Saudi Real Estate Refinance Company Seals $907 Million Deal with Saudi National Bank
Deal News | Mar 03, 2025 | Zawya
The Saudi Real Estate Refinance Company (SRC), a subsidiary of the Public Investment Fund (PIF), has completed a significant transaction with Saudi National Bank (SNB), acquiring a mortgage portfolio valued at SAR 3.4 billion ($907 million). This move is part of SRC's broader initiative to enhance liquidity in the Saudi mortgage market and promote affordable housing solutions. The transaction allows SNB, Saudi Arabia's largest bank, to free up capital in a tightening liquidity environment. This step is consistent with SRC's strategy to purchase mortgage portfolios from banks and finance companies to stimulate market liquidity and facilitate home ownership under Saudi Arabia's Vision 2030 program. The kingdom has seen a surge in mortgage lending, influenced by government regulations to increase home ownership to 70%. SNB's decision to sell is strategic, given the current high-interest environment, allowing favorable sale terms for long-duration fixed-rate loans. SRC CEO Majeed Al-Abduljabbar emphasized the deal's alignment with Saudi Arabia's goals of developing a mature, liquid housing finance market. Furthermore, SRC's efforts include the development of Residential Mortgage-Backed Securities (RMBS) and global sukuk issuances to attract local and international investment.
Sectors
- Finance
- Real Estate
Geography
- Saudi Arabia – The article focuses on transactions and strategic developments within Saudi Arabia's banking and housing sectors as part of Vision 2030.
Industry
- Finance – The article is primarily concerned with financial transactions between banks, specifically mortgage refinancing and related activities.
- Real Estate – The discussion centers around mortgage portfolios, housing finance, and the facilitation of homeownership, key components of the real estate sector.
Financials
- $907 million – The value of the mortgage portfolio deal between SRC and SNB.
- SAR 3.4 billion – The equivalent value in Saudi Riyals for the transaction.
- SAR 1 billion – The value of the previous mortgage portfolio acquired by SRC from Bidaya Finance.
- SAR 5 billion – The value of the mortgage portfolio acquired by SRC from Al Rajhi Bank in 2023.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Saudi Real Estate Refinance Company (SRC) | Buyer | Company | Owned by the Public Investment Fund (PIF), SRC is a key player in the refinancing market, focusing on boosting liquidity and advancing the mortgage sector in Saudi Arabia. |
| Saudi National Bank (SNB) | Seller | Company | As the largest bank in Saudi Arabia, SNB is a significant participant in the mortgage market, looking to optimize its asset portfolio in terms of liquidity and interest rates. |
| Public Investment Fund (PIF) | Owner of Buyer | Company | Saudi Arabia's sovereign wealth fund which aims to drive the kingdom's economic diversification and long-term growth. |
| Majeed Al-Abduljabbar | CEO | Person | CEO of Saudi Real Estate Refinance Company, highlighting SRC's strategic initiatives in the housing finance market. |
| Brinda Darasha | Reporter | Person | Journalist reporting on the financial transaction. |
| Seban Scaria | Editor | Person | Editor who oversees the publication of the report. |
| Chiradeep Ghosh | Analyst | Person | Banking analyst at SICO Bank, providing insights into the implications of the deal. |