News Details

CBE Prohibits Banks from Paying Cash Dividends due to COVID-19 Crisis

13/01/2021

The Central Bank of Egypt (CBE) has issued a decision to ban banks from paying dividends to shareholders. The decision is aimed at protecting the capital of banks against the potential risks of (COVID-19) crisis. (CBE Release) Analyst Comment: The move aims to help banks comply with the new capital requirements introduced under the Banking and Central Bank Act which requires banks to increase their capital reserves to EGP 5bn within a three year grace period to comply. Paying out less in dividends will reduce the need for banks to enact capital increases. On the other hand, banks will still be able to issue stock dividends to make up for the lack of cash payouts.

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