Riyad Bank will increase its capital by issuing Sukuk
Riyad Bank has begun offering a Sukuk in riyals to raise its tier 1 capital as part of a $2.7 billion (SAR 10 billion) Sukuk program.
Sukuk details
The bank said that the details of the Sukuk, including the amount and terms, will be decided later based on market conditions.
This Sukuk offer is designed to strengthen the bank’s capital and support its general banking activities. It will only be available to institutional and qualified clients.
Riyad Bank has appointed Riyad Capital as the main manager for the Sukuk issuance.
Riyad Bank, which is 21.8% owned by the Public Investment Fund (PIF) and 10.4% by the Saudi government, mentioned that the minimum amount needed to invest in the Sukuk is $66,592 (SAR 250,000).
The Sukuk subscription period is from January 7 to 16.
The Sukuk are perpetual, meaning they don’t have a fixed end date. However, they might be redeemed in certain situations, as explained in the official offering document.
Previous Sukuk Issue
Last September, Riyad Bank raised $750 million by issuing a US dollar-denominated Tier 1 capital sustainable Sukuk. These Sukuk are permanent, can be called back after 5 years, and offer a 5.5% annual return.
Third-Quarter Performance
Riyad Bank’s net profit for the third quarter of 2024 grew by 27%, reaching $706.7 million (SAR 2.6 billion), compared to $556.3 million (SAR 2.1 billion) during the same period last year.
This strong profit increase was mainly due to higher total operating income and lower operating expenses.
Published: 7th January 2025
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