NCB to sell SAR 2 bln sukuk to boost capital: report

National Commercial Bank (NCB), Saudi Arabia’s biggest bank, plans to sell SAR 2 billion of capital-boosting sukuk as part of a plan to raise SAR 7 billion before the end of 2015, Reuters reported Sunday, citing banking sources familiar with the transaction.

The sukuk offer, the third such transaction since June, enhances the bank’s Tier 1, or core capital, and is compliant with Basel III banking regulations.

Like the previous two issues, this sukuk is structured with a perpetual tenor but allows the bank to redeem the sukuk, or sharia-compliant bond, after a certain date, Reuters added.

The issue will be privately placed with one or more government-owned investment funds, it said.

The lender’s Tier 1 capital ratio had dropped to 14.2 percent at the end of June, down from 15.5 percent at the same period last year.