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Wed 30 Mar 2011 07:36 PM

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Saudi's Bank Aljazira upbeat on 2011 earnings

Chief executive Nabil al-Hawshan says he expects this year to be good 'by all measures'

Saudi's Bank Aljazira upbeat on 2011 earnings
(Getty Images - for illustrative purposes only)

Saudi Arabia's Bank Aljazira

expects 2011 to be good "by all measures" and sees

first quarter earnings beating that of the fourth quarter, its

chief executive said on Wednesday.

The bank's SR1bn ($266.7m) Islamic bond, or

sukuk, will help raise its lending ratio to 10 percent from five

percent over the coming year, Nabil al-Hawshan told Al Arabiya

television.

"The success of the (bond) issue beat expectations. Demand

was very big from the private and public sector, banks,

insurance companies and investment funds," he said.

The bank on Tuesday said the 10-year sukuk was four times

oversubscribed.

Hawshan said first-quarter results were expected to be

better than those of the fourth quarter of 2010, when the bank

narrowed its loss its loss to SR27m from SR266m a year earlier.

Analysts had forecast an average loss of SR18.1m

for the fourth quarter in a Reuters poll.

The sukuk will not be listed on the Saudi bourse and the

board will meet at the end of 2011 to decide on future sukuk

issues, Hawshan said.

Pricing for the first five years will be 1.7 percent over

six-month LIBOR and can be returned in five years, the bank said

on Tuesday.

Earlier in March, the bank had announced it planned to issue

a local currency-denominated sukuk and said that the local units

of HSBC and J.P. Morgan chase & Co will be

managing the bond sale.

The bank made a net profit of SR29m in 2010. Its shares closed 0.5 percent higher earlier on Wednesday,

in line with the bourse index which rose 0.7 percent.

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