Saudi British Bank (SABB), an affiliate of HSBC, aims to sell an Islamic bond, or or sukuk, before the end of 2013 to boost its capital base.
According to media reports, HSBC is advising SABB on the potential riyal-denominated transaction.
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SABB’s combined core Tier 1 and supplementary Tier 2 capital is said to be one of the lowest ranked among all the banks in Saudi Arabia as of June 2013, garnering just 14.78%.
SABB, which is 40% owned by HSBC, declined to comment.
SABB has sold a Tier 2 sukuk once before. In March 2012, it completed a SAR1.5 billion (US$400 million) five-year issue which priced at 1.2% over the Saudi interbank offered rate (Saibor). HSBC Saudi Arabia also arranged that transaction.
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