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Baraka Bank clarifies impact of income tax law amendments on its results

Baraka Bank clarifies impact of income tax law amendments on its results

ArabFinance: Al Baraka Bank – Egypt (SAUD) responded to the Egyptian Exchange's request to clarify the impact on the Bank's financial results on the back of the proposed amendments to income tax law with respect to the change in tax treatment of the sovereign portfolio.

In light of the current limited information availed to us, and the tax treatment formula proposed by the Ministry of Finance, as well as the agreement between the Federation of Egyptian Banks and the Ministry in applying said tax treatment to new sovereign issuances only, and not on a retroactive basis, Al Baraka Bank would like to note that the proposed tax amendment will not have an effect on 2018 financial results.

However, our 2019 projected profits reveal a decline ranged 5% to 7% depending. It is worth noting that the Federation has stressed in its recommendations that loan loss provisions should not be included within the tax treatment as it is related to credit losses from banking operations only, and not related to the sovereign portfolio.

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