The 10 year deal is a precursor to another SR725m that the bank plans to raise soon to increase its capital.

At 200 basis points over sibor, the deal is very competitively priced, with the bank benefiting from selling privately to investors, rather than through a listed sukuk.

Banks in Saudi Arabia, and around the Gulf, are struggling to secure fresh customer deposits to finance their lending activities. In the third quarter of the year Saudi Hollandi reported an 88 per cent increase in profits to SR306m, a 40 per cent growth in deposits, but a 45 per cent increase in loans and advances.