Alinma Bank has subscribed to SAR 7 billion worth of Islamic bonds under the Saudi government’s riyal-denominated sukuk program, chief executive and managing director, Abdulmohsen Al-Fares, told CNBC Arabia Wednesday.
The bank's sukuk portfolio is valued at SAR 10 billion.
"The major part of this portfolio is being invested in government issuances," Al-Fares added.
It also participated in several sukuk sales, including those of state-run Saudi Aramco, SATORP and Sadara along with some GCC and Islamic local banks.
He said there was still a lot of room for growth at Alinma as it has not yet optimized its market share. Its market share of loans and deposits currently exceeded 5 percent, he added.
More than 50 percent of Alinma's loans carry variable interest rates, and corporate clients mostly hold them.
Corporates accounted for 79 percent of the bank's total loan book, compared to 14 percent for retail clients.
Accumulated provisions stand at SAR 1.3 billion. Alinma increased its provisions by over SAR 400 million since September 2016 to date.
Hedging provisions represented 58 percent of total provisions, while special provisions reached 44 percent, which implies a very strong solvency ratio at over 166 percent.
In addition, non-performing loans are less than 1 percent at Alinma Bank, which is lower than the sector's average.
Alinma reported a net profit of SAR 1.45 billion for the first nine months of 2017, a 31 percent year-on-year increase.
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