DUBAI (Reuters) – At least three commercial banks in Saudi Arabia are preparing U.S. dollar debt issues, banking sources said, in what would be the first hard-currency debt sales by Saudi banks in several years.
The banks want to diversify their sources of finance and boost capital levels, but are in no rush for the cash as they are still flush with liquidity due to sluggish credit growth and looser public spending.
Kingdom - Reliance - Bond - Issues - Liquidity
The kingdom’s increasing reliance on international bond issues has also freed up liquidity for local banks.
Riyad Bank , the kingdom’s fourth-largest bank by assets, has mandated banks for a U.S. dollar bond sale, four bankers said.
Bank - Intention - Year - Program - Bonds
The bank had announced its intention this year to establish a program to issue bonds in local currency and U.S. dollars to diversify sources of finance and boost the bank’s capital base.
Samba Financial Group , the third largest, is working with Citigroup on a potential U.S. dollar debt sale, four sources said.
Saudi - Banks - Requests - Comment - Citigroup
The three Saudi banks did not respond to requests for comment. Citigroup declined to comment.
Saudi banks are often better capitalized than their international peers, but experts said they may want an extra buffer to prepare for new international rules on capital levels, known as Basel III, and to meet an expected rise in credit demand.
Saudi banks had been expected...
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