Chapter One: Capital Adequacy Standard

Part Two: The Capital Base

1/2 General Application Conditions

1/1/2 Credit centers are excluded from non-recognized assets and those deducted from the capital base, as well as assets included in trading portfolios and those subject to market risk deductions.

2/1/2 Adjustments are included in the standard as approved by the General Assembly of the Bank, without prejudice to the right to request the Central Bank of Egypt to adjust the data of the adjustments at the Bank level, with the same treatment applied to paid-up capital.

3/1/2 Banks must obtain prior approval from the Central Bank of Egypt to include instruments in the regulatory capital, emphasizing compliance with the conditions and standards of the mentioned inclusion.

4/1/2 The hedge component is prepared from the bank's annual reserves as an independent disclosure of the Common Equity Tier 1 from the first pillar of the bank's capital base, and thus according to the following table:

Item	January 2016	January 2017	January 2018	January 2019
Common Equity Tier 1	4.5%	4.5%	4.5%	4.5%
General Hedge Component	0.625%	1.250%	1.875%	2.5%
Common Equity Tier 1 + Hedge Component	6.625%	7.25%	7.875%	8.5%
Item	January 2016	January 2017	January 2018	January 2019
Second Pillar	4%	4%	4%	4%
Capital Adequacy Standard	10%	10%	10%	10%
Total Capital Adequacy Standard + General Hedge Component	10.625%	11.250%	11.875%	12.5%

5/1/2 The hedge component must be prepared from annual reserves, provided that the components of Common Equity Tier 1 are available, as well as for the Central Bank of Egypt.

6/1/2 When using or all of the hedge component, the Central Bank of Egypt imposes conditions on the distribution of reserves, specifically by the amount it uses from the hedge component to reach the ratio required to be formed according to the table above, provided that the bank submits a regulatory approval and acknowledgment to the Central Bank of Egypt confirming the expected capacity to form that component by the end.

7/1/2 The supplementary deposit (deposit) must not exceed 50% of the total of the first pillar.

8/1/2 The bank is committed to submitting all financial investments for permanent purposes every year, and for temporary purpose investments, submitting an annual income report. This inclusion is considered a basis for recognition in the bank's capital base when issuing those instructions.

9/1/2 The bank's investments in financial or non-financial entities must be by shares and after deducting options contracts held by the bank to cover potential losses that may arise from those investments.

10/1/2 Regulatory Adjustments to Capital:
1/10/1/2 Elements deducted/not recognized "at full value" as of December 2012 for the following items:

• Goodwill.
• Treasury shares.
• General banking risk provisions.
• Fair value adjustments for held-to-maturity financial investments.
• Translation differences of functional currencies.
• The bank's investments in non-financial entities, without commitment to the settlement method provided in item (1/4/2).
• Deferred tax assets.
• Assets acquired by the bank in settlement of debts with general banking risk provisions.

2/10/1/2 Elements deducted/not recognized temporarily over five years for the following items according to the table below:

• Intangible assets (except Goodwill).
• Net future profits resulting from securitization operations.
• Pension plan benefits.
• Deferred tax assets.
• The bank's investments in financial entities and insurance (shares only) in each of its investment funds or innovative financial instruments, without commitment to the settlement method provided in item (6/3/1/2/2).
• Fair value adjustments for cash flow hedges.
• Fair value adjustments for net investment in a foreign operation.
• Fair value adjustment for the change in the bank's own credit rating.

Jan 1, 2014
Jan 1, 2015
Jan 1, 2016
Jan 1, 2017
Jan 1, 2018	100%	80%	60%	40%	20%

3/10/1/2 Elements deducted/not recognized temporarily over seven years for investments. Investments are excluded temporarily for the bank's investments in financial entities and insurance (shares only) according to the ratios in the table below, without commitment to the settlement method provided in item (6/3/1/2/2).

Year
2012
2013
2014
2015
2016
2017	20%	20%	20%	20%	10%	10%

2 The bank in financial entities and insurance (shares only) as follows:

2/2 Tier One

Tier One consists of two components as follows:
1/2/2 Component One: Common Equity Tier 1
2/2/2 Component Two: Additional Tier 1 Capital (Going Concern) 3/2/2 Component One: Common Equity Tier 1 works as follows:

$$ \frac{\text{Total Common Equity}}{\text{Total Risk-Weighted Assets}} $$

2 As of the end of December each year for banks whose financial statements are prepared on that date, and as of June of the following year for banks whose financial statements are prepared on that date.

a- Compared to the beginning of the second fiscal year starting from the date of the bank's establishment.

b- Represents its value at the date of valuation equal to the remaining assets after deducting the priority assets in the order and preceding them in the ranking (as they are not fixed assets, amortized, or not fixed or at par value).

c- Considered a capital asset until it is paid at the valuation date (considering that the operation is legally permitted and/or in accordance with the instructions of the Central Bank of Egypt regarding capital deductions).

d- The bank must not issue exemptions in the issuance of contracts or agreements to prepare a book value or remove those shares, or revalue them, or cancel them, and must not be contractually obligated to provide any indication to that effect except at valuation.

e- Profits from distributable elements (including retained profits) are not distributed by any method, and those distributions do not reduce the paid-up capital at issuance, nor do those distributions exceed the highest at contract (except in cases where the bank is unable to pay distributions exceeding the level of distributable elements).

f- Distributions are not mandatory to the extent that the failure to distribute does not represent a default for the bank.

g- Distributions are deducted after meeting all legal and contractual obligations and contingent liabilities for priority payment instruments (Preferred Shares).

h- Represents the issued capital that bears the largest share of losses when they occur, and it is from the capital components with the highest capacity to absorb losses continuously in proportion to their value and equally without them.

i- Considered paid-up amount recognized from equity instruments as capital (it is not recognized as a liability).

j- Classified as equity in the group of financial statement preparation and presentation standards and recognition and measurement bases.

k- Issued and deducted by fees from subscribers, and the bank does not finance the issuance of those shares except by fees or non-fees.

l- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment.

m- Issued with the approval of the General Assembly of the bank's shareholders, or according to the first priority, or by a decision of the board of directors or others with the same authority as the General Assembly of shareholders, and in a group permitted by law.

n- Shown in the bank's balance sheet as equity and in a separate manner.

2/1/2/2 Common Equity Tier 1 consists of the following:
1/1/2/2/2 Issued and Paid-up Capital: Consists of ordinary shares that make up the bank's capital and are fully paid, and meet the general conditions mentioned in item (1/1/2/2).
2/1/2/2/2 Retained Earnings (Losses): Consists of retained earnings (accumulated losses) from previous annual earnings (accumulated) for the preceding year, and also includes earnings (losses) of the preceding year, on the basis that the balance sheet is not affected by profit distributions except at the date of approval by the General Assembly of the bank in the following year after the year the financial statements are prepared. 3/1/2/2/2 Retained Earnings / Annual Profits: The capital adequacy standard requires banks to include net retained earnings in Common Equity Tier 1 in the first pillar after a grace period for monitoring the preparation of the bank's financial statements, without deducting retained losses (if any).

4/1/2/2/2 Adjustments

And works as follows:

• Legal Adjustment: Includes the value of the issuance of treasury shares and the profits resulting from the sale or issuance of or inclusion of equity instruments of the bank from this item by equity fees.
• General Adjustment.
• Professional Adjustment (if any).
• Capital Adjustment.

3 As of the last December of each year for banks whose financial statements are prepared on that date, and as of June of the following year for banks whose financial statements are prepared on that date.

4 Other adjustments are classified under "elements not recognized" or "Tier Two."

3/1/2/2 Elements deducted from Common Equity Tier 1:
1/3/1/2/2 Treasury Shares: Treasury shares purchased by the bank (or those purchased on its behalf) must be deducted from the capital adequacy standard, due to contractual obligations that the bank is bound to, especially those resulting from shareholder fees or non-fees.

2/3/1/2/2 Intangible Assets: Include goodwill, software, patents, trademarks, and rights arising from management contracts and ownership rights, licenses, and trademarks or any similar elements.

3/3/1/2/2 Net Future Profits Resulting from Securitization Operations: Represents the return on bond sales subject to securitization, which are denominated over several years, and which result in an increase in ownership or the bank's assets issued for the securitization operation.

4/3/1/2/2 Pension Plan Benefits: To the extent that the funds allocated for pension plans exceed the benefits estimated for employees of the bank after the end of their service if the contributions paid exceed the accrued contributions before the balance sheet date, and the bank must recognize that increase as an asset (prepaid expense), which is deducted from Common Equity Tier 1 (if any), and that the assets arising from pension funds cannot be used except for the purpose for which they were created, and the accrued benefits for bank employees are not considered a liability to depositors or other creditors of the bank.

5/3/1/2/2 Deferred Tax Assets (Temporary Deductible Differences):
This item includes the value of temporary differences that the bank expects to recover in future periods, and deferred tax assets are recognized to the extent that it is expected that there will be future taxable profit sufficient to offset the temporary deductible difference regarding:

a- Temporary deductible differences in future periods, examples include:

• Differences in the book value of tangible assets based on the basis of the value of those assets based on the deferred basis.
• Differences in the book value of intangible assets based on the basis of the value of those assets based on the deferred basis.
• Other provisions other than income tax provisions.
• Profits not recognized from the preparation of the valuation of financial investments listed on the stock exchange at fair value.
• Impairment losses of financial investments required to be prepared as of the valuation date, as well as financial investments in affiliated and associated entities.

b- Unused recognized deferred tax losses and carried forward for the following periods.

6/3/1/2/2 Investments in Financial Entities and Insurance:

• First Condition: If the bank's investments in shares of financial entities and insurance represent 10% or more of the issued capital of each entity individually, the value of the excess is deducted.
• Second Condition: Comparing the total of investments that are not deducted in the first condition with 10% of the bank's Common Equity Tier 1 after regulatory capital adjustments, the value of the excess (if any) is deducted from the mentioned ratio (10%).

4/1/2 Elements not recognized when calculating the capital base:
1/4/1/2/2 General Banking Risk Provisions: Work as follows:
a- Based on the rules regarding the increase in the provision for impairment loss, equal to the value of the provision for impairment of credit evaluations of transactions and the formation of impairment provisions included in the financial statements based on the preparation and presentation standards of financial statements and recognition and measurement bases.

b- 10% of the value of assets acquired by the bank in accordance with the Central Bank Law and the authorized currency exchange law during the periods according to the law issued by Law No. 88 of 2003.

2/4/1/2/2 Fair Value Balance / Held-to-Maturity Financial Investments: Consists of valuation differences resulting from revaluation of fair value of held-to-maturity financial investments, and the bank's instructions issued in 2009 regarding the preparation and presentation standards of financial statements are taken into account in this item, and they are treated with the continuous standard if the capital is positive, with 45% of the Common Equity Tier 1 deducted, and 45% of it taken from Tier Two if it is negative.

3/4/1/2/2 Translation Differences of Functional Currencies: Common Equity Tier 1 is deducted if positive, and 45% of it is taken from Tier Two if negative.

4/4/1/2/2 Fair Value Adjustments for Cash Flow Hedges: Recognized from equity to the preparation and presentation standards of financial statements and recognition and measurement bases from changes in the fair value of assets designated and effective for hedging cash flows, and profits (losses) related to the non-hedging component in the income statement (net income of the transaction) are also recognized, and the amounts accumulated in equity from fair value adjustments for cash flow hedges are transferred to the income statement in the same periods in which the bank is expected to affect profits and losses, and profits and losses related to the non-hedging component of currency swap contracts and options are transferred to net income of the transaction.

5/4/1/2/2 Fair Value Adjustments for Net Investment in a Foreign Operation: Recognized from equity to the preparation and presentation standards of financial statements from changes in the fair value of assets designated and effective for hedging net investment in a foreign operation, and profits (losses) related to the non-hedging component in the income statement (net income of the transaction) are also recognized, and the amounts accumulated in equity from fair value adjustments for net investment in a foreign operation are transferred to the income statement in the same periods in which the bank is expected to affect profits and losses, and profits and losses related to the non-hedging component of currency swap contracts and options are transferred to net income of the transaction.

6/4/1/2/2 Fair Value Adjustment for Change in the Bank's Own Credit Rating:
Its value is not recognized in Common Equity Tier 1, and it represents the bank's own valuation and its ability to meet its obligations. The lower the bank's rating, the higher its financing costs, and thus it affects the bank's obligations in general (depositors), and that the recognition of changes in credit losses on the bank's liabilities affects all its capital and may have negative consequences on the rights of creditors and those who have contractual relationships with the bank, and the potential negative effects materialize in the recognition of credit losses and their increase, and the valuation has an internal effect on the bank's obligations, especially when the bank's credit rating deteriorates as a whole or otherwise when the bank's own credit evaluations occur.

2/2 Component Two: Additional Tier 1 Capital

1/2/2/2 General Standards for Inclusion in Additional Capital:

a- Issued and fully paid-up.

b- Does not rank ahead of depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the order of equity below depositors, creditors, and supplementary deposits in the event of liquidation.

c- Unencumbered and not pledged as collateral by the issuing bank or its affiliated banks, or does not reduce any other legal or economic arrangements that give it priority in payment before creditors.

d- Perpetual (no maturity date) and does not include any feature that makes it redeemable.

e- May be redeemable after a certain period from its issuance, but not less than five years from the date of issuance, with commitment to the following:

• Obtaining approval from the Central Bank of Egypt before exercising the redemption option.
• The bank must not take any action that leads to the expectation of exercising the redemption option.
• The bank does not exercise the redemption option unless the replaced instruments are capital from the same class or higher, and the replacement process is consistent with the bank's income or reverses the capital adequacy standard after exercising the redemption option to higher levels than the minimum requirements.

f- The payment of the instrument's value (either through issuance or redemption) may be subject to prior approval from the Central Bank of Egypt.

g- Profit Distributions:

• The bank must always have the full right to cancel profit distributions at any time.
• The cancellation of estimated distributions is not considered a type of default.
• Banks are allowed to cancel distributions to meet their obligations at their due dates.
• There are no restrictions on canceling profit distributions for banks, except those related to distributions related to ordinary shares.

h- Distributions must be paid from distributable elements.

i- In the event of a change in the bank's credit rating, those instruments do not attach advantages in distribution.

j- Those instruments do not represent a liability exceeding the bank's assets when the balance sheet is legally declared bankrupt.

k- The issued instruments may be classified as liabilities for the purpose of preparing and presenting financial statements, with the ability to absorb losses through either the conversion of ordinary shares at a predetermined date or a mechanism to reduce losses corresponding to those financial instruments at a predetermined point, and the reduction process has the following effects:

• Reduction of the value of the financial instrument at valuation.
• Reduction of the paid amount when exercising the redemption option of those instruments.
• Full or partial reduction of distributions on those instruments.

l- The bank and its affiliated banks (which have a real interest in them) do not include those instruments or finance their purchase except by fees or non-fees.

m- The instruments may not be a class that increases the cost of capital, such as the issuance of indices that compensate investors in the form of financial instruments with a price below par through a time index.

n- If the instruments were issued by the affiliated entity (such as: a special purpose vehicle SPV) or the bank that represents a holding company in the issuing group, the value of the instruments must be constant in the group and without restrictions on the affiliated entity (the special purpose vehicle SPV) or the holding company in the issuing group, provided that it meets all other standards for inclusion in Additional Tier 1 of the first pillar of capital.

2/2/2/2 Additional Tier 1 Capital consists of the following:
1/2/2/2/2 Permanent Non-Cumulative Preferred Shares: These are the bank's issued and fully paid-up shares that meet the inclusion conditions in Additional Tier 1 Capital.

2/2/2/2/2 Minority Interest: Represents the share of investors in the group that the bank does not own, directly or indirectly, in the net assets of its affiliated entities and in the net results of operations or that component of the financial instruments of the affiliated entity that the parent entity does not own, and which belongs to other investors, and is included in the balance sheet of the parent bank to reflect the ownership interest in the assets owned by its investors and non-controlling shareholders. Although minority interest can support the group's profits, it cannot support the group's overall profits, but in some cases it can represent support especially in affiliated entities with little or no profits, so in these cases it can be included in Additional Tier 1 Capital, and it is included in full or a portion of it with prior approval from the Central Bank of Egypt.

3/2/2/2/2 Difference Between the Present Value and the Future Value of the Supplementary Deposit: At the time the bank receives a deposit (deposit) from shareholders, the deposit (deposit) provided by the bank's shareholders is recorded as the bank's obligations at the following value, discounted using a discount rate equal to the yield on government bonds with a maturity similar to the deposit (deposit) at the beginning of the validity of the deposit (deposit) contract, and the difference is recorded as a separate item in equity called "Difference Between the Present Value and the Future Value of the Deposit (Deposit)," and it is not used except with the approval of the Central Bank of Egypt.

3/2 Tier Two

1/3/2 General Standards for Inclusion in Tier Two:

a- Issued and fully paid-up.

b- Ranks in the

---

[RegAlert note: the English text above is a translation of the first 24,000 characters of a 29,552-character original (81% of the document). The remainder was not translated. The complete original-language text is stored with this document.]