Riyadh: Saudi Arabia's Bank Aljazira expects 2011 to be good "by all measures" and sees first quarter earnings beating that of the fourth quarter, its chief executive said yesterday.
The bank's one billion riyal Islamic bond, or sukuk, will help raise its lending ratio to 10 per cent from five per cent over the coming year, Nabeel Al Hawshan told Al Arabiya television.
"The success of the [bond] issue beat expectations. Demand was very big from the private and public sector, banks, insurance companies and investment funds," he said.
Average loss
The bank on Tuesday said the 10-year sukuk was four times oversubscribed.
Hawshan said first-quarter results were expected to be better than those of the fourth quarter of 2010, when the bank narrowed its loss its loss to 27 million riyals from 266 million riyals a year earlier.
Analysts had forecast an average loss of 18.1 million riyals for the fourth quarter in a Reuters poll.
The sukuk will not be listed on the Saudi bourse and the board will meet at the end of 2011 to decide on future sukuk issues, Hawshan said.
Pricing for the first five years will be 1.7 per cent over six-month Libor and can be returned in five years, the bank said on Tuesday.
Earlier last month the bank announced it planned to issue a local currency-denominated sukuk and said that the local units of HSBC and J.P. Morgan chase & Co will be managing the bond sale. The bank made a net profit of 29 million riyals in 2010.
Its shares closed 0.5 per cent higher earlier yesterday, in line with the bourse index which rose 0.7 per cent.
