Saudi Arabia’s Public Investment Fund (PIF) has signed a $185m subscription agreement with Amman, Jordan-based Capital Bank Group.
The agreement will see PIF become a strategic investor in the Jordanian banking group.
Upon the successful execution of the transaction, PIF will own a 23.97% stake in the Capital Bank, which will issue 63 million in new shares.
Capital Bank aims to increase its capital through the deal, thus raising its total shareholders’ equity to around $846m.
The proceeds will also support the banking group’s ability to execute its strategy and expand its businesses.
The expansion plan includes launching new products and services in Jordan, Iraq, Saudi Arabia and other markets where it operates.
Additionally, the group’s investment arm, Capital Investment, will be used to support its expansion.
Furthermore, Capital Bank will use PIF’s investment to further its digital transformation plans, including launching digital banks.
PIF said: “This deal is in line with PIF’s strategy, which includes exploring new investment opportunities in the MENA region that support the creation of long-term strategic economic partnerships to achieve sustainable returns that contribute to maximizing the Fund’s assets and diversifying Saudi Arabia’s economy in line with Vision 2030.”
With $8.4bn (JOD6bn) in assets, Capital Bank is one of the key players operating in Jordan and regional markets.
The investment fund noted that the banking group has a ‘strong’ financial and credit position, following the acquisition of Bank Audi’s local and Iraqi assets and the Société Generale – Jordan.