File picture of Yasir Othman Al Rumayyan, Governor of Public Investment Fund (PIF). The Saudi wealth fund has in the recent past taken on a more direct exposure in domestic and regional enterprises. In February, PIF announced it was taking a controlling stake in the Dubai luxury fitout and design firm, Depa. Image Credit: Gulf News Archive

Dubai: the Saudi wealth fund, PIF, has taken a 23.97 per cent stake in Capital Bank Group (CBG), one of Jordan’s bigger financial institutions and with a presence in Iraq and wider region. Through a $185 million subscription agreement, PIF (or Public Investment Fund) will receive 63 million new shares issued by CBG.

This deal reinforces PIF's strategy of ‘exploring new investment opportunities in the MENA region that support the creation of long-term strategic economic partnerships’. The Jordanian Group has a ‘strong financial and credit position’ after the acquisition of the assets and branches of Bank Audi in Jordan and Iraq, as well as Société Generale - Jordan over the last 12 months.

Early this year, Capital Bank launched its digital banking entity - Blink - to 're-imagine the way people conduct their banking operations'.

Once the regulatory approval is given, the PIF funds will raise CBG’s capital, and raising total shareholders’ equity to around $846 million. Capital Bank Group plans to offer new services and products in markets that it operates in as well as through its other entity, Capital Investments. The Capital Bank Group has assets of 6 billion Jordanian dinars ($8.4 billion), while the total equity of its shareholders is about JD472 million ($665 million).

The PIF deal will speed up CBG’s digital transformation plans by ‘offering the most up-to-date electronic services, including the launch of digital banks’.

  1. As of April 2022, PIF’s assets under management were at SR2.3 trillion.
  2. Since 2017, the Fund has established 52 companies and created, directly and indirectly, more than 500,000 jobs as at the end of 2021.