CBE allows banks to include net interim profits within the core capital adequacy ratio
First Bank
The Central Bank of Egypt disclosed a decision allowing banks operating in the Egyptian banking sector to incorporate net interim profits into Tier 1 core capital after a limited examination by the financial statements' auditor, offsetting interim losses if present.
This announcement, issued by the Central Bank of Egypt, stated the following, referring to the minimum requirements for the capital adequacy ratio outlined in the periodic circular dated December 24, 2012, and the periodic circular dated February 27, 2017, concerning the treatment of interim profits/losses within the supervisory capital account under the capital adequacy ratio.
Furthermore, in the context of CBE's efforts to implement international best practices in banking supervision, it is worth noting that Basel III regulations included several regulatory reforms and new treatments for some components of the supervisory capital, including allowing banks to incorporate net interim profits/losses into the Tier 1 core capital instead of additional capital.
Based on the above, CBE's Board of Directors decided in its meeting held on October 24, 2023, the following:
• Within the capital adequacy ratio, banks are allowed to include net interim profits in Tier 1 core capital after a limited examination by the bank's auditor, offsetting interim losses if any.
