The starting point for those projections is an anallsis ofthe contractual maruriB'ofthe fi.arcial liabilities and the ex?ected collection date ofthe financial assets.
Risk Managemeni Depaftment also monitors unmalched medium-teml ass€ts, the level and q?e of un-draw! lendingcommitments. the usage ofoverdraft facilities and the impact ofcontingent liabilities srch as stardby lefters ofcredit andguarantees.
-:l
HOL SI]\G -A-I{D DE\T,LOP\{EI{T BA}'K\OTtrS TO T}IE CONSOLID.I.TED FF{ANCL{L ST.{TEIIE\TSFOR THE PERIOD ENIIED 3l Dccember 2019
Fundiog appro.chSourcas of liquidiD arc re$larlJ reUiewed by a sepaiale team in the fust Managenrent (Asses & liabilities). to maintaina wide diversificarion b1 cunenq- provider- prcduct and term.
The available assets 1o corer all lhe liabilities and the loar's obligariols inciude casll' balances sith Central bar i duesfrom bank. t easu-.\ bills othei go\emme al securities and loans and advances to customeB and banlis. customem'loans thal are due within a ],ear are e(ended partialll for $e ordinarl actirit) of the bank ln additiorL some ofdebtinstrumenls- trEasur-"- bills and govemmental securities are mongaged to guamntee the liabilities. the banli has the ahili$to cover the net unexpeded cash flo$'s through the sale offinancial securities and finding other funding rcsources.
Duc from banksThe fair value of floaring laie placements and ovemight deposits is their carrying amomt. The estimated fair lalue offixed interesr bea ng deposits is based on discotmted cash flous using prel'ailing money-market interest .ates for debtsrvith similar credit risk and remaining maturit-v.
Loans and overdrafts to balrkLoans and banking facilities reprEsented in loa$ not Eom deposits al banls. The e\pected fair value ofthe loans andlacilities represents the discouted value of futurE cash flows expected to be collected- Cash floss are discounted usingthe current market rare to determine fair value.
l,oans and Faciliti€s to customersLrans and advances are net ofpmvisions for impairmenl The estimaled fair value ofloans and advances represents thediscounted a$ount ofestimaled future cash flou s e\pected to be rcceived. E\pected cash flo\\s are discounted al currentmadaet raEs Io determine fair value.
FiBrDcial assct!Investment s€curities include o[]y interest-bearing assets held at arDonized cos! financial assets classified at faL value
through other comprehensive income are measued at fair value. Fair value for assels held al arDortized co$ is based onma*et prices or broker/dealsr pric€ quotations. Where this information is not availablg fair lalue is estimated usingquoted madiel prices foi secudties uith simila, credil maturilv and ]'ield characteristics-
Due to other banks aDd custoEe$The esrimated fair value ofdeposits $ith no stated maturilv, which includes noo-interest-hearing deposits- is the amountrepayable on demand.The estimated fair value offixed interest-bearing deposis and other bo.rowings not quoted in an active market is ba-sed
on discounted cash flo\rs using interest rates for rtel, debts with similar remaining maturiS'-
C. Crpitrl MrnaqcltrcntThe Badi's objectives q{reo managing cryital. rvhich consists of another items in addition ofourer's equiq'$ated inbalance sheet are:
To clmply with the legal requiemenrs in Ee!?t and the comtries where the bar i-s branches e\isl.To safeguard the Ba*'s abiliB to continue as ongoing coDcam so that it can continue to pror,ide retums forShareholders aod stakeholders and other parties that de3l with ihe bankTo maintain a strong ceital bas€ to support &e development of its business.
Capital adequacy aDd the use of regulalory capital are monitor€d daily by the BaDk's mamgemenl emplo)'ingtechniques based on the guidelines developed by the Basel Commine€ as implemented by $e Central banli OfEgptfor supen isory purposes.The required informaion is filed Bith the Authority on a quarterl], basis. Central Banli of Eg)?t requires thefollo\ving:Holding rhe minimum level ofthe issued and paid up capital of EGP 500 million.Nrairtaining a ralio oftotal regularoq capital to the risk lveighted asset or above the €reed minituurn of 1096.
The bank's branches are s orking under the regulations ofthe banliirg sector in Eglpt.
The nominator ofcapital adequacy sandard consists oftrvo tiers:
HOTISDiG .{NiD DEVELOPMENT BANK\OTES TO THE CONSOLD.{Tf,D }-A-.I\CI-{L STATEIUE]\TSFOR TIIE PERJOD E\DED 3l December 2019
Tier One:Tier one. consistiog of paid-in capital (a.fter deducting the bool value ol reasut.\' shares)- and retained eamings andresenes resulting from the dishibution of profits with tle exception of banking risk resen€ ard deducting there fiompreviouslj- recognized eood[ill and an"., transfered loss.Tier Two:Qualifing subordinated loan capital- s'hich consiss ofthe equivalenr ofthe risk allocation according to the p nciples ofcredir issued b) the CenEal Badi of E$,-F t for not more tha l.l5o,i, oflotal assas ard liabilities \€ighted uith dsli. Ioans/ deposits suppon in e\cess ofthe scheduie offive -'.,ears
($ith cotsumption of20o,6 of fieir value in each ].ear oflhe lastfive 1.ears ofthe schedule) and 45ou,i, ofthe increase bet*een the fair value afld book value for each of the financial assets
at fair Yalue tkough other mmprehensive income and at mortized cost in subsidiaries.
\lten calculating the total dominalor of capital ade{uac}, it shall not exceed the capital cushions (Quatitin-ssubordinaled loan capital) for shale capital and loars nol to innease (deposits) support fffhalf of the share capital.
Assets are risk iveighted ranging from zero to l00o/o classified by the relalion ofthe debtor to all each asset to refloct thecredit risk associated $'ith it taking the cash collateral accdmt. These are used for the treatnent of off balanc€ sheetitems after adjustments to reflect the nature ofcontilgency aod the potential loss ofthose amouots.
The bank had complied Bith all the local capital requirements dudng lhe past two ),eals.
The following table summaizes trasic and syndicaEd capital coftponents ard rhe capital adequacl ratio.
3lltu20t9 3l/12/2018EGP EGP
Capital adequacy ratio according to Basel IlCapital(Tier I capital) basic caphalPaid-up capitalAmounts resen'ed for capital increa-se
ReservesRetained eamingsTotal deduction from basic capitalOther comprehensive income
Total basic capitalNet income for the,earTotal paid up capitd and additional paid up crpital &nd retained earnitrgs
1.165.000.000
1.E22.074,t81 2.938-163.526
1520562J0{ 1.i99.368.783
5J{2.616385 .1.-1i7.i31.309
1,265,000.000379*500O00
234J,602,708101.J{9562
(317J60.176)?8.EE2,0E7
t.796-180.9i3:27.808.785
(350.826.191)
4J05.000209.441.578
(Tier 2 capital) slrdicated capitsl,,1594' of Special Resen€Impatment provisions for loaas, facilities and cootiEgefi liabitities50o..i, of disposals &om tier (l ) and tier (2)
Total Syndicated Capital
Total capital
1J05.0002t2.1252E6
(8O00)
7443012E6 213.616.578
5.58E,9{3.671 4-551.178-887
19,370,022,890r,l{8"203,6566.291,125.500
26309.352,0{6 2i.151.911.657
r0.85 I9.,10
16.7 55 .326.2631.252.236.3945.4{7.362.000
Based on the banli's consolidated financial slarement according to the Cenral Bar* ofEe}?r Egulations on l8 December2012.
Risk-rfeighted assets atrd conting€nt liabilities:Total Credit RiskTotal Market fuskTotal Operational fusk
TotalCapital .{dequacy ratio (7o}
H Otr S I \ G .{ND DEVE LOPI\I-ENT B.cr* K\OTES 1'O THE CO\SOLID{TED FliiA\CIAI, ST{TE\IE\TSFOR THE PERIOD E\DED 3l December 2019
Financial l$ersge
Tier one capital after exclusioos
Total on-balanc! shset erposures- deriYatives contracts and financial papers
operationsTotal offbalanc€ sh€et o\:posues.Total eriposues on-balarce sheet and off-balance sheel.
Finamial leverrg€ Etio
3vt2t2tt9EGP
/11,20i8EGP
5J{2.63638s 1.387.5:2.309
53323.156.000 48.677.157.000
r0.0: 8.91
51J0t.0t6.000
1522.070.000
47.67r.651.000
r.005.506.000
J. Critical {ccountinE Estimates and JudgrBents
The Bank malies estimates and assumptions that affect the reported a.mormts ofasses aod liabilities wiriin the neN financial
J'ear. Estimales and judgments arE continually evaluated and based on historical experience and other factors- includingexpecfations of future events ital are believed to be reasonable under fle circumstaBces afld available info.
A.@Based on personal basis The Bank rEliews its Ioan portfolios to assess impairmen at lea-st on a quaterl)' basis in
determining whether an impairmenl loss should be recorded io the income slatement the Bank malies judlments as towhether there is any observable data indicaring rhar there is a measurable decrease irl the estimated futur€ cash flo\rsftom a portfolio of loans before the degease can b€ idefltified with an individual loan in thal ponfolio .This er,idence
may include observable dala indicating thal there has been an adverse change in the pa)'rnenl (Eglplian Pounds) status
of borrowe.s in a Bant- or national or local ecorpmic colditions rhat corElate uith defauhs on assets in the Bank.
Management uses estimales based on historical loss er?erience for asses tith credit risk chataclerislics and objectiveevidence of impai.ment similar to those iD the portfolio when scheduling its fijture cash flows. The methodolog-v andassumptions used for estimating both the amou and timing of future cash flous ale reliewed regularl) ro reduce an)din'erences bet\reen loss estimates and actual loss exp€rienca.
B, Fair ralue drrir.etive(The lair yalues offinancial instruments thal a.e not quoted in active martiets arp determined b) using valuation techniques.\VheE valuation techniques (fo. example. hodels) arc us€d to dete.mine fat values, they are validated and periodicallyreviewed.
C. Finapcial asse$ clrssificd as aportized costThe non-derivadve financial assas with fixed or determinsble pa),nEnts and fixed maturit! are being classified as
amorrized cost. This classification r€quires significantjudgDert. tn making thisjudpenl the Bank evaluales its intentionand abiliq, to hold such investsnefts to maiurilv. Ifthe Bank fails to keep these iovestments to matuit] other lhan for the
specific circumstances- for example selling insignificant amount near to the maturirt* dale.
D. !ssg!q9-tals!The baDli is subject to income tax in a number oftax circles for its branches $,hich requi€s the use ofsienificant estimates
to determine the total income t&x provision. Therc's a number ofoperations and accounts thal are diflicult to determineits final ta\ e\pense accumtely. The bar ( qeated provisioqs for &e expeded results of$e ta\ hspection thar is beingconducted and io account for prcbable additional tar. When there is a differencs behve€n rhe final resuhs ofthe ta\ andtie pre-recorded amou s. tlrese differences u'ill be adjusted againstth€ income t&i and the deferred income tar provision.
HOLiSING Ar\D DE\TLOPMENT B-{liK\OT[S TO Tm CO.:-SOLID.4.TED Fl\A\CL{I STATEME\TSFOR TI{E PERIOD ENDED 3l Detember 2019
5. Seqment lnahsis
A. Sesment A[slYsis of sctivitiesSegment activit] includes operational procedues and the assets that arc used in poriding banking sen ic.es and manaldngthe risk related ro it and the retum rclevant to that activiry- tial mar differ Aom an.v" other acti\ itie! and lhe segmenlanal] sis of operations according to bar dng operdions includes the follor ing:
Corporatc, trtcdiuE! &small sized enterpri!.This includes current accoufls (debit/credir). deposits. loans & facilities ard firamial derivaJives
Itrvestmentslnclu&s merging ofcompanies hnancing companies rEskucturing & 6r1ancial tools.
RetailIncludes cunenl saving & deposit accotmts- credit cardr and penonal & real estate loans-
Otber activitiesIncludes other banking actirities.
Traosactions berween business segments arc on normal commercial tenns and conditions and it includes operationalassets and liabilities as presented in the Bank's balarce sheet-
Rcr?rreJ arral Eroenses accordinq to segmenl acti1,itv
The ycar ctrdcd on 3l Dcc.Eber 2019Seement activity EvenuesSegment activity expenses
Segment operaliotr resultsUnclassified er?ensesNet income for the 1'ear beforc ta\esTa\esNet income for the \ear
The lear ended on 3l December 2018Seelrlent activit-v EvenuesSegmenl activilv e\p€mesSegnent operation resultsLhclassified e\pensesNet income fo! the year before ta\esTaxesNet income for the -year
Inrcstrllentt.718,954.799710:64.093
1 .01 8-690,706
Individuals2.0s8:70.681I .56E,106,0+9490.164.83:
Other rctiviticsl-839f56.3:6531J 19.273
ti07-937.053
Investbentl .668,089.06376E.45E.090
899,630.912
Indiliduals1.982j03,0351 .556- 14f,3 32
426,360.703
Other rctiliticsi ,810,544,0%7769t2,94t)
l .033i61 .1 56
Corporatc2.576,170259t,881,873J?r694.896,888
EGPTotal
820.1252.26sd,69r 562,7863-51 1.6t9,179
(6.18.d2sJ9{)
2A6J63.9851639.{1t.637}2223j453.n
EGPTotd
7.5@2922314,558,106.616
3-00!, I t5,605(401,798,2%)
?-600J87.309
1632,745-758)
1-%7.641 .55 r
Corpontc2.09.1 56,038
|,1s65?326/.612.63\774
B. Anahsis of Geosraphical Segment!
Y.sr cDd.d ou 31 DltcEbar 2019R6,crnas &crpcus€s ir rccordarc.Iritt gaographiel scgm.rtGeographicalsegDe rcveruesGeoEraphical segEent sipensesSector's profit resutsNe! income for rhe vear belbre a\es
Net income for tlre 1-ear.qss.ts r[d li.bilitics in .ccorda.c. xi6 gcog phicrl s€mcit.{ssets of geographic se€mentU'lsp€ctfied AssetsTotal ass€tsLiabilities of geographic segrnentOtlcr icms of lbc Gcographical s.gmetrtDe?reciationsknpairme revelsal
5,880,127:891.074,637 .137r.805,490,152
r ,760-302,46 I963.55E.68:196J43,T19
Alerendrir. Deltr&Sinri t pper EgIpi Total
8J01152J65sJ39J88:802,863263,9t52.E63J63,9t5{639,,118.637)2J?33.t538
8.750,683.r07
t,750,663,10?9,153,61l:38
( r 8:18,1 10)
2.990.869.65
29m189,625
( 5..102_850)
i3.073,133,J91r,1.t6,071,66E
s.r;219J05,16046.686330J39
IcP
G r€ate. Cairo
{1J3r560,76034.533.052.859
. r3l.t66.r 5-
HOUSING AI{D DI\ELOPMENT B.ANK\OTES TO TIIE COITSOLID-4.TED FI\.{ICLA,L STATEME\-TSFOR THE PERIOD ENDED 31 December 2019
{lelrdrh. DchrESi!!i t pp€r Egr pt\'Gsr cEdad or 3l DGrGot.r20lt
Ravctroas &arprnjci in accordaEcas'irh g.ogrrphicd s.gDcntGeoE aphical segment revmuesG€ographical s€mm! exTmsesSeclor's profit resslts
Net income for the tea,_ before la\IariNet income for the yearAsscti rtrd lirbilitics ir sccordrnce *itl gaognphicrl s€mcotAssets ol geographic segmentUnspecilied AssetsTolal assets
Liabilitid of geogBphic seSmenlOrthcr itams of th. G.ogrrphic.l Scgnr.ntDepreciationsImpairment
GreiterCriro
36.087.645:.18
5.66:,794.6384.062.38E.20:I 6{x)406 416
1.4r3313,013667.641.554745.765.{59
506.6t8.586l5:-403.r7::54: i 5.J I{
6-854.673.8E8
6,t54-671-8887.00t.90t 493
( 14.014.798)
:.452.488.869
:-451-4t8.t69f.,r482?3.458
(3.655:?6)
.+5-194.808.005
836-733.49045fil-5.11.49540. I I l-864.989
Totsl
7 ,542,E25,231{.9t2..138.9282.500387J091.6m3E730t)(632.t.tS.7S8)
r.967.6{1.551
( r87.123-t:3)(196,995.099)
( 104-803. I 97 )
36
HOUSniG AI,aD DEIELOPMENT BA\K\OTES TO TIIE CO\SOLIDATED }-L\-'.T\CL\I- STATETIE\TSFOR TIIE PERJOD E\DED 3l Decemtler 2019
6- \et interest idcome
Interest receit'ed from loans and similar items:l-oans and advances to customersFinancial investrneft not ai fah value through profit or lossDeposi8 ard curent accormts
Total
Cost of Deposits and similar Erpetrses:Deposits aod current accourts:BanksCustomer
TotalOther financial inslitutions loans
Total
Net irterest income
7. \et fees &
Fees & commissions income :Fees & commissions related to creditFinaocing fees
Other fees
TotalFees and comEission erpenses:Other paid fees
\et income from fees and commissio[s
8. Di\ idends Incom€
Equiq'i.stument at fair value through profit or lossEquity instrurDent al fair va.lue through other mmprehensive income
Total
9. Net income from financial assets at fair value through Drofit and loss
Forex profit (losses)
Debt instruments Equir)* al fair yalue tkougb profit and loss
\et income from Iiirancial assets at fair r'alue through profit aad loss
Sales of housing prop€rtiesCost of sold properties
Revenue from propertiesOther housing rcvenues
Total
2.4t5,76r..t9{2.856,,195..169rJ51.J52:1.1
6,623,7{t9.177 6.151.891.170
J,628r9,640 1.932.1t8.120
2,995,409517 3.120.754.050
31t12D019EGP
-11/12l2018EGP
1-878.16i.81it-651-i t9-(,61
r.62:.409J8.1
3y12t2019EGP
3y12t2818EGP
-t7J06-5013J78.421,095
.10.956.560
).660.452-965
3..115.729-_<96
212570,0J-11.701.409.525
230_728-595
61,229,932157,168,6671,14J31.718
28.058.60i156-286.1981.18..168.984
363J30Jt7 332_813.785
(3J,808J78) €8.880,648)128521,839 303.9i3.137
31fi2t2019EGP
2,914-<493,698.956
31 2DO1aEGP
2-356-1 .19
8.935.195
6.673.505 I1.291-37:l
3t t12D019EGP
l7,761537lsJ98f69
31fi2t2018EGP
15.881-402.{5,93 I -_3 62
61,t63,J06 6r.812.764
31tr2a0t9EGP971,t80,750
(39222493O)
3l]t212018EGP995,788-279
(446-875.020)
578,955.82060,866.096
518,913-259143.765-428
639,821.916 692.6'7 8.681
10. Relenue from housing Droiects
HOUSING AIID DEVELOPMENT BANKNOTES TO THE CONSOLIDATED FINAIICIAL STATEMEMSFOR TIIE PERIOD ENDED 3l Dccember 2019
St!ff costWages and salariesSocial insurancesRettement benefit costOp€ration utilitiesCurrent exp€nsesPortion of social and athletic activitiesDonationsOthers
Total edmiristrrtive erpeNcs
!2. Other oper&tins revenues (experses)
Reyaluation loss€s of assets and tiabilities balances in foreign cunencieswith monetary Datue other than hcld for tradfug or classified al inception alfat Yalue thrcugh pmfit or lossGain liom selling properties, plaoets and equipmentReversal of other prcvisionOthers
Totrl
13. Loans impairmont losses
3yt2n0$EGP6s1,499,89239249,48714.747,t5t
517,49t,63t3r1599560
I,743,6604/.54730395,r 45,953
3Ul2n0t8EGP6t5,653,23930,672.636I1,656.7t I
373.560,150270,133,6W
1.282.55067.403.13431,073.033
1,68s.031.67r 1.401.435,062
3ln2t20t9EGP
3ut2DOt8f,GP
(r l,r r 1,140)3342,799
(7,%5.013)171222,6E3
(4-279.191).
3,t32.6195,8?2,6',19
81,278,364
r6r,4E9J29 85-954.471
3ln2z0t9EGP
(4r3J17,r60)249.013
(2,189.230)
3 l2no$EGP
( 196.995.099)[rans altd customer advancesDue fiom banks
Debt irstnrments -at amortized cost
Totrl (4r5,r57J37) ( 196.995.099)
14. Iarcome tax exDenses
Current taxes
Deferred income taxes
Tottl
3Unn0t9EGP
(64t,70424212Jts,60s
i t2nofif,GP
1626,234.287',)(6.511.47 r )
15. Earnings Der shsre
Eamings per share are calculaled by dividing the net profit for the year attributablc to the equity shareholders by rhe weightedave.agg lumber of shargs outstanding during the Year.
Net profit for the year available for controlling interestWeighted avemge number of sharcs
Basic errnings Fr ahrra
3Ul2n0lgEGP
2J13.687.068r26500,000
3 r2nofiEGP
1,95 t,012,961126.500.000
t7.50 \ 5.42
38
I l. Admiristretive expenscs
,- 1!i21!!{1lr 63r.14s.15e)
HOUSING AND DEVELOPMENT BANKNOTES TO THf, CONSOLIDATED FINANCL{L STATEMENTSFOR TIIE PERIOD ENDED 3l December 2019
16. Cash atrd belences with cetrtral ballk
Cash
Due from central Bank within the rc4uired rcserve percsntage
Non-interest bearing balances
Curelt accountsDeposits
Provision of impairment losses
Non-interest bearing balances
lntcrcst bearing balances (Fixed rate)
Current balalces
I8. LOANS & FACILITIES TO CUSTOMf,RS
RctrilOvsdraffsCrcdit cardsPersona.l loans
Rcal Estate loans
TotdInstitutiotrs iocluding smrll lortrs for cconomic rctiviticsOverdraftsDirect loansSyndicated loansrother loans
TotrlTotal toans& facilities to customers
Lesi:Impaiment of loan loss provision
lnterest in suspense
1J76,r94,t55 2.486-318.942
4276,194555 2.486.318.942
3 l2notgEGP716.784'243
35s9,4r0,6r2
StnznotaECP842,706;105
1-643-612-237
3tn2n0l9EGP
9Er70J528r89,E47,440
3vt2DotaEGP
57,892.3378.715.315.360
8,388,1t7,792 8.773.201.697
6,792"895,t401576J12,696
r8,909,956
7,049.851-0601.683.6'12;138
39,683,899
98J70Js28J89,847,440
8J88.n7,792 8.773207.697
5',7.892.33't
E,715.315.360
8J88,1t7,792 8,773.207,697
8J88,117,792 8,773,20',7.697
31lt2n0t9EGP533,rlr0.44026,s5t,906
2,493,891,0636,85r,973,146
3yt2a0t8EGP343,854,016
19.0'19.9761.838,753.8186,386.914,018
9,90s51J,555 8.588.601.828
4,122,4E7 )562254,925,17 t2,665J35,999
517.119,914
3 ,431,721,3532,011,819.8911,034.371.057
621.019.249
9,559,869-s00 7.098,93r.550
19,46sJ83,055 15.687.533.378
(2"251,4t8,897)(r8r04,r92)
(2,027 .028.22t\(51,250.753)
Current BrlancesNoIr-current Balsnces
17,195,759,966 13-609.254.104
4,229,920,48115235,462,51 4
3 -983 ,263 -142I t -7 04,27 0,236
r9.46sJ83,055 r5.687.533.378
17. Due from banks
Celtral Batrk (excluditrg obligatory rcscwc)t c€l Ba*sForeign Banks
39
HOUSING AND DEVELOPMENT BAI{KNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THf, PERJOD f,NDED 3l December 2019
* Supported loans are paid regukrly within the govertrmental plan for sociable development,
Inrpairment of loan loss provisiotrMovement atralysis ofimpairment oflo.n .Dd facilitics lo$! provision to customers
31n2DOtgf,GP
Balance a fre beginning ofthe year 2,027128221Transferred to reserve general risk (283,{40,91f)Impairment loss 413211,180Amounts written offduring the year (17,752:764)Reflrnded amounts during the year 122,7a3952Foreign currency revaluation difference
Belarce rt the end ofthe yecr
(r0,416,78r)
3Ut2D0t8EGP
1.922.302.9 t4
196,995,099(101,891.756)
8,515.3451.106.619
2251418891 2.027.028,221
19. FINANCLA.L INVESTMENT AT FAIR VULE THROUGH PROFIT AND LOSS3ln2DOl9
EGP3U12n0t&
EGP
Equity instrumeff listed in stock market
Local companies' shares
Tot.l equity itrstrumeltEquity instrument unlisted in stock ma*etMutual fund's instrument
Totrl Equity instrument unlisted itr stock marketFinancial investment portfolio managed by othe$
Total trading finrncisl asset!
s7,529,241 62-t62.10057,529,211 62.162.100
27,888,133 10,911.003
27,888,133 10.911.003
330,860,026 303,472,677
416,277,40O 376,545.780
20. FINANCIAL ASSETS (OTHER THAN TIIAT IN FAIR THROUGH PROFIT AND LOSS}3l t12t2019
EGP3l t12t2018
EGPFi[a.tcid rssets at fair vrlue through other comprehensiye incomeDebt insaument :
Listed in stock marketUneamed interestEquity instrument :
Listed in stock ma*etMutual fund's instmment established according to the issued mtes
Total Financisl assets rtfairyrlue through other compreheosive income
Financial rssets at Amortized CostDebt instruments -at amonized cost:Debt instrument (listed)Uneamed interest
Selling ofdebt instument with obligatiofl ofrebuying
Provision of debt instrument impairmenl losses
Total Financial assets rt Amortized CostTotrl Finaocial assetsCurrent Balances
Non-current Balances
112,019,69036,949,00r
1,933,681,038 I ,339,07 3,402
202U,438,997o,096,238,7$)(4,629,86E,73E)
(8r87,034)14Js0,044,436 12.689.653,041
16483,725,414 14.028,726.446
t,918,090,4t9(rJ3,378,072)
I.358,475.700(89,729,678)
53.327.38017.000.000
18,480.234,083(t ,27 3,905 ,216)
(4.51 6,67 5 ,7 63)
r6J34,756,783148,968,69I
13,958.399,06610.327 3AO
16,483,725,474 14,028-726,446
Debt Instruments interest bearing (fixed)
.10
16J34,756,783 13,958,399.066
HOUSING AND DEVELOPMENT BANKNOTES TO THE CONSOLI-DATf,D FINANCIAL STATEMENTSFOR THE PERIOD ENDED 3l December 2019
Behnce rt the b€inning ofJrnua.y l,2019Net movement of buying erd selliryAmortization of premium issuanceChange in fair value
Selling ofdebt instrument with obligatior ofrebuyingProvision for debt iNtrument impairment
Bdrnce es of 3l DeceDber2019
B.l.oce is of I J.trurry201tNet movement ofbuying and sellingAmortizaaiotr of premium issuanceChange itr fair valueSelling of debt instrument vrith obligation of rebuyingB.lance rs of 3I Deccdber 20lE
Chrnge itr f3ir v4luc of equity instruments rt frir viluc through othercomprehensive iocome
Change in fair value of equity itrstumeDt at fair value through othercomprchensive itrcomeTotil
2I. INVESTMENTS IN ASSOCIATED COMPANIES
80.523,r91
EGPt4,028,726,4462,485 236.344
10,719,50280,523,191
(r 8,r92,975)(8,287,034)
(113,r92,975)(8,287.034)
r,933,681,038 r4550,M4,436 16,483,725,474
Fitr mirl assats
tt fair vtlu.through othcrcooprchcBivc
ircomaf,GP
1,339,073.4025 I 4,0E4,,r45
Fimftid ,asatsrt Amortizad
Cost
EGP12,689,653,0441,971,151,899
10,719,502
Totel
(4.516.675.763)
1J39,073,402 t2,6t9,653,044 11,02t,726,t16
2.449.126.54216,087_768,134
10,148,637( r ,64 r ,1 0,1)
(4,516.675.763)
3UDn0t9
EGP
80523,19r
3ut2t20ra
EGP
(t,64l,tM)
El-Tame€r housing and utilitiescompanyEl-Tameer Real Estate FinancecompanyHyde Park for Real EstateDevelopm€nt CompalyCity edge companyTot!l
r,188,625535 57,783J70
8,r63,046J30 297,759,598
2,M9,940200 rs6,4rs53015254,492,446 rr,577,698,738 3,401J54,0t5 5t7,988,627
The bank shares' in profits of associated companies in 3l Decamber 2019 amounted to EGP 225,615-385
Competry's lotalalscls
EGP22t 371,721
2,034,180r88r
9J69,00r587
3,629,938r57
Comprry's totdIirbilitics witLotrtowmrs' equitv
EGPr56,086,673
3 t2D019
Comp{try's tot{lravetruas
f,GP283,88080r
242,$62m
2,fr27 5s3l3t
847,183,493
CompeEy'stotrl profit
(to$)EGP
6,030,129
Sharespercertege
35ch
SharesValu€
EGP22,849.166
2to,t46.347
1,032245,064
24.8"/"
53,66"/"
19340/0
El-Tameer housing and utiliti€scompanyEFTarn€er Rsal Estate FinatrcecompanyHyde Park for Real EstateDevelopment Company
City edge companyl{D fo.leasingTotal
CoDprtry's lotrlastats
EGP231,176,978
1,873,774J32
9,111,649525
3294,894525
Comprtry's totrllisbiliti.s withoutowners' equiE-
f,GP178J02,686
I ,045,,1E4'5,14
7,080,142,t6t
3 t2D0t8Compery'3 totsl
ret'ertres
EGP142,E26,132
236,193,110
1,744,8s9 29s
780rr8,108
CompaDy'stobl proft
(loss)
f,GP4,342,41E
Sharespercetrtlgc
o/.
35"/o
Sharts Value
1,7r4,895109
r45rt,495J60 10,018,824,600 2,904,09664s 490,076982
44,934146 24.avo
242,140,758 53$6vo
trGPr 8,06E,502
2t3,734,162
884,798,758
6r4Jr3,84699,s99Jr3
4t
19,52o/o780/o
l-E22-514.5t1
54,9792341,285.735 272
(r,641,104)
2,394,141 ,30814,802,032,862
10,t48,637
s0513.t9t (r.64tJ04)
612,361,915llET?509,092
r98,655,66t)
HOUSING AND DEVELOPMENT BANKNOTES TO THE CONSOLIDATED FINANCIAL STATEMEMSFOR THE PERTOD ENDED 3l Deceober 2019
22. HOUSING PROJECTS
Lands allocated for housing projectsUnder Construction projectsFinished projects
Housing projects provision
Tot l
Total Investme s
Accumulaled Deprecialion
Net book v.lue rt the beginDing ofthe yesrAdditionsDisposalsAccumulated depreciation of Disposals
Depreciation of the year
Net book vslue rt the end of the ycrr
Computcrs progr.msBeginning costAdditions during the learErding costAccumulated depreciation ar the beginning ofthe year
Depreciation during the year
Accumulrted deprecirtiotr rt lhe erd ofthc ycrrNet book vrlue .t the .nd ofthe ye.r
25. OTHER ASSETS
Accrued rcvenuesPrepaid expensesAdvanced payments for purchasing lued assetsNotes receivable and customerslnsurance and consignmentAssets reverted to batrks in settlement of debts
Others
Totrl
3Ul2n0t9EGP
892537245713,961902689,{45541(24,0t6,7511
3vt2aotEEGP
567.536.7921.592.r95.848508.871.393(t9.727.2t9)
2.2? 1.933.931 2.649.276.8 t 4
The total area ofempty units' available for sale household units 263,069 meters, administrative and commercial buildings 23.446meters and the lands 2.420 million meters.
2.]. R-EAL ESTATE INVESTMENTS3ln2t20t9
EGPr r8,7t8,719(34.41l69l )
3vnn0l8EGP
r46.363.465(30.092.013)
84J07,02839J80,9t5(366J l6)
6TJE9(l2,rurr3)
t 1E.271.4529.033.572
(38.678.3r E)5,209.293
(9.528,971)
r l r.20rJoJ 84.307.028
Real estale investments rcnled for the bank's companies and others with yearly renewal conuacts and wirh depreciation calcularedfor the rented units at 5% amually.Real estrte investments have been rcvaluatcd with 6e fair value by an amoult ofEGP 374.1 million as of3l December 2019 byan evaluator with a recognized pmfessional certificate and has an €xperience ofreal eslate.
21. I\TA\CIBLE ASSETS
3U,2n0$EGP
297,55356277,010,051
3Vt2notEEGP
t7 5.628.7 56121.926.806
374,565.613 297.555.561(89,883.21l)(86.442,180)
(2fi,4312991 (116.325,391)
I l4.t28J l4 121.230.171
3Ut2n0l9EGP
466,434,0097.853,082
236,431144E73J2E,67310,205,60369568,722
3t6,686r46
3ulzaot8EGP
492.721.6185.690.080
68.270.066381,673.17t
4-547,22051,3t6.912
560,437. | 86
42
2,052,4t3,179 r.564,656,313
(l76J2sJ9r )(64, r,906)
HOUSING AND DEVELOPMENT BANKNOTES TO THE CONSOLIDATED FINANCIAL STATf,MENTSFOR THE PERIOD ENDED 3l December 2019
26. ! ircd asscts
Bslrnce st I Jaousry 2018Cost
Accumulated Depreciation
Net book vrlue rt I Jrnuary 2018
3l Decenber 2018Net book vrlue at I Jenurry 2018AdditionsDisposalsAccumulated depreciation of disposalsDepreciation expenseDepreciation chargcd to investments propertics
Nct book vrluc ot 3l Decembcr 20lE
Brhnce ra I Jrnusry 2019CostAccumulatcd Depreciation
Net book veluc st I Jrnuary 2019
3l Dccember 2019Nct book value at I .lanuary 2019AdditionsI)isposalsAccumuldted dcpreciation oI disposalsDeprcciation cxpcnse
Net book value at 3l December 2019
Brlsoce 8t 3l December 2019CostAccumulated Depreciation
Nct book value rt 3l December 2019
FumiturcEGP
Automatedsyst€ms
EGP
Facilities &Installments
ECPlotall](it,
3,494.5391,906.574
LandstscP
2.111.944 456.55t.501l32.t59.tt4l
Transportationvehicle
ECP
46,780,483
25,513.349
Machinery &Equipment
ECP
311.012.571
t78.890,528
t32,122,043209,128,895
59.28959,283
11.342,339
70.096.73432.440.449
24,639,86',1
2l,466,8129t5,353,639392,577,6t3
2.777,944 324,191,660 21,26'.1,134 132,122,043 37,656,285 1,587.965 3,1'12,995 522,176,026
2,771,94420,520,830
856.763 3,1t7,304
23,298,774 355,014,857 23,416,835 263,908,593 46,1 ,157 2,059,819 1,614,2U 715,503,319
23.298.774 509,269,914t54,255,057
324,191,66054,167,548
t,449,135
|,177,42022,200,233
872,403
2t,26',1,13410.714. r 282,052;t89t,890,1848.401,822
37,656.28514,979,658
17.,806t 4,576
6,442,556
r.587,965t.328,617
3,172,9951,558,593
26,t98,46024.584.tl6
522;7',|6,026312,398,269
3,579,0193,141,463
I t8,361,017872.403
| .224.t72.889508,669,570
55.441,82232,024,987
520.082.177256,173,584
85,058,58638.868.429
4,823.t 562,763,33'.1
23,298,774 355,014,857 23,416,835 263,908,593 46,190,157 2,059,819 1,614,2U 715,503,319
23,298,',17 4165,562;785
355,0t4,857t96,950, I l5
'738,456
t44.90727,129,901
23.4 t6,835r3,738,7182,802,6511 '.r11 11'
t0,945.876
263.908.59367,204,8286,599,3776.597.159
10t.588,24t
46,190,ts'.?21,971.080
97',t,6069t8,5t3
7,950,58t
2,059,8193'.|2,642
35,80835,808
868,226
t,614.2841,0t9.905
7t5.503,319466,820,073I1.r53.8989,930,109
149.156.2496',73,418
188,861.559 524,241,s16 25,640,748 229,522,962 60,151,563 1,564,235 1,960,'17t t,031,943,354
I1t8.86 t.559 705.48t.573t8t.240.057
1.679,839.064647,895.710
188,861,559 524,241,5t6 25,640,748 229,522,962 60,151,563 1,564,235 1,960;t'n t,031,943,354
66.37?.8{t940.731.141
580.687.628351. t64,666
5.159.9903.595.755
106,052,06045.900.497
27.218.36525.257.594
4-l
Buildings &Constructions
EGP
tt tlttllttt I ttllllllI
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 3I December 20t9
Current accounls
Deposits
local balksForeign banks
Non-intere$ bearing balances
Interest bearirg balances (fixed rate)
Current balances
28. CUSTOMERS'DEPOSITS
Demand depositTime & call depositsSaving cetificatesSaving deposits
Other deposits
Institutions deposits
Individual deposits
Non-interest bearing balancesInterest bea ng balances (variable Iate)
Interest beadng balances (fixed late)
3uDn019EGP
471,875950,854,149
3Ut2n0t8EGP
982.699455,937,553
951J28,024 456.920-252
946,69rrs04,636,774
451,289,4705,630.782
9srJ28,024 456.920-252
473,875950,854,149
982,699455,931.553
951328,024 456.920-252
951J28,024 456.920.252
3ul2DOtgECP
16J,18,E51,207r0,64759s,ss74,598,185,8s76,012,7554223,304257 ?97
40911,6{5J40 33.853.979.049
31fi2D018EGP
14.965 -98r,22',16.280.702,2843 .628,298,7815 ,030,227 -5453 .948.7 69.212
r7508,799J5323,402,845,987
40911,645,340 33,853.979.049
17.518,613.50016.335,365,549
r9,1t 1,438,4585,707 ,421,441
16,092,7E5,435
11.404.000.7774.849,227 .545
11.600.7 50.727
40,911,645J40 33.853.979.049
36Jr3,459,4834,598,i85,857
30,225 .680.2683,628,298.78t
40,9 ,645,340 33,853,979,049
29. OTHER I,OANS
Long term loansLoans Cranted from the CBE:Loans of Bank ActivityNcw Urban Communities organizationCorstruction & Housing OrganizalionHouses Mutual Fund
Tot l loans granted from the CBEIraDs granted from the Social Fund for development'fhe E$,ptian Company for real estate refinanc€ loan
Loan g.anted Aom Export development bank to HD leasingTotalCurent balances
Non-current balances
Interest rrtevo
3ut2D0l9EGP
3ut2D0t8EGP
t,610,440295r1,028
441,428,49710,134,409
4,568,1t238,622,647
5t6.01t,32314.699,165
182,684,314 573.961-247
t4-75 0/" ,7 0/"
ltv" , t0.250/.106,sss,00059,928,623
182,658,r69
831,826,166 '7 0t .7 55 -614
The bank fulfilled its commitments regarding those loans itr terms ofthe principal amount & interest arnount or any other conditionsduring the year and comparative year.
58,815.00068.979,367
I11$00,86272032s3O4
68,919,367632-776,247
44
HOUSING AND DE\'ELOPMENT BANK (JOINT STOCK COMPANY)
27. DUE TO BAIIKS
Current balances
Non-current balances
12.7 50/,
12.150/"
t2;750/"12.7 5"/o
______ 831,82!:Iq _____l!l::_{14
IIOUSING AIID DEVELOPMENT BANKNOTES TO THE CONSOLIDATED FINAITCIAL STATEMENTSFOR TIIf, YEAR ENDf,D 3l Dccember 2019
30. OT}IER LIABILITIES
Accrued interestUnoamed revenueAccrued expenseCrcdiiolsAdvanced payments for lands and unitsDown payments for inslallmsntsChecks under payment & credit accounts utrder s€ttlementCrcdilors to buy lands
Other credit balance
Total 3,49,144310 4.200,212.273
STOCKCOMPANY)
3ul2DOt9EGP232,713,685
r,965,72s134$27,1s2389s0,594
753,r86,733r35r66Bse472,738554104,657,444
1,595,637,464
3Ul2notaECP340,516,636
1.326.190I t5-523 -78243.483.245
750.243,645218,121-760553.925,012867.062.671
1.310,009.332
,15
HOUSING AND DEVELOPMENT BANK (JOINT STOCK COMPANY)NOTES TO THE CONSOLIDATED FINANCIAL S'TA'I'EMENTSFOR THE YEAR ENDED f,l Deccmber 2019
f,t 2/20t9
Provision for contingcntliabilitiesProvision for loans commitments
Provision for tax
Provision for legal claims
Transfer fromgeneral risk reserve
62.652,019
277,566.242
Chargeda mou nts
l{1.437.90(r (421,452)
(50,000)
(236.152\
(14,019,54',7)
340,2 t8,32 t 24,311,845 18,437,906 (14.?87,t51)
BeginninS ballnce Charged smounts Utilized !mounts
Utilizedamounts
Amounts no longer required ECBEnding Balsnce
( t04. I I0,569) 18.283.t91
Additionsduring the
period
Provision for Disastcr reliefProvision lbr other claims
l otal
59,741,68 |
402,857,466
132,848.661
42;166
79,022,905
3,655,000208,106
20,508;739
(26t.8 t3,683)
(243,t98,244\
(2r 8.09r )
(4,584,83 t)
t5.7 52.559
177,67 5"676
136,235.570
t4,720
80,867,266
674,513,479 ( 6 r3,92s,418) 428r828,982
3l 2t20la
Provision for contingcnt liabilities
Provision for tax
Provision for legal claims
Provision for Disaster rcliefProvision for other claims
Provision for contingent liabilities
Provision for loans engagemcnts
Provision for tax
Provision for legal claims
Provision for Disast€r relicfProvision for othcr claims'l'otal
37,207,67 5
240,378,893
32,75t,858
72.100
63,265,t26
22,534.006
t7 4,160,338
t00,500,000
242,302
22,165,179
( 12,281,765 )( 403,t97 )( 271,636 )(6,407,400)
EGBEnding Brlanco
59,741,681
402,857,466
132,848,661
42,76
79,022,905
373,675,652 320.201,82s ( 19,363,998) 674,5t3,479
3| t2t2019
Chsrged emounts Totrlt04,1t0,569
261,8r 3,683
243,t98,244(3,436,909)
( 208.106 )( 15,923,908)
(3,655,000)
(208, r06)( 20,508,739)
No longcr requircdt04,I I0,569
261,8 r3,683
243,198,244
218.091
4,584,8t I
-lt/12120ltt
Chrrged rmounts(22,534.006)
( t74,760,338)( I00.500,000)
(242,3021(22,165,t79)
Totrl(22,534,OM)
( 174,760,338)
(t00,500,000)
(242,302)(22,t65.179)
( 24,37r,845) 6 t3,925,4 t8
4(r
589,55J,57.1 (J20,201,82s) (.120,20 r,82s)
31. PROVISTONS
Beginningbalance
'l otal
No longer required
ttlrttttlttttttttllll
HOUSING AI{D DE!-ELOPMENT BA}{K (JOINT STOCK COIIPAN_I-)I{OTES TO TgE CONSOLIDATED FI\-..-I\CL{L STA'ITME\TSFOR TIIE \I{R E\DED 3l Dec.mber l0l9
Deferred ta\ assets (liabilities)
Fi\ed assets and lntangible Assets
Total deferred ta\ assct (liabilitl )
Defered income toies have been totali)-. calculaled on the diference of the deferred ta\es under the liabilities merhod using a ta)irare ofl2.5co in Ihe currenl financial year-
-I2. DEFERRED I\CO}IE T.,\\
Deferred income ta\es resulted Fom previous .'-ears tax loss is not recolnized unless there is evected profit la\es ca, be u-sed todecrease the previous years' ta\ loss-
3r/r2D$t9EGP
\611.t121
3 t2aotaEGP{2.89.706)
1671,112t (2.899_706)
Deferred tar assets hilit'i..I rmn.,.fi
Beginning balarces ofthe )earCharged to income statement
Ending balancc of the,vear
31fi2t2019EGP
(2,899,706)
2228231
3t n2D01aEGP
3.61r.765{6.i11.471)
161t,1721 rl-899.706)
I nrccognized deferred tar asse$
Loans impairment proyision e\cluding the 80% during the periodOther items
3ut2a0l9 3Ut2DO1aEGP EGP4ilJ,83J79 ,105.405.644
27,17.114 37.518-068
The deferred ta:i assets related to items previousl3r mentioled were not recognized- and this is due to thar therE is not a reasonablealslrlance to bnefit from i! o. dle existence ofafl appropriale level to ensule the existence ofsufficient futule Ia\ rctums tlroughq'hich it is possible to benefit from tlrcse asets.
3.], REIIRE\iE\T BE\EFIT OBLIG.{TIO\S
3 t2Dot9EGP
3ylzDol&EGP
Retiiemetrt beneftt obligation as recorded ir bslarce sheet :
Medical benefit after retirementTransactioDs ofliabilitie! duritrg the ]ear represelted as followsBalance ar the begin[ing of the ;,earProvided amounts during the year
Current sen'ice cost
Bslance at the end of thc.rear
\[ain actua.ial assumDtion used reDresented iD the folloning:
Discount rateExpected interest rate on assets
Alerage medical cost per individualInflation mte used in medical senices costDeath rales
39.676.t55
36,133.85rr I"876.93(8.63JJ89)
i6.113.851
33.79.3-3,17
9..326.020(6.685.516)
t9.676.155 36..1-?-i.851
Current ycrrve
t0 vo
l0.75Yo13.903t0 0/o
(L.249)
Comp.rison Yearo/o
5"/"10.'75%i2.860
19"/.(A52-49)
The assumptions relared 10 the dealh rate are based oIl the ainounced recommeadalions. statistics. and experience Eglpt.
47
HOUSII{G A]'iD DE\T,LOPMENT BA.|iK (JOINT STOCK COMPANT)
_1{. ettlIALAuthorizcd CapitrlThe authorized capital is EGP,1 000 Billio& the issued and paid up captal is EGP I 265 million rotalin-s 126.5 million share
each share par value is EGP 10.
l. The Bank's extraordinal' general assembly approved on 5/l t/2007 ro increase the authorized capital ftom EGP 1.000million to EGP 3.000 million. and the issued ud paid up capital frolll EGP 550 million to EGP 1.150 million Nith an
increase amounted to EGP 600 million.
The nervslefter subscription had b€en announced on 161012008 for the fiIst fees with an increase amomted to EGP I20million al the fa.:e lalue for the initial shareholders- ard il was completel) accomplished and marked on the bar i'scommercial ledger-
The second phase had be€n announced ftom 2313120rc n[29l0,1.l20l0 and open subscription for the initial shareholders.and till I i/05,/:010 for the nerv sharcholders for 45 million sharcs al par value EGP 20 in addition to 25 piasters (issuanc:e
fee) and 3 million shares have beeo distributed to rhe employees ar par value EGP l0 in addition ro 25 pia-sre6 (issuance
fee) and it wLs completel], accomplished afld marlied on drc baoHs register of commerct on 29/9t1010 so the issued
capital no\a, is EGP l.l50million.
2- The Banli's extraordina4 general assembll' approved on l0/M/2014 to increase the issued and paid up capital from EGP1.150 oillion to EGP lJ65 million b) contribute EGP I 15 million from the Legal res€n'e oflear 2012 bl one share forevery ten share ard ma*ed on $e banl('s register of comlnerce on 14/122014 so the issued and paid up capitai no$ is
EGP l-265 million
3- The Bar i's e$raordinary general assembly approved on 20/122017 to incr€ase the issued and paid up capital from EGP1.265 million to EGP 1.518 million by conhibute ECP 253 million from the General reserve ofthe period eDded 30September 20 t7 b]'oDe share for eveg five shares and rhe procedures bave been talien to be marked on the baili's registerof commerce.
.1-'fheBaDli'se\traordinarygeneralassembll,approvedoo30/4/2018Ioinc:rgasetheissuedandpaidupcapitalfromEGP1.518 million to EGP 1,6{-1.5 million from the legal reserve by one tree sharc for every ten shares anounting to EGP l0per each- with total amount of EGP 126.5 million and the procedures have been tal€n to be madied on the balk's registerof commerce.
\OTES TO TIIE CO\SOLID.{TED F[i.{iCI{L STATL]IIEI{TSFOR THE l-L{R E\DED 3I De.mber 2019
As follot contributors tdho have over thrtr 5y. fruD the isru&ncc cspital:Contributors Nuobcr of
shrr€sNew urban commurdries authority 37713240RIMCO CO. for investrnent 12319998Misr Life insurance company 11283840Misr insurance company 10492492Houses Mutual Fund 9370450Rolaco IGB fo.investments 9151928Eg]ltian endo\rmenB a[horit 6362950
Perceotagc ofcontributio n
29.81e'o
9-740/o
8.92o1o
8-290A1-4t9i'1.3296
5.0396
EGP inthousands
377.132123.200
l r2.838104.9259i.70587 -91763.630
JE
HOUSING AliD DE\ZLOPLf,NT BAriK (JOIliT STOCK COMPAT{I-)\OTES TO TIIE CONSOLIDATED FT]\ {\CI-{L STATEME\'TSFOR THE l-L{R E\-DED 31 Dec.E$er 2019
J5. Rcsenes
Banliing rislis reserveIegal resen eGeneral .resen eSpecial rcserveOther rcservesIFRS rescrves
General risks reserve
Totsl rcsen'cs at the end of the year
llolements in Reserves ar€ preseDted as follori's:
Begionirg bahDce ofthe )'earTransferred from retained eaming
Disposal as a result form selling ofassets reverted to fte hari(
Endi[g balancc ofth. ycar
B- Lcgal rerene
BeginniBg balaoce ofthe yearTransfened tom retained eamings
Amounts reserved for capital increme
Ending balancc ofthe J?ar
C- Gencral resen e
Begi[ning balance ofthc ]earTransferred ftom retained eamings
Amounts resened for capital increase
Ending balance ofthe year
D- Specifll rerene
B€inring balsoce ofthc )'earTransferrcd to Gancral rhks resen'e
Erditrg balanc. ofthe ]'ear
Beginning balatrce ofthe )'earTransfened from renined eamings
Ending balance ofthe tesr
3t t12a0l9EGP
22-500144.847,,195
I.779.m0.m09344966
I8365.606
3Ul2DOt8EGP
18.000.190.105-72?
l . l 3r.000_00014-447 -953r5.853,768
r ,17.23 7. r 0889.215.810
2340.796371 1.799.661.556
3 12t2019EGP
18,000t-500
3lfi2D0l8EGP
l6l-2t I53.737
I l%.948)22500 18.000
3Ut2t20t9EGPl$.1(F.7278l J41.76E
( r 26-500,000)
3l/1212018EGP416.329.094
53.176.633
1.11,8.17..195 490.t05.711
3Ul2n0l9EGP
l.l32o00,filo900,000,m0
( 253,000,000)
3ut2DOt8EGP732000-000400_000.000
1.7?9,000,000 l-132.000-000
3tn2n0t9EGP
1J,4,t7,953(s.104987)
3ut2DOl8EGP
14.447.953
9.3.1{.966 l4-.1,7.953
3t /12t20t9EGP
15,853,7682*51 I,838
3Ut2D0t8EGP
14.546-2051.307,563
r8.365,606 15-853.768
19
\- Gcneral llAnking risk resen e
E- Other resen es
HOTISING AI{D DEIEI,OPMENT B.A.IiK (JOINT STOCK COMPAN}I\OTES TO TIIE COI'SOLID-4.TED FDiAICIAL STATEIIE\TSIoR TI{E IEA.R E\-DED 3l Docember 2019
F- IFRS 9 Resene*
Bcgitroing balatrce of the ) €arTransferred lio$ rgtained earningsTransferred to Genersl risks resen e
Ending balrnce ofthe !ear
BeginDing balarce ofthe J-earTransferred tom reservesTraosferied from
Ending balance ofthe lear
3Ur2notgEGP,41237.r08
3 r2DoraEGP
( I ,17J37.1 08 )
t.tj ll7 t08
3l/r220t9EGP
3t /12t2018EGP
1523{0.095(63.12JJ85)
89r15.8r 0
As illu-strated in Pag€ {4). differences .esulted Aom implementation ofIFRS 9
.16. DI\'IDE\DS DISTRIBT TIO\S
Djvidends distributiom are not recorded until they are approved by the shareholders -eeneral
assembl)'.
Cash and Due fiom central banliDue tor! bantsFinancial assets other than faA value throueh pro6r and loss
3232,9t3.877 8.173-599.042
,rt. ( o\.rt\cE\ r LIL8IL{TIES r\D ( O\t\ T\tE\TS
A- Lcgrl claimsThere are a nu&ber ofexisting cases filed against the bank uithout providing provisions as it's not e{ecied to oalie ar)losses fiom it,
B- Caoital commitmentsThe bark contracts of Capital commitments rcached 931,668-3I2EGP on 3l December 2019 compared to EGP 181-304.918
on comparaJire ] e{r rcsembled in puchasing equipmEnt ard fitting out branches and the top maragement are confidence ingene.aling net profits and in the existence ofavailable liquidilv to cover rhose obligations.
C- Operatitrs compitpeotsThe operating commitments anormting lo EGP 18117.68l h 3l December 2019 against amount ofEGP 2l-888,561 incomparative )Ear and represeffia-q in operating lease contracts.
C- C onrinscnr li.bilities
Letlers of Guaranteel€tters of Credirl-ess:
Collaterals
Contingent liabilities
3tfi2a0r8EGP
1.217-736151180-523-781
(8,1l,{I,t,87I) (247.758-663)
1105367,963 r.150.50r.271
3tA2n0t9EGP716.18'1213
2516,10{,85224.182
3t n2t201aEGP842.706-705
7.330.892-3i7
3Unn0t9EGP
2,001J78,1 0842,fi1,126
5U
6- General risk reserre
3?. CASH A\D CASH f OT'N'.{LE\TS
HOUSNG .{-tiD DE\TLOPTVIENT BA\:I( (JOINT STOCK COMpA-fi})NOTES TO THE CO!{SOLTDATED !-L\-AICIAL STATEME\TSFOR TIIE \TAR E\DED 3l Dccember 2019
-T9. III TT:.{L FT\I)SEl-Tameer \Iutual I undThe board of directors has agreed on l0 September. ?007 to establish accurEulated fund with rcSular dividends dimibutioncalled El-Taameer Mutual Fund for EGP ( 100) miltiorl tBarag€d b! Prime Comper) for Financial lnvestrEents.
The Central Banli of Egl?t has alxeed on 30 Janua.ry, 2008 to establish fte fund under the license no. .{,19 appro\ ed b-'- lheEgl?tian finarcial supen'isorJ authoriq on l8 March 2008
The newsletter subscription for the fund has been announced oo April 14. 2008- the subscription be!n$ at 4 Mal 2008 andended on 5 June 2008 rhe subscription reached EGP l4l, million The baoks podion is 5o,o represented in (50000) ICsainounted to EGP (5) million \ith face value EGP too/share-
The redemplion talue ofthe ceflificale on 3l December 2019 tvas EGP 209.12
lllarr'8rrd FundThe board of dfuectors has a€reed on 27 ,April 2009 to establish dail), accurnulared mutual Fund (Ma$rred) maflaged blPrime Company for Financial lnvestments. The Central Badi ofEg$t has agreed on 9 July 2009 10 establish tre fund underthe license no. 544 approved b), the Eglptian financial supon'isory authoriq' on I 6 Novemtrer 2009. The subscription beexnat 21 December 2009 with banli's portion ofEGP 12 million that repres€nts a share of 5%, presented in 0.986 millioncertificates uilh a nomina.l value of EGP l0 each.
The redemption lalue ofthe ceftificate on 3l December l0l9 uas EGP 26.86.
.10. T.1.\ sTATL s
Pavroll tsrFroEx besitrning ofthe activitr -2007: The Banli's mlary tax has b€en inspected. paid and seftled.
2@&2tq!X The Barili's pa,'roll ta\ has been inspected paid- dispute points has be€n transGrred to the appeal committees.2013-201 7: under inspecrion20I&2019: the banli pa)s the la\ monthl! and p.epaJe the ta\ seflleme s oD the due dates in accordance with la$'no. (91I'l'ear 2005
Stamp dufv tsxThe bark's stamp duD ta\ has been inspecred- paid and settled for the banks' branches till the end of imposing tlre lor*no-( I I I ) for the ]ear 1980 (starDp ta\)- From August l. 2006 lhe law no. ( 143) fo. rhe ),eal 2006 that aoended by larv no.( 1 I 5 ) for the year 2008 has been applied-
The ta\ insp€ction was caried out for fie priod from I Augrst 2006 tilt 3l March 2013, ad dle ta\ differences resulted
ftom rhe uri impections have been paid.
The ta\ inspeaion for the period from I April 2013 till 3l December 2018 has b€eo caried oul in accordurcr \\'ith lfieexecutive instructions issued by tax authority No. 6l for the year 2015, lax final assessment did not ).et rcceived. and the
bar* pays rhe stamp duty regularly on a quafter basis
The r&x inspection for the ),ears folm t Janua-v 2019 till 31 Decernber 2019 did not )Et caried oul the bank pa]'s the stamp
duty regulady on a quarterly basis.
CorDorate Ipcome taxl9m - 2004: Ta\ inspection has been completed and settled.
2@:2@Z: Ta\ iispection has been completed and s€nle4 ta)( differences have been paid- and appeal comminee decision
has been issued and the dispute has been transferred to the epeal court.
20q]!:4I!: Tax inspection has b€en compteted and settled- tax differeoces have been paid and appeal committee decision
has been issued and the dispure has been llaflsferred to the +peal court.
2013 -2014: Ta\ inspection has been completed and settled and the intemal cornmittee has been completed. and the disputeshas been transferred to the appeal court.
2Ol! 2017: Ta\ inspection completed. intemal committee piocedutes arc in process.
20r 8 : The bar i's has submitted its ta\ rctum under tax income larv no- (91) Year 2005 ad is amendmeff orr duedates and the ta\ has paid and still did not yet ta,( inspected.
il