Saudi Arabia’s state-owned Public Investment Fund (PIF) has acquired a $23.97% stake in Jordan’s Capital Bank Group for $185 million.
The Saudi sovereign wealth fund, which manages assets worth more than $620 billion, said it bought the stake by subscribing to new shares. This will raise the Jordanian group’s total shareholder’s equity to around $846 million.
The deal will enable the Capital Bank Group to expand its business by introducing new services and products in Jordan, Saudi Arabia, Iraq and other markets, PIF said.
The deal, which is subject to completing certain conditions and obtaining approvals, comes even as PIF has been trying to diversify its portfolio in line with the Saudi Arabian government’s Vision 2030, which seeks to reduce the dependence of the country’s economy on fossil fuels.
“These opportunities 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,” the PIF said.
Capital Bank Group is one of the top financial institutions operating in the Jordanian and regional markets, with assets of JOD6 billion ($8.4 billion).
The group includes Capital Bank, which has grown to become one of the top financial institutions in Jordan since its inception in 1995. The bank offers commercial and investment banking services and caters to both retail and corporate clients. In 2005, Capital Bank purchased a majority stake in National Bank of Iraq.
Capital Investments, a wholly owned subsidiary of Capital Bank, was established in 2006 and offers investment banking services to its clients through its offices in Jordan and the United Arab Emirates.
The group also acquired Bank Audi’s operations in both Jordan and Iraq in 2021. In 2022, it acquired the branches and operations of Société Générale Bank in Jordan. In early 2022, Capital Bank launched its digital bank Blink to target a younger demographic.