Capital Adequacy Regulatory Framework for Banks Operating in Lebanon

Circular No. 741 To Banks, Financial Institutions, and Supervisory Authorities

We enclose herewith a copy of Circular Decision No. 13748 dated September 10, 2025, concerning the amendment of the Basic Decision No. 6939 dated March 25, 1998 (The Regulatory Framework for the Capital Adequacy of Banks Operating in Lebanon) attached to Basic Circular No. 44.

Beirut, September 10, 2025 Governor of the Central Bank of Lebanon Karim Saeed

Circular Decision No. 13748 Amending Basic Decision No. 6939 dated March 25, 1998

The Governor of the Central Bank of Lebanon, pursuant to the Monetary and Loan Law, particularly Articles 70, 174, and 175 thereof, and pursuant to Basic Decision No. 6939 dated March 25, 1998, and its amendments concerning the Regulatory Framework for Capital Adequacy of Banks Operating in Lebanon, and pursuant to the resolution of the Central Council of the Central Bank of Lebanon adopted in its session held on September 3, 2025, hereby decides as follows:

Article One: The text of Clause (1) of "Article Six repeated" of Basic Decision No. 6939 dated March 25, 1998 is repealed and replaced with the following text: «(1) The non-distribution of profit shares on the rights of ordinary shareholders for the financial years 2019 and 2020, 2021, 2022, 2023, 2024, and 2025.»

Article Two: The text of "Article Eight" of Basic Decision No. 6939 dated March 25, 1998 is repealed and replaced with the following text: «First: Banks may fully revalue their real estate assets (land and buildings) wholly owned by them and real estate assets wholly owned by real estate companies in which these banks hold shares, in accordance with the provisions of Article 153 of the Monetary and Loan Law, annually, for a period ending on December 31, 2026. Second: Up to 75% of the revaluation gain resulting from the aforementioned revaluation may be accepted, within core tier 1 capital, for ordinary shareholders, subject to the following two concurrent conditions: (1) The Central Council of the Central Bank of Lebanon verifies and approves, at the expense of the concerned bank, the validity of the revaluation process. (2) The revaluation process is completed within a maximum deadline of December 31, 2026. (2) The assets subject to this article are valued in US Dollars (Fresh Dollar), and recorded in Lebanese Lira based on:

• A rate of 1,507.5 Lebanese Lira per one US Dollar effective from December 31, 2022 until January 31, 2023.
• A rate of 15,000 Lebanese Lira per one US Dollar effective from February 1, 2023 until January 31, 2024.
• A rate of 89,500 Lebanese Lira per one US Dollar effective from February 1, 2024 until May 31, 2025.
• The announced rate on the platform approved by the Central Bank of Lebanon effective from June 1, 2025.»

Article Three: The text of "Article Eight repeated" of Basic Decision No. 6939 dated March 25, 1998 is repealed and replaced with the following text: «First: Up to 75% of the revaluation gain resulting from the revaluation of fixed assets held as collateral for debts may be accepted, within core tier 1 capital, for ordinary shareholders in accordance with Article 154 of the Monetary and Loan Law, subject to the following concurrent conditions: (1) The Central Council of the Central Bank of Lebanon verifies and approves, at the expense of the concerned bank, the validity of the revaluation process. (2) The revaluation process is completed within a maximum deadline of December 31, 2026. Second: The assets subject to this article are valued in US Dollars (Fresh Dollar), and recorded in Lebanese Lira based on:

• A rate of 1,507.5 Lebanese Lira per one US Dollar effective from December 31, 2022 until January 31, 2023.
• A rate of 15,000 Lebanese Lira per one US Dollar effective from February 1, 2023 until January 31, 2024.
• A rate of 89,500 Lebanese Lira per one US Dollar effective from February 1, 2024 until May 31, 2025.
• The announced rate on the platform approved by the Central Bank of Lebanon effective from June 1, 2025.»

Article Four: This decision takes effect immediately upon its issuance. Article Five: This decision is published in the Official Gazette.

Beirut, September 10, 2025 Governor of the Central Bank of Lebanon Karim Saeed