Saudi Arabia’ sovereign wealth fund, the Public Investment Fund, has said it will buy a 23.97 per cent stake in Jordan’s Capital Bank Group in a $185 million deal aimed at increasing the lender’s capital.
The two parties signed a subscription agreement that would give PIF 63 million new shares in Capital Bank, one of the leading financial institutions in the country, according to a joint statement.
“The deal aims to increase the group’s capital, thereby raising its total shareholders’ equity to around $846m, and bolstering the group’s ability to execute its strategy and expand its business through introducing new services and products in Jordan, Saudi Arabia, Iraq and other markets where it operates,” the statement said.
Proceeds from the deal will help the bank to grow its investment arm and support its digital transformation plans, including the launch of digital banks.
The transaction is also in line with PIF’s strategy to explore new investment opportunities in the Mena region, it said.
The $620 billion wealth fund is investing domestically to help the kingdom diversify its economy and is broadening its international portfolio to generate income beyond the oil sector.
In February, PIF said it opened three new subsidiary offices in London, New York and Hong Kong, as it looks to expand its international footprint.
PIF’s international expansion comes as part of its five-year strategy to grow its assets under management to $1.07 trillion by the end of 2025, while continuing to create new sectors, companies and jobs.
The fund’s latest investment highlights Capital Bank’s growth prospects, given its solid position in terms of equity, the statement said.
The group has built a strong financial and credit position following its acquisition of the assets and branches of Bank Audi in Jordan and Iraq, as well as Societe Generale in the kingdom in less than a year, it said.