Riyad Bank is reportedly deliberating the possibility of offering public shares for its investment banking division, aiming to harness the robust investor enthusiasm within Saudi Arabia’s buoyant equity market. The institution, which ranks as the third largest bank in the kingdom, has initiated a comprehensive evaluation and groundwork for a prospective initial public offering (IPO) of Riyad Capital, as disclosed in a recent company statement.
Amidst an environment where global IPO activities have generally waned due to soaring interest rates, the Gulf region stands out. Over the past couple of years, it has witnessed a surge in IPOs, propelled by strong oil prices and burgeoning interest from international investors. Just last week, Modern Mills Co. experienced a remarkable 30% rise in its stock value on its first trading day in Riyadh following a highly oversubscribed IPO.
Riyad Capital, with its suite of services including asset and wealth management, investment banking, and brokerage, reported a profit of 380.5 million riyals (approximately $101 million) in the previous year. The firm’s total assets are estimated to be around 3 billion riyals. The majority stake in Riyad Bank is held by the Public Investment Fund, Saudi Arabia’s sovereign wealth fund.
As the landscape of public finance in Saudi Arabia continues to evolve, all eyes are on Riyad Bank’s next move regarding the potential IPO of its lucrative investment wing, Riyad Capital.