NCB, Riyad Bank, and Samba planning US dollar bonds: report

At least three of Saudi Arabia’s top commercial banks are planning US dollar debt issues, amid plans to diversify sources of finance, Reuters reported, citing banking sources familiar with the matter.

The Kingdom’s largest lender, National Commercial Bank (NCB), is preparing documents before a potential issue, the agency said.

Riyad Bank, the fourth-largest Saudi bank by assets, has mandated banks for a US dollar bond sale. It had revealed plans earlier this year to establish a program to issue bonds in local currency and US dollars.

Meanwhile, Samba Financial Group is reportedly working with Citigroup on a potential US dollar debt sale, sources said.

The issuances would be the first hard-currency debt sales by Saudi banks in several years.

While the lenders are seeking to boost capital levels, they are in no rush for funds as they are still flush with liquidity due to weak credit growth and looser public spending, it was reported.

The Saudi government’s growing reliance on international bond issues has also freed up liquidity for local banks.

In a report in March, Moody’s Investors Service said the outlook for Saudi banks is stable as the Kingdom’s economy is expected to return to growth this year, bolstered by higher public spending and other stimulus

Lending growth – driven by corporate and real estate lending – is expected to increase by 4 percent in 2018, as the Saudi economy grows 1.3 percent.