October 9, 2018 / 1:04 PM / in 2 months

Saudi's NCB Capital advises finance firms on IPOs -sources

DUBAI, Oct 9 (Reuters) - NCB Capital, the investment banking unit of Saudi Arabia’s largest lender, is advising two local finance companies, Amlak International for Real Estate Finance and Nayifat Finance, on possible share listings, sources familiar with the matter said.

The kingdom is encouraging more companies to list in a bid to deepen capital markets under an economic reform push aimed at reducing the reliance on oil revenues.

Both Amlak and Nayifat operate within sectors the government is keen to develop. Amlak, founded in Riyadh in 2007 with a paid up capital of 906 million riyals ($242 million), provides real estate financing, while Nayifat offers financing to small and medium-sized enterprises and consumer finance.

The government has set a target for the mortgage market to reach a total value of 502 billion riyals by 2020 from a current 290 billion riyals, while it also wants to raise SMEs’ financial sector financing to 5 percent by 2020 from 2 percent now.

Amlak’s shareholders include the Saudi Investment Bank and Amlak Finance, a Dubai-based Islamic mortgage company. The company has assets of around 3.1 billion riyals. Nayifat has assets of around 1.9 billion riyals.

NCB Capital declined to comment, while Amlak and Nayifat did not respond to requests for comment.

Activity in the public market has been subdued in recent months, with several companies delaying flotations. Initial Public Offerings for ACWA Power, Saudi Stock Exchange and Arabian Centres have all stalled.

$1 = 3.7503 riyals Reporting by Tom Arnold and Hadeel Al Sayegh, editing by Louise Heavens

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