Al Rajhi Bank, the largest Islamic bank in the Kingdom by assets, announced its intention to issue USD-denominated Tier 2 Sukuk under its international Sukuk issuance program, which was updated on June 17, 2026, based on decisions by the bank’s board of directors.
In a statement published on the Saudi Exchange (Tadawul) platform on Thursday, the bank said the upcoming issuance will be conducted through a special purpose vehicle (SPV) and offered to qualified investors inside and outside the Kingdom, in a move aimed at diversifying funding sources and expanding its base of international investors.
Offering Management Team
Al Rajhi Bank appointed a group of local, regional and international banks and investment firms to manage the subscription process and register the Sukuk, including: Al Rajhi Capital, Arqaam Capital Limited, Banco Bilbao Vizcaya Argentaria (BBVA), Citigroup Global Markets Limited, Intesa Sanpaolo S.p.A. (London Branch), Morgan Stanley & Co. International plc, SMBC Bank International plc, Standard Chartered Bank, and Warba Bank.
Value, Terms Subject to Market Conditions
The bank clarified that the final value of the Sukuk and the terms of the offering will be determined based on prevailing market conditions at the time of issuance, ensuring the achievement of optimal financing terms aligned with the bank’s strategy and financial objectives.
Strategic Objectives Within Sustainable Finance Framework
Al Rajhi Bank attributed the rationale for the issuance to its desire to meet its financial and strategic objectives, in line with the sustainable finance framework previously adopted by the bank, which focuses on enhancing the efficiency of the funding structure, supporting planned growth in assets and operations, while maintaining appropriate levels of liquidity and capital.
Regulatory Approvals
The Sukuk offering is subject to approval by the relevant regulatory authorities and will be implemented in accordance with applicable laws and regulations in the Kingdom and target markets, including requirements of the Saudi Capital Market Authority and listing rules on Tadawul.
Background on Bank Performance
This announcement comes at a time when Al Rajhi Bank recorded strong profit growth in the second quarter of 2026, with profits exceeding SAR 7 billion, supported by growth in net income from financing and investment operations and improved cost efficiency, according to previously released data on Tadawul.
Tier 2 Sukuk are considered additional capital instruments that enhance the bank’s ability to absorb financial shocks and are counted toward capital adequacy requirements under Basel III standards, reflecting Al Rajhi’s commitment to strengthening its financial resilience and continuing its regional and international expansion plans.
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