Riyad Bank Opens Retail-Accessible AT1 Sukuk Subscription

Riyad Bank, one of Saudi Arabia’s largest banks, opened a public subscription on July 21, 2026, for Saudi riyal-denominated Additional Tier 1 (AT1) capital sukuk, offering an initial SAR 5 billion at a fixed 6.5 percent annual profit rate, according to Zawya. The subscription window runs through August 3, 2026, and each sukuk unit is priced at SAR 1,000, Zawya reported. Riyad Capital is acting as financial adviser, sole arranger and dealer, per Zawya and Arab News.

The offering opens Riyad Bank’s Additional Tier 1 sukuk to the public rather than placing it privately with institutions. Investors can subscribe from July 21 to August 3, 2026, buying units of SAR 1,000 that pay a fixed 6.5 percent annual profit rate, with an initial issuance size of SAR 5 billion, according to Zawya.

A Retail-Accessible AT1 Sukuk

The SAR 1,000 unit price marks a shift from how Riyad Bank has sold this kind of capital instrument before. In January 2025, the bank raised SAR 2 billion through an AT1 sukuk placed privately with qualified institutional and individual investors at a 6.00 percent fixed annual profit rate, according to Zawya. Those private placements carried a SAR 250,000 minimum subscription; the public offer now underway drops that entry point to SAR 1,000, opening the instrument to individual retail investors rather than restricting it to qualified buyers. The move echoes a broader push across the Gulf to widen retail access to sukuk, following Abu Dhabi Islamic Bank’s debut retail sukuk offering in the UAE. That threshold puts the offering within reach of individual savers rather than only institutional treasuries and family offices, a segment of the sukuk market Gulf issuers have only recently begun to court.

Zawya reported that the sale began with initial price thoughts around 6 percent before the final rate was set at 6.5 percent. AT1 sukuk don’t carry a fixed maturity date; they are perpetual instruments subject to early redemption by the issuer on a set call date, and they count toward a bank’s Tier 1 capital because they are structured to absorb losses if the bank’s capital falls below set thresholds, which is why regulators treat them as core capital.

The SAR 10 Billion Program Behind the Offer

The current subscription draws on a SAR 10 billion, or about $2.66 billion, AT1 sukuk program that Riyad Bank established in July 2026 as a standing facility for issuing perpetual shariah-compliant capital instruments to strengthen its capital base, support growth and manage liquidity, according to Zawya and Enterprise. The base prospectus is dated July 9, 2026, per Enterprise, and A&O Shearman and Khoshaim & Associates acted as legal counsel on the program, per Zawya.

Riyad Bank is rated A (stable) by S&P Global Ratings, A- (stable) by Fitch Ratings, and A1 (stable) by Moody’s, according to Enterprise. As of September 30, 2025, its Tier 1 capital adequacy ratio stood at 15.78 percent and its total capital adequacy ratio at 17.81 percent, both above the 11.079 percent regulatory minimum, per Enterprise.

Part of a Wider Saudi Capital-Raising Push

Riyad Bank reported first-quarter 2026 net profit of SAR 2.61 billion, up 5 percent year on year, according to Argaam and Maaal. The bank has also been active beyond this program: in February 2026, it issued additional AT1 sukuk of $50 million and SAR 1.25 billion, per Zawya.

Saudi banks more broadly have leaned on AT1 and Tier 2 sukuk to shore up capital as loan books expand, driven by mortgage and corporate lending tied to Vision 2030 projects, according to Zawya. Arab National Bank’s planned redemption of its $750 million Tier 2 sukuk due 2030 is part of the same capital-management cycle among Saudi lenders, even as GCC issuance overall has slowed relative to Malaysia’s larger share of global sukuk growth.

Riyad Bank hasn’t disclosed the final size of the current offer. The bank has said only that it won’t confirm the total until the subscription period closes, based on market conditions, according to Zawya. Subscriptions close on August 3, 2026.

Frequently Asked Questions

What is Riyad Bank’s AT1 sukuk offering?

It is a public subscription for Saudi riyal-denominated Additional Tier 1 capital sukuk that opened July 21, 2026, and closes August 3, 2026. The initial size is SAR 5 billion, priced at SAR 1,000 per unit with a fixed 6.5 percent annual profit rate, according to Zawya.

How is this different from Riyad Bank’s earlier AT1 sukuk?

Earlier AT1 sukuk, including the SAR 2 billion raised in January 2025, were private placements restricted to qualified institutional and individual investors with a SAR 250,000 minimum subscription, per Zawya. The current offer’s SAR 1,000 unit price opens it to retail investors.

What is the profit rate on the new sukuk?

The fixed annual profit rate is 6.5 percent, up from initial price thoughts of around 6 percent when the sale launched, according to Zawya.

What is Riyad Bank’s SAR 10 billion AT1 program?

It is a standing sukuk program Riyad Bank established in July 2026, with a base prospectus dated July 9, 2026, to issue perpetual shariah-compliant Additional Tier 1 capital instruments, according to Enterprise and Zawya. The program is valued at about $2.66 billion.

Who is arranging the offering?

Riyad Capital is acting as financial adviser, sole arranger and dealer, according to Zawya and Arab News. A&O Shearman and Khoshaim & Associates served as legal counsel on the underlying program.