Saudi Arabia's Arab National Bank has received regulatory approval to raise SR2 billion ($533.28 million) through sukuk which will enhance its supplementary capital, it said in a statement on Wednesday.

The kingdom's seventh-largest lender by assets will privately place the Tier 2 sukuk with a tenor of 10 years although it allows the issuer to redeem the security after five years.

Arab National Bank joins a string of Saudi Arabian banks that have sought to replenish their capital reserves in the last couple of years by issuing capital-boosting bonds and bonus shares following a period of strong lending growth.

Sources told Reuters in June that Riyad Bank had completed a sukuk worth SR4 billion which would enhance its Tier 2 capital while Saudi British Bank privately placed a SR1.5 billion subordinated Tier 2 sukuk in May.

Capital reserves are high in Saudi Arabia due to the kingdom's conservative regulatory standards. - Reuters