The National Commercial Bank (NCB) is the first
bank in Saudi Arabia to issue an additional tier 1 (AT1)
capital Basel III-compliant perpetual sukuk.
The privately-placed sukuk took
on a mudaraba structure, with the issuer and
investor entering into a form of partnership, then together
investing in shariah-compliant products.
Although this is a first for the kingdom, counsel
on the deal are confident that it won’t be the
"Banks in the region have started to look beyond
traditional sources of funding and capital such as deposits and
ordinary shares, and towards more diversified platforms,
including AT1 capital," said Jonathan Fried, partner at Linklaters who advised on the deal.
Fried explained that there are various factors at play,
including the sliding price of oil,...