(Bloomberg) -- Saudi Arabia’s second-biggest bank raised over 5 billion riyals ($1.3 billion) from the sale of some of its real estate loans to a state-backed finance company, in the largest deal of its kind so far in the country.

Al Rajhi Bank, the largest lender in the kingdom by assets after Saudi National Bank, sold a portfolio of real estate loans to the Saudi Real Estate Refinance Co., the state-run equivalent of Fannie Mae and Freddie Mac in the US, according to a statement. The deal is the largest of its kind in the country, the state-run company said in the statement.

SRC, as the Real Estate Refinance Co. is known, is expecting more banks to sell off parts of their mortgage book as they look to ease liquidity pressure that have pushed borrowing costs close to a record high. 

Saudi Arabia’s mortgage market has ballooned over the past few years, but the rapid rise in home loans has stretched capacity to keep lending. Mortgage approvals by banks have slowed over the past year as banks struggled with tight liquidity and buyers faced soaring interest rates and rapidly rising home values.

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