Egypt’s Housing Bank sees 51.34 points on First Bank financial soundness index

1/1/2023 6:33:11 PM

Housing and Development Bank Egypt has been seen scoring 51.34 points by the end of the first half of 2022 on First Bank’s financial soundness index, compared to the sector average of 50 points.

The financial soundness index set by First Bank, measures the strength and soundness of the banks' financial positions and their ability to preserve the funds of depositors and shareholders

The financial soundness index is based on six measures: the capital adequacy ratio, the financial leverage ratio, assets to deposits ratio, shareholders equity to deposits ratio, loans to deposits ratio and non-performing loan ratio.

HDB’s capital adequacy ratio reached 22.38 % at the first half of 2022, while the average rate of banks operating Egypt was at 20.9% during the same period, exceeding the regulatory limits set by the Central Bank of Egypt which are consistent with Basel Accord of 12.5.

The bank has been ranked fifth on First Bank list of the top banks in terms of capital adequacy ratio on H1-22. The analysis included 20 banks operating in the Egyptian banking sector for which financial statements were made available.

Moreover, the bank’s financial leverage ratio recorded 8.98% at the end of June 2022 below the average rate of banks operating Egypt of 6.9 %. The financial leverage ratio reflected the relation between tier I used in capital adequacy ratio and the bank’s non-risk-weighted assets exceeding the regulatory limits set by the Central Bank of Egypt which is consistent with Basel Accord of 3 %.

However, the bank’s ratio of non-performing loans to total loans portfolio recorded 9% in H1-22 higher than an average of 3.2 % of the total banking sector.

In addition, the bank’s assets to deposits ratio declined below the banking sector average recording 116.58% at the end of June 2022, compared to an average of 136.20% of the total banking sector during the same period

However, the bank’s shareholders equity to assets ratio recorded 12.06% at the end of June 2022 exceeding the average of the total banking sector which was set at 9% during the same period.

Furthermore, HDB’s loans to deposits ratio recorded 39.83% at the end of June 2022, compared to an average of 48.5% of the total banking sector at the end of the same period.