Cairo: April 17, 2016

To: Mr. Chairman of the Board of Directors

Tahya Misr Bank

Greetings,

In the context of striving to apply international best practices, particularly the requirements of the Basel Committee, and with the aim of enhancing capital requirements necessary to protect banks and ensure coverage of losses that may arise for them or during periods of stress or crises for Egyptian banks, and in accordance with the supervisory instructions issued by the Financial and Economic Affairs Committee regarding "The minimum standard for capital adequacy" on December 24, 2012, the Board of Directors of the Central Bank of Egypt, in its session held on April 7, 2016, approved the implementation of the Capital Conservation Buffer ratios starting from the year 2016, as follows:

1. The conservation buffer is formed from the bank's annual profits as an additional independent reserve for the continuous Tier 1 capital, and thus to the total standard, according to the following table:

	Item
	January
	2016
	January
	2017
	January
	2018
January
2019	Continuous Tier 1 Capital
	4.5%
	4.5%
	4.5%
4.5%	Conservation Buffer
	0.625%
	1.250%
	1.875%
2.5%	Additional Tier 1 Capital
	1.5%
	1.5%
	1.5%
1.5%	Tier 1
	+ Conservation Buffer
	6.625%
	7.25%
	7.875%
8.5%	Tier 2
	4%
	4%
	4%
4%	Capital Adequacy Standard
	10%
	10%
	10%
10%	Total Capital Adequacy
	+ Conservation Buffer
	10.625%
	11.250%
	11.875%
12.5%

2. The general rule is that the conservation buffer is formed from annual profits; however, formation is permitted if there are components of continuous Tier 1 capital that satisfy this, with reference to the Central Bank of Egypt.

3. When using part or all of the conservation buffer, the Central Bank of Egypt may impose restrictions on profit distributions equal to the amount used from the conservation buffer to reach the ratios required to be formed according to the previous table, provided that the bank submits a concept to the supervision and oversight sector of the Central Bank of Egypt containing the expected plan to rebuild that buffer again.

4. Banks operating in Egypt must commit to applying these instructions starting from January 1, 2016, for banks that prepare their annual financial statements as of the end of December of each year, and starting from July 1, 2016, for banks that prepare those statements as of the end of June of each year, in order to reach the required total ratio of 2.5% in January/July 2019.

Please be kind enough to alert regarding taking the necessary action to implement the aforementioned decision.

Sincerely,

Gamal Naguib