SNB Returns to the Market with Second Sukuk Offering in 2024 with a SAR6bn (USD1.6bn) Additional Tier 1 (AT1) Capital Sukuk Wakala in November
The Saudi National Bank (SNB) (formerly National Commercial Bank (NCB)), the largest bank in the Kingdom in terms of assets, returned to the public debt market with the successful completion of a SAR6bn (USD1.6bn) Additional Tier 1 (AT1) Capital Sukuk Wakala issuance on 21 November 2024.
The Bank mandated SNB Capital Company as Sole Lead Manager, Bookrunner, and Lead Arranger to the transaction. SNB Capital started marketing the Sukuk – an SAR-denominated AT1 Sukuk by way of an offer to eligible investors in the Kingdom of Saudi Arabia, on 10 November 2024.
In a disclosure to Tadawul (the Saudi Exchange), SNB said that the pricing for the AT1 SAR6bn Sukuk was set at 6.00% per annum from (and including) the issue date up to (but excluding) 21 November 2029. “If the Sukuk are not redeemed or purchased and cancelled in accordance with the terms and conditions of the Sukuk on or prior to 21 May 2030, the rate of return will then be reset on such date and every five years thereafter as detailed in the term sheet in relation to the Sukuk,” it added.
The issuance has no tenor because it is a Perpetual transaction (subject to early redemption on a Call Date or as otherwise specified in the terms and conditions). The proceeds from the issuance will be used to strengthen the Bank’s capital base in accordance with the Basel III Capital Adequacy framework.
This is the second foray of SNB into the Sukuk market in 2024. In February the Bank returned to the international debt market after an absence of three years with a 5-year benchmark Reg S Sustainability senior unsecured US$850 million Sukuk Wakala/Commodity Murabaha issuance. The Sukuk certificates were issued through SNB Sukuk Limited, a wholly owned special purpose vehicle incorporated in the Cayman Islands, acting as Trustee on behalf of the Obligor SNB.
Saudi National Bank announced Interim Net Profits totalling SAR10.3bn for FH 2024 – up 2.3% on the same period in 2023. Similarly, total assets increased by 4.9% to reach SAR1,088bn during the period compared to December 2023. The main drivers were a 5.9% growth in financing, resulted from 4.1% growth in Retail, principally from a 7.2% growth in mortgage finance and a 7.9% growth in wholesale financing.
This was coupled with 6.5% growth in the investment portfolio, while the total of customer deposits increased by 7.2% to SAR633bn during the period compared to the year ending in December 2023.