The Central Bank of Egypt (CBE) has issued a circular for banks on subordinated loans dedicated to shore up banks’ Tier-2 capital, either granted by shareholders, the CBE or international institutions. The CBE stated that in order to include these loans in Tier 2 capital, they must be unconditional and not lent against any specific asset and also not dedicated to a specific activity or sector. Banks should also process these loans in the same way they would process financing granted by the CBE. A number of local banks have entered into loan agreements with international institutions recently, according to Al Mal, including Banque Misr (which has reportedly signed agreements for USD500mn from the Industrial and Commercial Bank of China and USD350mn from Credit Suisse) and the National Bank of Egypt (NBE) that borrowed a total of USD1bn from China. (CBE disclosure, Al Mal)