Saudi’s SRC, Alrajhi Bank sign landmark refinancing deal
The deal is the largest of its kind signed in the Saudi banking industry
The Saudi Real Estate Refinance Company (SRC), which is wholly owned by the Public Investment Fund (PIF), signed a portfolio purchase agreement with Alrajhi Bank, considered the world’s largest Islamic bank by mortgage assets and market cap, to refinance more than SAR5bn real estate financing portfolio.
The deal signed by Alrajhi Bank and SRC is the largest of its kind signed in the Saudi banking industry.
It reflects the ongoing efforts by SRC to support development in the residential real estate finance sector by expanding its refinancing portfolio, and solutions to create a stable secondary real estate market in the kingdom.
Fabrice Susini, CEO of SRC said: “SRC’s agreement with Alrajhi Bank is a significant milestone in our strategic approach to help accelerate growth in the kingdom’s thriving housing market.
“It is part of our strategic partnerships with leading financiers and originators which underpin our efforts to develop a best-in-class secondary mortgage market in the kingdom.
“In addition, by providing our solutions, we continue to help accelerate the growth of affordable home financing and expanding citizens’ access to homeownership, in line with Vision 2030 goals.”
Alrajhi Bank – SRC joint drive
Waleed Abdullah Almogbel, CEO of Alrajhi Bank stated: “This significant deal and our strategic partnership with SRC support our ongoing joint drive to offer customers more access to flexible and affordable home financing solutions.
استمراراً لجهودنا في تقديم حلول مبتكرة ومرنة للمواطنين، شهدنا اليوم توقيع اتفاقية بين @Alrajhibank و @saudirefinance بقيمة ٥ مليار ريال، والتي تهدف إلى توفير حلول عقارية سكنية متعددة تُسهم في توفير خيارات ملائمة للمستفيدين pic.twitter.com/K5xQRuAy04
— ماجد الحقيل (@majedhogail) March 19, 2023
Alrajhi Bank and its deal with SRC “strategically enhances our mortgage solutions and supports our established capabilities to address the needs of a broad customer base and the increasing demand for home ownership in the kingdom”, said Almogbel.
This latest agreement with Alrahji Bank is a series of similarly significant deals carried out by SRC to support mortgage financiers and originators in order to broaden Saudi citizens’ access to more affordable and flexible home financing solutions that suit their needs.
Through these agreements, SRC provides liquidity, capital management and balance sheet de-risking solutions to enhance real estate financiers’ and originators’ financing capacity. This will ultimately leads to increasing demand for home ownership in the country.
Other developments
Earlier this month, PIF -owned SRC said it will lower the mortgage benchmark curve (Long-Term Financing Rate or LTFR) by 26 basis points for mortgage tenors from 20 to 30 years.
Read: Saudi Real Estate Refinance Company lowers long-term finance rate on mortgages
The rates for mortgages shorter than 20 years remain the same.
Read: Saudi’s PIF invests $1.3bn in four local construction companies
In real estate-related developments, Saudi Crown Prince and Prime Minister Mohammad bin Salman bin Abdulaziz, recently launched a new company to undertake an ambitious development project in the country’s capital.
It is expected to add SAR180bn to the country’s non-oil GDP and create 334,000 direct and indirect jobs by 2030.
