Saudi Hollandi Bank, Saudi Arabia's eighth-largest listed bank, plans to sell a capital-boosting Islamic bond to private investors, it said, the latest lender in the kingdom to bolster its reserves after strong lending growth.

The lender said its board approved plans to issue the Islamic bond subject to approval from relevant authorities. It did not mention the amount it plans to raise from the offer.

In a separate statement, the bank said it would hold a shareholder meeting on October 28 to seek approval for the Islamic bond offering.

Saudi banks are well capitalised compared with their Western peers - Saudi Hollandi's capital adequacy ratio, a measure of a bank's financial health, was 16.4 per cent at the end of the second quarter, according to its financial results.

However, some have sought to boost their capital ratios in recent months following years of high lending growth.

While bank lending to the private sector grew at its weakest rate for nine months in August, according to central bank data released on Thursday, the level was still 15 per cent higher than the same month last year.

Saudi Hollandi sold a SR1.4 billion ($373.3 million) Islamic bond in November to boost its Tier 2, or supplementary capital. The seven-year offering, with an option to be redeemed by the issuer after five years, was priced at 1.15 per cent over the six-month Saudi interbank offered rate.

Saudi British Bank, an affiliate of HSBC, aims to sell an Islamic bond by year-end to strengthen its capital base, sources told Reuters last month, and Banque Saudi Fransi, part-owned by Credit Agricole, completed a 1.9 billion riyals subordinated sukuk in December.-Reuters