Regulatory Alerts2021-01-11
Added · Updated
Circular dated January 11, 2021 regarding banks’ distribution of cash dividends in light of the continuing Corona crisis
The Central Bank of Egypt prohibits banks from distributing cash dividends from current and/or retained distributable profits to shareholders to strengthen capital bases amid the ongoing COVID-19 crisis. The circular permits banks to continue distributing dividends to employees and paying management bonuses for the year 2020.
Cairo: January 11, 2021
Dear Chairman of the Board,
Greetings,
In light of the continued crisis of the spread of the Corona virus (COVID-19) on the Egyptian economy, and considering the severe impact of this crisis on the financial position of banks, and the need to ensure the safety of the monetary and financial system, and the need to strengthen banks' capital bases during the current period, the Board of Directors of the Central Bank of Egypt, in its meeting held on December 27, 2020, has decided the following:
"Banks are not permitted to carry out cash distributions from current profits and/or retained profits eligible for distribution to shareholders, in order to strengthen the capital base of banks to face potential risks resulting from the continued spread of the COVID-19 virus, while allowing the carrying out of distributions to employees as well as the payment of the Board of Management's bonus for the year 2020."
Please accept our highest regards,
Tarek Amer