Regulatory Alerts2012-05-13
Added · Updated
Approval of Supervisory Instructions to Enforce the Prohibition on Banks Holding Shares in Non-Financial Companies Exceeding 40% of Issued Capital
The Central Bank of Egypt mandates that banks holding shares in non-financial companies exceeding 40% of issued capital must recognize impairment losses on the excess amount if not divested within one year of acquisition. These losses, calculated based on current accounting rules, must be recorded in the income statement starting July 1, 2010, reducing the book value of the shares. The regulation specifies that new acquisitions exceeding this threshold are limited to shares acquired through debt settlements, and provides detailed calculation examples for determining the additional impairment charges.
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