Regulatory Alerts2016-04-17
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Circular dated April 17, 2016 regarding the precautionary pillar
The Central Bank of Egypt mandates the implementation of a capital conservation buffer for Egyptian banks starting in 2016, requiring banks to build the buffer from annual profits to maintain core Tier 1 capital ratios. The buffer is phased in from 0.625% in January 2016 to 2.5% by January 2019, increasing the total minimum capital adequacy requirement from 10% to 12.5%. Banks are prohibited from distributing profits equivalent to the amount used from the buffer and must submit a plan to the supervision sector for rebuilding it. Compliance deadlines are set for January 1, 2016, for banks with fiscal years ending in December, and July 1, 2016, for those ending in June.
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