UPDATE 1-Inma Bank seeks $2.8 bln in largest Saudi IPO

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RIYADH, Jan 8 (Reuters) - Inma Bank plans to raise 10.5 billion riyals ($2.8 billion) in April in Saudi Arabia's largest initial public offering (IPO), the Capital Markets Authority (CMA) said on Tuesday.

Inma will sell 1.05 billion shares representing a 70 percent stake from April 7, it said.

The IPO, which was delayed several times last year, could surpass the $2.72 billion Saudi Telecom Co 7010.SE raised in its public share sale in 2003 as the kingdom's largest. Saudi Telecom also sold shares to government funds taking the total raised to $4.08 billion.

The Public Investment Fund and two state pension funds -- the General Organisation for Social Insurance (GOSI) and the Public Pension Agency -- will equally share the remaining 30 percent of the bank's 15 billion riyals capital.

The government announced plans to set up the bank in 2006 at the height of a stock market crash which had wiped off more than half of the capitalisation of the largest Arab bourse.

That announcement prompted many existing lenders, such as National Commercial Bank and Samba Financial Group 1090.SE, to increase their capital.

The state-owned National Commercial Bank, the largest Saudi bank by assets, announced plans in March to raise its capital from 9 billion to 15 billion riyals through a bonus share issue.

Inma Bank's IPO will be open only to Saudi nationals. (Reporting by Souhail Karam; Editing by Erica Billingham)