Mr Abdullah Sulaiman Al Rajhi, CEO of Al Rajhi Bank, declared that the bank had made net profits last year in 2007 amounting to SR 6,450 million, compared to SR 7,302 million in 2006, which represents a decline of 11.7% mainly driven by the presence of exceptional profits of SR 639 million in Q4 06' as non-operating income that was advertised at the time and included in financial disclosure lists. Excluding the impact of exceptional profits, the annual profits in 2007 show a slight decrease of SR 213 million, a fall of 3.1% due to the drop in income from the Saudi stock market where the volume of transactions and the proportion of commissions has declined, in addition to reduced income from customer fees.
Profits for Q4 07' reached net SR 1,576 million compared to SR 2,080 million in Q4 06', representing a drop of 24.2%. However, if the impact of exceptional profits is excluded, profits for Q4 07' show an increase over Q4 06' of SR 135 million, a rise of 9.3%. In addition, net investment income amounted to SR 2,003 million compared to SR 1,814 million, a rise of 10.4%, and banking services income rose to SR 370 million compared to SR 239 million, a rise of 54.6%..
Mr Abdullah Sulaiman Al Rajhi also explained that the annual financial results for the period ending in 31/12/2007 compared with the annual period ending 31/12/2006 showed net investment income of SR 7,722 million compared to SR 6,826 million, a rise of 13.1%. Shareholder rights rose to SR 23.6 billion compared to SR 20.2 billion, a rise of 17.0%, net assets rose to SR 124.9 billion compared to SR 105.2 billion, a rise of 18.7%, and customer balances increased to SR 89.7 billion compared to SR 73.3 billion, a rise of 22.2% over 2006. The rate of return on assets was 5.6%, and the Bank achieved a 29.4% rate of return on shareholders rights , with a profit per share of SR 4.78 compared to SR 5.41, the bank continued to increase and enhance it's methods of preserving its financial position and status.
The CEO also announced that the Executive Board of Directors decided to recommend to the general assembly to increase the capital of SR 13.5 billion to SR 15 billion through granting free shares for every nine shares, whilst also deciding to distribute the amount of SR 675 million profits to shareholders for the second half of the year 2007 at SR 0.5 for each share that did not include shares in the event of the grant approval. This is in addition to SR 2025 million distributed for the first half at SR 1.5 per share with total dividends of SR 2700 million.
Mr Abdullah Sulaiman Al Rajhi, also stated Al Rajhi Bank's commitment to diversifying sources of income through development sectors and investment banking firms along with the expansion of the activities in retail banking, which continue to grow by meeting the needs of customers through delivery of quality products and services. He added that 2007 has witnessed lots of developments, including continuing the project of adding and updating 160 branches in all areas of Saudi Arabia and the launch of "Al Rajhi link" which is a new idea enabling better communication between branches customers, this was inaugurated in major commercial centres in Riyadh and Jeddah. Overseas, the expansion of bank branches in Malaysia has continued with 20 branches fully operational and serving a good number of customers by the end of 2007.
The year 2007 also witnessed the launch of an investment fund specializing in shares of petrochemicals and cement, and customers were also provided with the service of being able to open a bank account through electronic channels. In the area of retail banking , the "Istisna" product was launched as the first of a kind in the region to finance the housing building , also the real estate financing program was developed with a facility that offers a repayment period of 25 years.
Mr Abdullah AlRajhi also declared that Al Rajhi Bank had won several prizes and certificates during the last year, globally and locally, including winning first place in the e-business in the "digital Excellence Award" from the Ministry of Communications and Information Technology, and two prizes from the magazine "Asian Banker" as the best bank in the retail banking in the Gulf , the best bank in the retail banking in the kingdom and the award of Electronic Banks from Middle East Institute Award for Excellence.