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Two of Saudi’s largest listed banks mull $2.7bn dividend

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Al Rajhi Bank and Saudi National Bank have recommended dividends of 9% and 11.5% respectively for the second half of 2023

Two of the largest listed banks in Saudi Arabia have declared a combined dividend of SAR10 billion ($2.7 billion) for the second half of 2023.

The board of Saudi National Bank (SNB), the kingdom’s largest bank by assets, has recommended a dividend of nine percent or SAR5.4 billion for the second half of 2023. Overall, the lender’s total dividend for last year reached SAR10.5 billion. 

The board of Al Rajhi Bank, Saudi Arabia’s second-largest lender by asset, has proposed a dividend of 11.5 percent, totalling SAR4.6 billion for the second half of 2023. The overall dividend for the previous year amounted to SAR9.2 billion. 

Last week, Saudi Arabia’s Capital Market Authority said that it had received 56 initial public offering applications, a number well ahead of analysts’ expectations.

State oil major Saudi Aramco is also likely to issue a bond this year. 

CMA chief Mohammed ElKuwaiz told a capital markets forum in Riyadh on February 19 that the applications were a 30 percent increase on last year, covering the main Saudi stock market and the parallel market Nomu

Businesses from Saudi Arabia and the UAE are expected to dominate Middle East IPOs in 2024, according to a recent report by consultants EY.

The IMF lowered its forecast for Saudi Arabia’s increase in GDP in 2024 to 2.7 percent in January, down from a forecast of 4 percent made last October. This was on the grounds of lower oil production, which is due to continue until March. 

However, finance minister Mohammed Al-Jadaan said recently that Saudi Arabia must reduce its budget deficit and speed up its regulatory reforms if it is to remain competitive in a tight global market. 

Last May, ratings agency S&P said that the Saudi banking system cannot provide enough funding alone to finance the kingdom’s ambitious Vision 2030 and will require a combination of developing the local capital market and tapping international markets.

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