Saudi Arabia’s Capital Market Authority (CMA) has approved Alinma Bank’s application to increase its share capital from SAR 25 billion to SAR 30 billion, representing a 20% expansion of the bank’s capital base. The increase will be executed through a bonus share distribution at a ratio of one new share for every five shares held, making it a non-dilutive transaction for existing shareholders in terms of their proportional ownership.
Bonus Issue Structure and Financing
The SAR 5 billion capital addition will be funded by capitalising equal portions of Alinma Bank’s statutory reserve and retained earnings — SAR 2.5 billion from each. This approach preserves the bank’s liquidity position while converting accumulated internal reserves into paid-up capital, a common mechanism used by Saudi banks to strengthen their regulatory capital ratios without requiring shareholders to contribute fresh cash. The number of shares in issue will increase from 2.5 billion to 3 billion upon completion.
Shareholders of record registered with the Securities Depository Center (Edaa) on the second trading day following the record date — which is yet to be formally determined — will be eligible to receive the bonus shares. Alinma Bank is required to convene an extraordinary general assembly to formally approve the capital increase, with the meeting to be held within six months of the CMA’s approval. The transaction is subject to completion of all applicable regulatory requirements and legal obligations.
Alinma Bank’s Position in Saudi Banking
Alinma Bank is one of Saudi Arabia’s fully Shariah-compliant Islamic banks, established in 2006 and listed on the Saudi Exchange (Tadawul). It operates across retail, corporate, treasury, and investment banking segments and has steadily expanded its balance sheet and customer base over the past decade. The bank’s decision to raise its capital through a bonus issue reflects both the strength of its retained earnings position and its ambition to support a growing loan portfolio and the broader financing needs of the Saudi economy as it accelerates development activity under Vision 2030.
A larger capital base also positions Alinma Bank to take on greater single-obligor exposure limits and participate more actively in large-scale project financing — including infrastructure, real estate, and industrial development deals — that are integral to the Kingdom’s economic transformation agenda. The CMA approval comes ahead of the Eid Al-Fitr holiday, during which Saudi financial markets are suspended until March 23.
