Saudi Telecom Co (STC), the Gulf's largest telecommunications operator by market value, has established a 5 billion ($1.33 billion) riyal-denominated sukuk programme, it said in a bourse statement on Wednesday.

The programme will be by way of a local private placement, STC said.

The operator did not state when it planned to issue a sukuk, but Reuters reported in April that STC had picked three banks to manage its debut Islamic bond offer, according to sources.

These are JP Morgan Chase, Standard Chartered and the investment banking arm of Saudi Arabia's National Commercial Bank, the sources said.