Riyad Bank plans IPO of its investment arm

Faisal Al Nasser/Reuters

• Riyad Bank to list on Saudi exchange
• Third-largest lender in Saudi Arabia
• Net profit rose 15% in 2023

Riyad Bank’s board is planning to list its investment arm, Riyad Capital, on the Saudi stock exchange, as the government tries to increase market offerings to raise the status of Saudi capital markets in global rankings.  

The bank said in a statement to the Saudi stock exchange on Thursday that it and its subsidiary will work together to conduct an assessment.

This will include determining the size, structure and other relevant details of the initial public offering (IPO). 

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Riyad Bank, Saudi Arabia’s third largest lender by assets, is 22 percent owned by the sovereign Public Investment Fund. Another 10 percent is held by the state-run General Organization for Social Insurance.

Net profit rose 15 percent to SAR8 billion ($2 billion) in 2023, from SAR7 billion in 2022, on higher operating income. It will pay a dividend of just over SAR2 billion for the second half of 2023, making the total dividend SAR4 billion last year.

In February, the Capital Market Authority (CMA) said it had received 56 initial public offering applications, well ahead of analysts’ expectations.

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CMA chairman Mohammed El Kuwaiz told a capital markets forum in Riyadh that applications to the main Saudi stock market and the parallel market Nomu were up 30 percent on last year. 

The CMA is prodding blue-chip companies to offer more shares to the public in follow-on market offerings as part of a drive to become a global financial centre.