INTERVIEW: Covid-19 halts bank pay-outs

INTERVIEW: Covid-19 halts bank pay-outs

In a move designed to protect the Egyptian banking sector's liquidity during the coronavirus pandemic, the Central Bank of Egypt (CBE) has decided to ban the country's banks from distributing cash dividends among shareholders.



The banks are not permitted to "distribute dividends from this year's profits or retained profits to shareholders,“ CBE Governor Tarek Amer said.



Radwa Al-Swaify, head of research at Pharos, an investment bank, said the decision was meant to help the banks comply with Egypt's Banking and Central Bank Act, which stipulates that the country's banks should have capital requirements of a minimum of LE5 billion in less than three years.



It will also help the banks to accumulate retained profits, which will assist them in increasing their capital before the deadline and improving their capital ratios, she added.



The decision was issued in the wake of the continuing coronavirus crisis on the local and global levels, the CBE said, stating that the amount of economic damage was not yet clear, particularly as the pandemic was far from over.



The CBE made the move as part of its role in preserving the safety of the monetary and banking system and