Saudi Awwal Bank Raises Over $1 Billion in Sukuk Offering
Saudi Awwal Bank (SAB) announced on Thursday that it has raised $1.06 billion through a riyal-denominated sukuk (Islamic bond) offering via private placement. The offering was split into two parts.
Details of the Sukuk Offering
- The first part of the offering was worth $971.3 million (SAR 3.65 billion).
- The second part was valued at $93.1 million (SAR 350 million).
This sukuk issuance is part of SAB’s larger $5.3 billion (SAR 20 billion) program designed to strengthen the bank’s financial base and support its long-term goals.
Structure of the Offering
- The first tranche offered a fixed return of 6.07% annually, consisting of 3,650 certificates.
- The second tranche had a floating rate, based on the three-month Saudi Interbank Offered Rate (SAIBOR) plus 1.34%, and included 350 units.
- Each sukuk was priced at $266,116.6 (SAR 1 million).
The sukuk offering aims to improve SAB’s capital and help achieve its strategic objectives.
Big Numbers
SAB’s total assets grew by 16.1% over the past year, reaching $105.3 billion (SAR 395.4 billion) by the end of September 2024.
Third Quarter Performance
SAB’s net profit rose 2.9% year-on-year to $500 million (SAR 1.9 billion) in the third quarter of 2024. This increase was mainly due to higher operating income but was partly offset by higher provisions for credit losses, Zakat and income tax, and operating expenses.
The bank’s provision for expected credit losses during the July-September period jumped by 114%, mostly because of fewer recoveries.
SAB’s operating profit for the quarter grew by 8.7% to $939.7 million (SAR 3.5 billion), driven by higher income from special commissions, currency exchange, and fees.
For the first nine months of 2024, SAB’s net profit increased by 15.5% to $5.6 billion (SAR 1.6 billion), thanks to strong growth in its operating income.
Published: 13th December 2024
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