Commercial Int Bank - Re Tax Law Change, etc.

RNS No 0941r
COMMERCIAL INTERNATIONAL BANK (EGYPT) SAE
30th April 1998


The Egyptian Parliament has adopted a change to Tax Law No.157 for 1981 on
January 22, 1998.  The change was incorporated in Law No.5 for 1998.  It
affects, among other issues, the deductibility of interest income on securities
which was previously 90% deductible.  Under the amended tax law, any interest
cost related to funding the securities must be netted against the interest
income received from the funded securities to calculate the net allowable
deductible.

As Commercial International bank (Egypt) S.A.E. ("CIB") was using its portfolio
of treasury and corporate debt securities to manage its tax liability, the
change in the tax treatment of these instruments will result in a significant
increase in the Bank's effective tax rate starting from the current fiscal year
ending December 31, 1998.

As the detailed calculation formula set by the Egyptian Tax Authority has not
yet been announced, CIB, based on its external tax audit advice, has provided
for its tax liabilities on a very conservative basis for its first quarter
financial results to March 31, 1998.  This resulted in a drop of net profits to
EGP 47.0 million as compared to EGP 67.7 million for the same quarter of the
previous year due to an increase in tax provisions from EGP 1.7 million in Q1,
1997 to EGP 24.5 million in Q1, 1998.

Our financial results for the first quarter of the year ending March 31, 1998
will be sent under separate cover.

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