DUBAI, April 4 (Reuters) - Saudi Arabia's Riyad Bank, the kingdom's third biggest lender by assets, said on Thursday its board was considering an initial public offering of its investment banking arm, Riyad Capital.

The lender, which is backed by the kingdom's sovereign wealth fund and the government, said its board issued a resolution to assess the unit's readiness, which includes determining the size and structure of any potential IPO.

Riyad Bank is 21.75% owned by the Public Investment Fund and 10.39% owned by the government of Saudi Arabia.

Gulf markets have been riding an IPO boom over the last two years on high oil prices and foreign institutional investor interest, bucking a global dealmaking slump caused in part by high interest rates.

(Reporting by Hadeel Al Sayegh; editing by Jason Neely)

((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;))