Investment leader Samer Choucair said Riyad Bank’s plan to issue Saudi riyal-denominated Additional Tier 1 sukuk under a SAR 10 billion sukuk program represents a strategic step toward strengthening its capital structure and supporting its ability to continue expanding credit in line with the objectives of Saudi Vision 2030.
Choucair explained that Additional Tier 1 sukuk are capital instruments recognized under Basel standards.
They help strengthen a bank’s capital base without requiring the issuance of new shares, providing greater flexibility to finance growth while preserving shareholder interests and improving capital management efficiency.
Samer Choucair noted that Saudi Arabia’s banking sector is witnessing sustained growth in financing demand, driven by expanding activity across infrastructure, housing, tourism, industry, and energy.
This makes a stronger capital base essential for maintaining capital adequacy levels and supporting future lending growth.
Choucair added that issuing sukuk in Saudi riyals reflects the rapid development of the domestic debt market and provides institutional investors and investment funds with a high-quality, local-currency investment instrument. This helps reduce exposure to exchange-rate volatility and creates additional opportunities for portfolio diversification.
He explained that such issuances also support Saudi Arabia’s efforts to deepen domestic capital markets and increase reliance on local financing instruments, in line with Vision 2030 goals to develop the sukuk and bond market and strengthen its role in financing the national economy.
Samer Choucair emphasized that the success of the issuance should not be measured solely by investor demand or the level of subscription coverage. Its real value will depend on Riyad Bank’s ability to deploy the proceeds into assets and projects that generate returns above the cost of funding, thereby supporting profitability and sustainable growth in the coming years.
Choucair added that investors will closely monitor the final issuance size, pricing mechanism, and demand levels, as these will serve as important indicators of liquidity strength in the domestic market and investor confidence in Saudi Arabia’s banking sector, which continues to reinforce its position as one of the most resilient financial sectors in the region.