Saudi banks joining HSBC in sukuk boom
RIYADH: Saudi Arabian banks are climbing the rankings in arranging Persian Gulf Islamic bond deals this year, profiting from a growing pipeline of domestic debt sales.
Four of the top 10 banks helping issue sukuk from the Gulf Cooperation Council (GCC) are from Saudi Arabia, poised for their strongest showing on record, according to data. NCB Capital Co ranks second to HSBC Holdings Plc after arranging US$2.4 billion (RM7.70 billion) in sa-les. Last year, Banque Saudi Fransi was the only lender from the kingdom to make the top 10 - in ninth position.
Saudi banks are climbing the list as 68 per cent of sukuk sales in the six-nation GCC this year have been from the kingdom, up from 43 per cent last year. Islamic bond sales slowed elsewhere in the region as concern the United States Federal Reserve would taper bond-buying sent yields climbing.
"Local banks have the balance sheet to support such underwritings in contrast to investment banks which have in most cases limited profit-and-loss and balance-sheet support," said John Sfakianakis, chief investment strategist at Masic. "Banks find it opportune now to be underwriters given the size of these offerings and the timing."
The General Authority of Civil Aviation, the government-owned airport developer known as Gaca, foodmaker Almarai Co and construction company Saudi Binladin Group have sold Islamic bonds this year. Bloomberg