Riyad Bank has raised $1bn through an issuance of tier 2 sustainable capital debt instruments at an annual yield of 5.8%, the lender announced via the Saudi stock exchange on January 8.

The 10-year debt instruments are callable after five years and will be listed on the London Stock Exchange, Al Eqtisadiah reported on January 8. The offering can be sold under Regulation S of the US Securities Act of 1933 as amended.

The minimum subscription was set at $200,000, targeting qualified investors both inside and outside Saudi Arabia. First Abu Dhabi Bank, BBVA, DBS Bank, Emirates NBD Capital, HSBC, Merrill Lynch Saudi Arabia, Mizuho International, Riyad Capital, SMBC Nikko and Standard Chartered were appointed as underwriting managers.

The capital raising follows record third-quarter profits of SAR2.7bn ($720mn) at Riyad Bank, though growth came in at just 1.3%, the slowest pace in seven quarters. The modest growth reflected a balance between rising operating income and increased operational expenses.

Net income growth was driven primarily by increased total operating income, bolstered by higher net fee and commission income, gains from the sale of non-trading investments, and improved net trading income.

The bank recorded total fee income of SAR6.3bn ($1.68bn), up 13.6% year-on-year, supported by higher fee income from loans, advances, interbank liabilities and investments. Investment fee income rose 14% to SAR741.5mn ($197.7mn), whilst net investment income increased marginally by 1.34% to SAR2.9bn ($773.3mn), reflecting stability in the bank's investment portfolio performance.

Riyad Bank's loan and advance portfolio reached SAR368bn ($98.1bn) against deposits of SAR325bn ($86.7bn), pushing the loans-to-deposits ratio to 113% in the third quarter of 2025 compared with 104% in the same period of 2024, indicating increased lending activity and liquidity deployment.