Saudi Hollandi Bank <1040.SE>, partly owned by the Royal Bank of Scotland , got approval from the Saudi authorities for its 20 percent capital increase, the bank said in a regulatory filing on Sunday.

The increase, which has to be completed within the next six months, will see the bank's capital increased to 3.97 billion riyals (686 million pounds) from 3.31 billion riyals, the statement said.

Such increase will be paid by transferring an amount of 661.5 million riyals from retained earnings account to the bank's capital, the statement added.

Saudi Hollandi had said last month it will distribute one bonus share for every five shares owned, subject to regulatory and shareholder approval, with the capital increase aimed at supporting the bank's growth.

(Reporting by Asma Alsharif; Writing by Mirna Sleiman; Editing by David French)