Riyad Bank considering IPO of its investment banking unit

Saudi Arabia’s Riyad Bank has approved the assessment and preparation of an initial public offering of its investment banking unit, Riyad Capital.

According to a Tadawul statement, the board of directors are considering listing the subsidiary on the main market of the Saudi Exchange.

“Riyad Bank and Riyad Capital will coordinate to finalize the assessment as well as the relevant measures including determining the offering size as well as the other related details,” said the financial institution in the statement.

The IPO will be subject to regulatory approvals if Riyad Bank decides to proceed with the offering.

The Public Investment Fund-backed lender noted that any significant developments in this regard will be announced in due course, in accordance with applicable regulations.

Established in 2008, Riyad Capital offers asset management, wealth management, investment banking, and brokerage services.

The company benefits from being a subsidiary of Riyad Bank, one of Saudi Arabia’s largest financial institutions, with a steadily growing corporate and retail banking presence, as per the company’s website. This partnership allows Riyad Capital to use the bank’s knowledge and experience, supported by a strong financial base.

In March, Riyad Capital – in partnership with Saudi real estate firm Al-Ramz – launched the Durrat King Khalid Fund to develop a high-quality project within the office property sector. The project is situated in a prime location in the Kingdom’s capital, covering an area of 27,000 sq. m. Riyad Bank is owned 21.75 percent by PIF and 10.39 percent by the government of Saudi Arabia.

In February, the bank announced that its net profit for 2023 surged to SR8.05 billion ($2.15 billion), marking a 15 percent increase compared to the previous year.

According to a Tadawul statement, the lender saw its operating income climb by 17 percent year-on-year to SR15.89 billion in 2023, driven by a rise in net special commission and other operating income.

However, the bank experienced a 3.6 percent drop in net profit for the fourth quarter of 2023 to SR1.95 billion, compared to the same period the previous year.

In February, a report from KAMCO Invest unveiled that Saudi Arabia emerged as a leader in IPOs within the Gulf Cooperation Council region last year, with 35 out of the 46 listings occurring in the Kingdom.

The report highlighted that Saudi Arabia’s parallel market, Nomu, witnessed 27 IPOs in 2023, while the Tadawul All Share Index saw eight deals.