SRC buys portion of ANB’s housing finance portfolio

The Saudi Real Estate Refinance Company (SRC), the mortgage finance giant owned by the Kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), said on Tuesday that it had bought a “significant portion” of the housing finance portfolio owned by Arab National Bank (ANB).

According to an SRC statement, the agreement will “provide liquidity to ANB, which in turn provides greater homeownership opportunities for over 2 million of the bank’s customers.”

The move is part of the Saudi government’s wider Vision 2030 goal to increase long-term liquidity in the housing financing market and boost the rate of Saudi homeownership to 70 percent by 2030.

“SRC will continue to cultivate partnerships to help realize the objectives of the housing program, one of the Kingdom’s Vision 2030 programs, through facilitation of liquidity provision to originators and enabling affordability of home financing to Saudi families,” Fabrice Susini, CEO of SRC, said.

Salah Bin Rashid Al-Rashid, ANB chairman, added: “We are proud of our partnership with SRC which will enable the bank to recycle the liquidity resulting from the sale process and inject it back into the real estate financing market. This will also stimulate the bank’s refinancing activity.”

The SRC in March issued a SR4 billion ($1.07 billion) domestic sukuk — the Islamic equivalent of a bond. Susini told Arab News in May that the SRC’s current balance sheet had more than tripled between the end of 2019 and the end of 2020, but did not rule out going back to the market for another capital injection.

Established in 2017 and fully owned by the PIF, the SRC is often referred to by Reuters as the Saudi equivalent of US mortgage finance giant Fannie Mae. In its review of Saudi Arabia’s Vision 2030 programs earlier this year, the Council of Economic and Development Affairs pointed out that the rate of homeownership in the Kingdom had increased to 60 percent, compared with 47 percent five years ago.