The Lebanese Central Bank issued on November 5, 2020 intermediate circular 575 related to the regulatory framework of capital adequacy of banks operating in Lebanon. The circular amends basic decision 6939 related to basic circular 44. In details, the circular added to decision 6939 article 8 bis under which it consented banks to book exceptionally one third of the capital gains arising from the revaluation of fixed assets held in settlement of debt under tier 2 capital conditional upon:

1-    BDL’s central council investigating and approving at the expense of the concerned bank the validity of the revaluation process.

2-    Raising the capital before December 31, 2021 as follows:

• Add a maximum of one third of the revaluation gains under tier 2 capital
• Increase common equity tier 1 capital in cash by an amount at least equivalent to the amount of the revaluation gains booked under tier 2 capital
• The revaluation and capital increase must be completed before December 31, 2020