https://arab.news/8xaqt
RIYADH: Riyad Bank announced on Wednesday its intention to issue riyal-denominated sukuk on private placement basis.
Riyad Capital has been mandated as the sole lead manager and book runner for the potential Tier 1 capital sukuk offer, according to a bourse filing.
The amount and terms of the prospective issuance will be determined at a later stage, subject to market conditions.
Getting the required regulatory approvals is also necessary to proceed with the transaction.
In February, the bank completed the offering of $750 million worth of US dollar-denominated sukuk to investors in the Kingdom and abroad.
The issuance of 3,750 bonds was the first sustainable additional Tier 1 sukuk globally, having the lowest-ever credit spread achieved by a Gulf Cooperation Council bank for an AT1 sukuk of 4 percent.
Given the bank’s strong track record, the order book was 4.3 times oversubscribed with demand peaking at $3.2 billion, mostly allocated to banks and fund managers.
To manage the issuance, the bank appointed HSBC, Standard Chartered Bank, and Riyad Capital as joint global coordinators.
The offerings come as a step toward improving the bank’s capital base to support financial and strategic needs.
In terms of financial performance, Riyad Bank saw its profit rally by 10 percent to SR3.2 billion ($842 million) in the first half of 2022, despite incurring higher expenses. It was up from SR2.9 billion in the same period a year ago.
The profit hike was buoyed by higher operating income, due to an increase in net special commission income, fee and commission income, and exchange income, the bank said.
That said, salaries and impairment charges on investments weighed on profit during the six-month period, leading to a rise in expenses.
Impairment charges for credit losses reached SR608 million by June end, compared to SR550 million in the corresponding period in 2021.
Shareholders of Riyad Bank received a SR0.5 dividend per share for the first half of 2022 with 3 billion shares eligible for dividends, representing a total payout of SR1.5 billion.