Subsidiaries and International Branches


Name of Subsidiary Capital

(SAR’ 000)
Ownership of
the Company
Country of
Country of
Al Rajhi Limited Company – Malaysia 1,051,714 100 Malaysia Malaysia
Al Rajhi Capital – KSA 500,000 100 KSA KSA
Al Rajhi Takaful Agency Company – KSA 2,000 99 KSA KSA
Al Rajhi Development Company – KSA 1,000 100 KSA KSA
Al Rajhi Company for management services – KSA 500 100 KSA KSA
Emkan Finance Company – KSA 500,000 100 KSA KSA
Tawtheeq Company – KSA 10,000 100 KSA KSA
Al Rajhi Financial Markets Ltd. – Cayman Islands 188 100 Cayman Islands Cayman Islands


Name of International Branch Capital

(SAR’ 000)
Ownership of
the Company
Country of
Country of
Al Rajhi Bank – Kuwait 389,888 100 Kuwait Kuwait
Al Rajhi Bank – Jordan 264,843 100 Jordan Jordan


International Business Group Highlights 2020

SAR ’000 Revenue Expenses Net profit
Kuwait 32,951 53,259 -20,308
Jordan 143,760 105,544 38,217
Malaysia 148,493 204,548 -56,055


Investment services and brokerage (Al Rajhi Capital)

Al Rajhi Capital continued to grow its institutional as well as its asset management business during the year under review, while also investing in upgrades to its brokerage systems to improve efficiency and effectiveness.

Embracing change

The global pandemic impacted Al Rajhi Capital in much the same way as it affected many other businesses in the Kingdom with challenges arising due to country-wide lockdowns and the increasing uncertainties in the financial market. With prompt and prudent action by the Management team led by the newly appointed Chief Executive Officer, however, many risks were mitigated early on. For instance, employees were provided with the necessary equipment for working from home without delay so that they were able to continue productively.

From a business perspective, the events of the year under review positively impacted the Al Rajhi Capital brokerage business due to an increase in value traded in the Saudi market. A decline in interest rates, however, affected management income from money market funds, while the lockdown contributed to volatilities in real estate rental income. With most owned real estate being industrial in nature, such as warehouses located in prime locations, the impact was minimal.

During the year under review, Al Rajhi Capital launched its “2023 Corporate Strategy” which combines the subsidiary’s best-in-class investment advice, product portfolios and insightful research to deliver fully integrated and streamlined solutions with the strength and resources of the Bank’s global presence. The Strategy is geared to ensure that Al Rajhi Capital remains a market leader in the delivery of bespoke financial and investment solutions while addressing the ever changing needs of clients, institutional customers and high-net-worth individuals.

Major developments

The Al Rajhi Saudi Equity Fund performance for 2020 was 19.41%, outperforming its benchmark by 7.47% whereas the Al Rajhi GCC Equity Fund and Al Rajhi MENA Dividend Growth Fund performance for 2020 were 16.81% and 14.99% respectively, outperforming their benchmarks by 7.81% and 6.73% respectively. Moreover, by end 2020, Al Rajhi Commodity SAR Fund’s year to date performance at end 2020 was 1.65%, while the Al Rajhi Commodity USD Fund’s year to date performance closed at 1.40% at end 2020. The Sukuk Fund year to date performance at end 2020 was 3.88%.

Al Rajhi Capital was appointed joint financial advisor and underwriter in Mobile Telecommunication Company Saudi Arabia’s (Zain KSA) subscription to new shares and rights. Zain KSA’s SAR 4,500 Mn. rights issue transaction was successfully closed in November 2020.

Al Rajhi Capital was crowned a Lipper Fund Award Winner for the Saudi Arabia Fund Industry 2020 for the Al Rajhi Multi Asset Conservative Fund, as Best Fund Over Five Years in the Mixed Asset Other Conservative category. These highly-respected awards recognise funds and fund management firms that have excelled at providing consistently strong risk-adjusted performances relative to their industry peers – the merit of the winners is based on objective, quantitative criteria.

Future outlook

In line with the BOTF strategy, Al Rajhi Capital will continue to build on the core through providing best in class solutions and digitally enhance the product offerings for retail customers to protect its market share. Moreover, the subsidiary will increase the efforts to provide investment solutions and services, investment advice and insightful research to retail, high-net-worth individuals and institutional clients.

Al Rajhi Bank – Malaysia

With the pandemic affecting the Malaysian economy quite badly, various stimulus initiatives were introduced including instalments moratorium to individuals and business customers affected by the pandemic.

Expanding the business

Having gained the distinction of being one of the first foreign banks in Malaysia under the Islamic Financial Services Act 2013 Al Rajhi Bank – Malaysia is the first stop in the journey of expansion into Southeast Asia. In operation in Malaysia for the past 14 years and following a business transformation programme in 2017, Al Rajhi Bank – Malaysia now operates with 16 branches with assets RM 7 Bn. With its strong credit risk standard, and provisions for credit losses remain at an adequate level. True to
Al Rajhi Bank’s corporate values where customers and employees remain a priority, customer complaints were maintained at under 0.5%.

In line with its aspiration to expand to other Southeast Asia countries, Al Rajhi Bank – Malaysia signed a collaboration agreement with PT Artajasa Pembayaran Elektronis (“Artajasa”) in February 2020. This first-of-its-kind collaboration reaffirmed the Bank’s commitment to providing Sharia-compliant banking solutions for customers, particularly for pilgrims. Artajasa being Indonesia’s largest National Payment Gateway service provider with connectivity to all 120 banks, more than 4,000 post office and major digital players will open up vast opportunities for Al Rajhi Banking Group. The partnership among others, serves to expand the cross-border ATM network reach for Artajasa member banks’ customers to access over 5,200 Al Rajhi Bank ATMs in Saudi Arabia.

As a Malaysian licensed financial institution, Al Rajhi Bank – Malaysia participated in stimulus initiatives and continues to assist customers in easing their financial burdens.

Weathering the challenges of 2020

During the year under review, Al Rajhi Bank – Malaysia dealt with headwinds arising from the global COVID-19 pandemic, lower oil prices, a low interest rate environment, increased compliance costs and an uncertain political environment. These challenges constrained a streak of achieving double digit net profit; an effect that was particularly pronounced in the second and third quarters as restrictions on the movement of individuals and businesses were imposed by the Government of Malaysia.

The fourth quarter of 2020 allowed for some breathing space after the Government loosened restrictions on movement. In tandem with more robust economic activities, the need for financing has increased while liquid Current Accounts and Savings Accounts (CASA) positions have improved and demand for Treasury solutions have increased especially in foreign exchange and the Sukuk market.

Enhancing digitalisation

Customers can now check their account details, move money, pay bills, and more at their convenience, 24 hours a day, seven days a week, no matter where they are. This focus on digitalisation proved to be timely with online transactions during the year under review rising to almost 40% of total customer transactions.

Al Rajhi Bank – Malaysia will also actively promote a culture of innovation to ensure that its people have the right mindset to embrace change in keeping with technological advancements.

Introducing new products and services

Musafir Switching System was introduce which enabled direct connectivity with the Al Rajhi Bank network in Saudi Arabia. Mobile Internet Banking proved particularly timely given the pandemic-related restrictions.

Al Rajhi Bank – Malaysia also launched BNM Special Relief Financing Scheme to provide immediate cash flow support to SME businesses that were adversely impacted by COVID-19 restrictions.

Other products and services launched during the year were Business Financing Term Takaful (BFTT), a referral programme for SME Platinum-I, and Banca Takaful Mortgage Reducing Term Takaful (MRTT).

Future outlook

Al Rajhi Bank - Malaysia will continue to focus on five key pillars for 2021:

  • Increase assets and financing growth
  • Increase in non-yield income growth
  • Increase operational efficiency in a cost-effective manner
  • Grow CASA
  • Improve cost to income ratio

As a result of the Bank's BOTF Strategy (refer page 41), this international subsidiary will look to expand its digital capabilities in both sales and service. With its customers increasingly turning to digital options in all areas of their lives Al Rajhi Bank – Malaysia is focused on delivering the best digital banking value proposition in the market.

Al Rajhi Bank – Jordan

The strong fundamentals of Jordan’s banks and their ability to generate sufficient profitability to absorb costs of risk are expected to lead to a stable outlook in the banking sector.

Sustaining prudent growth

Despite the challenging conditions of the year under review, Al Rajhi Bank – Jordan was able to sustain its customer base, increasing the number of new customers by an additional 2,000.

To help neutralise the effect of the pandemic-related restrictions, Al Rajhi Bank – Jordan launched a deposit campaign incentive programme for employees. This programme helped raise customer liabilities by almost 7% in 30 days. A campaign targeting Retail Banking customers was also launched to promote Car, Personal, and Home Finance products. This campaign successfully contributed towards asset quality.

Managing the crisis

Al Rajhi Bank – Jordan implemented business continuity plans following the initial lockdown and focused on directing proper information regarding the pandemic to all employees. This information was assessed and upgraded periodically. Teams were physically split between various locations with minimum resource requirements and effective working from home arrangements also implemented. Al Rajhi Bank – Jordan also adopted a number of digital measures to facilitate working from home to ensure that employees remained safe and productive during the periods of lockdown. Online training for employees in Retail Banking and the Graduate Development Programme for talented young graduates continued as planned.

To assist customers during these difficult times Al Rajhi Bank – Jordan deferred financing instalments for customers and waived certain fees in relation to cash withdrawals and electronic services as stipulated by regulators. Reinforcing the brand as one that supports local communities, Al Rajhi Bank – Jordan also donated a sum of SAR 2.6 Mn. to the Ministry of Health and the Himmat Watan Fund towards the safety and health of citizens and their protection from the spread of COVID-19.

Future outlook

The pandemic is dealing a strong blow to Jordan’s economy; however there are positive signs for a rebound in 2021. The economic recession caused by the pandemic is expected to stymie growth in all segments of the market, stifling loan growth in the banking sector and posing credit challenges.

Over the next three years, Al Rajhi Bank – Jordan will be expanding its branch network by five to reach a total of 15 with two new branches planned for 2021. Al Rajhi Bank – Jordan will also be diversifying its product offering in the short term including by introducing a local shares financing product.

The Core Banking Replacement project, which is currently underway, will pave the way for fully digital services within the next three years. Long awaited enhancements to customer segmentation, MIS reporting, and re-designing of operations re-design will allow Al Rajhi Bank – Jordan to offer more sophisticated and customised solutions to targeted customers.

This international subsidiary will continue to benefit from the Bank’s BOTF Strategy (refer page 41). In line with this strategy Al Rajhi Bank – Jordan will focus on providing the best customer experience with a differentiated and focused digital marketing approach supported by digital-ready platforms.

Al Rajhi Bank – Kuwait

Al Rajhi Bank – Kuwait will also focus on the quality of assets and returns rather than volume, introducing FX forwards to attract some of the larger companies in Kuwait. It will also focus on maximising non-profit bearing deposits to improve margins and explore possible additions to the revenue stream by providing online virtual platforms to customers.

Overcoming challenges

While its economic performance was impacted by the twin shocks of COVID-19 and the oil price slump, the State of Kuwait was less exposed to internationally hard-hit sectors than its GCC neighbours. Despite these challenges, the gradual reversal of notional losses is expected to ultimately boost profitability from 2021 onwards.

Income generated from foreign exchange deals reached record levels during the year and Al Rajhi Bank – Kuwait reports no non-performing loans (NPLs) for Corporate Banking customers.

Furthering digitalisation

During the year under review, Al Rajhi Bank – Kuwait implemented a new Customer Relationship Management (CRM) system to better manage customer account information.

Phase 1 of the planned mobile app enhancements was also completed with the look and feel of the app upgraded to improve customer experience, while speed and accessibility were also enhanced. All SMS text transactions on account level to customers has also been revised, improved and enhanced to reflect professional and market practice.

Al Rajhi Bank – Kuwait also complied with the VISA PIN mandate to allow not only its own customers the capacity to change their credit card PINs but also for customers of other banks.

Al Rajhi Bank – Kuwait has also successfully completed preparations for the Central Bank-initiated Kuwait National Payment System (KNPS) project and is ready to launch on command.

The development of a cybersecurity framework which included risk profiling and baseline self-assessment continued as planned. Projects such as the Sinnad Debit Card migration were completed on time with Al Rajhi – Kuwait ensuring that business continuity was not impacted by the pandemic.

During the year under review, Al Rajhi Bank – Kuwait complied with regulatory requirements on updating mobile numbers via an ATM making sure that customers making such changes receive a One Time Password (OTP) and ensuring the ATM deposit limit is within the nominated limit.

Improving security

Al Rajhi Bank – Kuwait launched 3D Secure to safeguard debit and credit card transactions online. This online shopping service is designed to protect credit cards from fraud and misuse when they are used for purchases on the Internet without fear of the unauthorised use of credit card information in unlawful transactions.

Al Rajhi Bank – Kuwait also upgraded all debit and credit cards with smart chips and NFC technology. For employees, Al Rajhi Bank – Kuwait successfully replaced the fingerprint attendance system with face recognition software to help curtail transmission of infections.

An IFRS 9 day 1 loss model was also developed in-house to facilitate the determination of loss impact on deferment of instalments.

Future outlook

Al Rajhi Bank – Kuwait will aim to increase market penetration by introducing new branches and a digital platform to support acquisition of new customers. While expanding to new sectors to reach untapped groups of potential Corporate Banking customers, Al Rajhi Bank – Kuwait will also encourage collateralisation either through tangible assets or indirect proceeds of government projects.

In addition, the subsidiary will explore new investment opportunities to generate higher yield and equivalent credit rating while maintaining robust risk management controls.

To facilitate better customer service, Al Rajhi Bank – Kuwait has implemented an internal customer relationship management (CRM) solution within the banking application to smoothen and maintain a well-organised process related to customer requests. At the same time, the application assists employees in channelling business leads to relevant sales and marketing teams.

Other activities in the pipeline include improvements to digital channels and other customer touchpoints as well as the review of the subsidiary’s sales policy, offers and sales cadre.

In line with the Bank's BOTF Strategy (refer page 41) to deliver the best digital bank value proposition, Al Rajhi Bank – Kuwait will capitalise on the Bank's success in digital banking. This international subsidiary will continue its focus on modernising and upgrading its critical infrastructure while offering customers the best digital banking experience.