Saudi Arabia's Riyad Bank, the kingdom's third-largest lender by assets, announced on Thursday that its board is considering an initial public offering (IPO) for its investment banking arm, Riyad Capital. The move underscores the bank's strategic assessment of its business portfolio and potential opportunities in the market.

Backed by the kingdom's sovereign wealth fund and government, Riyad Bank's board issued a resolution to evaluate the readiness of its investment banking unit for an IPO. This assessment includes determining the size and structure of the potential offering, subject to regulatory approvals. The proposed IPO reflects broader trends in Gulf markets, which have seen increased IPO activity driven by favorable conditions such as high oil prices and foreign investor interest despite global dealmaking challenges.