Banque Saudi Fransi may issue SAR 2 million Tier 2 sukuk

Banque Saudi Fransi (BSFR), a Saudi bank partly owned by Credit Agricole, plans to raise about two billion riyals from Shariah-compliant bond (sukuk) to support its Tier 2 capital to be ready for anticipated stricter capital adequacy rules, Bloomberg reported.

The bank’s investment banking arm in Riyadh, Saudi Fransi Capital, will help arrange the deal, which may take place in June, Bloomberg quoted unidentified sources.

The bank has the third-lowest capitalization ratio of Saudi Arabia’s 11 listed Saudi banks.

Several banks in Saudi are seeking to boost capital to comply with stricter Basel III capital adequacy regulations, which will take effect in coming years. Saudi Hollandi Bank raised 2.5 billion riyals last year, Saudi British Bank collected 1.5 billion riyals, and National Commercial Bank (NCB) raised SAR 5 billion from Tier 2 sukuk in February.