RIYADH, 2 December 2004 — At an ordinary meeting held in Riyadh on Tuesday, the shareholders of Saudi Hollandi Bank elected six Saudi board members for a new term of three years starting from yesterday to Dec. 31, 2007. The new Saudi board members are Lubna Sulaiman Al-Olayan, Dr. Abdulaziz Hamad Al-Fahad and Dr. Fahad Al-Mubarak, in addition to the existing Sulaiman A. R. Al-Suhaimi, Sulaiman Al-Amro and Mohammed Khalid Al-Noaimi. The shareholders further approved the motion passed to increase the bank’s Tier 2 capital by the issue of up to SR700 million of subordinated debt.
The debt issue will qualify as Tier 2 capital under the Saudi Arabian Monetary Agency’s risk-based capital adequacy rules thereby strengthening the bank’s regulatory capital base. The proceeds of the subordinated debt issue will be used to improve the bank’s ability to meet growing demand for medium-term lending to its customers.
The chairman of Saudi Hollandi Bank commented, “The approval of the subordinated debt issue by the shareholders is a further vote of confidence in the ability of the bank’s management and staff to deliver superior returns on their investment and I am delighted that we now have the additional funding to proceed with rolling out our new growth strategy.
The increase in Tier 2 capital through the issue of subordinated debt is the Kingdom’s first such issue by a bank and the first offering since the inauguration of the Saudi Capital Markets Authority, once again distinguishing Saudi Hollandi Bank as a leader in innovation. This follows other recent successes including the launch of its prestigious Van Gogh branches and Wealth Management Accounts for its high net worth and preferred-banking customers and the launch of the Kingdom’s first SMART (chip-enabled) credit cards. In view of the fact that this is a major step for the debt capital markets in the Kingdom we are highly appreciative of the support given by SAMA, the Capital Markets Authority and the Ministry of Commerce in facilitating this issue”.
Saudi Hollandi Bank and ABN Amro as joint book runners and lead managers will manage the issue and the subordinated debt will be raised through the issue of notes offered by private placement to significant investors in the Kingdom.
Last month the Fitch ratings agency affirmed Saudi Hollandi Bank’s ratings at long-term BBB+, citing what it said was a “consistently strong profitability, stable deposit base, comfortable liquidity, sound asset quality and adequate capitalization”.