Saudi Arabia’s Arab National Bank has received regulatory approval to raise 2 billion riyals ($533.28 million)through sukuk which will enhance its supplementary capital, it said in a statement on Wednesday.
The kingdom’s seventh-largest lender by assets will privately place the Tier 2 sukuk with a tenor of 10 years although it allows the issuer to redeem the security after five years.
Arab National Bank joins a string of Saudi Arabian banks that have sought to replenish their capital reserves in the last couple of years by issuing capital-boosting bonds and bonus shares following a period of strong lending growth.
Sources told Reuters in June that Riyad Bank had completed a sukuk worth 4 billion riyals which would enhance its Tier 2 capital while Saudi British Bank privately placed a 1.5 billion riyal subordinated Tier 2 sukuk in May.
Capital reserves are high in Saudi Arabia due to the kingdom’s conservative regulatory standards.
Reuters
