ESG Report

ESG Highlights

Financial Sustainability

SAR 469 Bn.

Total assets

SAR 10.6 Bn.

Net profit after Zakat


Financing exposure in Tobacco, Alcohol and Gambling


Window film at branches to

reduce energy use


of loans and project finance integrate ESG factors

ISO Green Certification

for new head office building


Digital to manual ratio


SAR 49 Mn.

donation in 2020

SAR 1.2 Bn.

Zakat paid

SAR 3.0 Bn.

in salaries and benefits paid

SAR 6.5 Bn.

in financing for SMEs

7 batches

of Graduate Development programme since 2015


social responsibility programmes in 29 cities


of volunteering hours clocked


total training days


ISO 22301:

2019 Business Continuity Management


Sharia Board Resolutions


Policies and frameworks


Independent Board Directors

Gender Diversity


women-owned suppliers engaged


growth in female employees since 2015


portion of female employees


growth in female customers since 2015

The Bank’s approach to ESG

Taking its financial and social responsibilities seriously, the Bank is dedicated to remaining a well-managed, well-disciplined institution. While exercising sound governance practices that focus on financial intermediation and maturity transformation, two essential activities required for the economic development of the Kingdom, the Bank strives to live up to its societal duties to foster economic and social prosperity.

These responsibilities dictate its commitment to environmental, social and governance (ESG) practices.

The Bank has remained committed to providing Shariah-compliant banking services for the past three decades. With the guidance of an independent Shariah Board, comprising notable scholars who are specialists in this field, the bank has been able to ensure Shariah compliance both within the Kingdom and beyond. The responsibility for constituting the Shariah Board and approving its regulation lies with the General Assembly. In addition, it is compulsory for all Bank departments to comply with the Shariah Board’s resolutions (refer Sharia Group on page 87).

As S&P Global and others have pointed out, Sharia-led Islamic finance has much in common with environmental, social, and governance (ESG) considerations and the broader aim of sustainable finance. For instance, Zakat benefits social welfare by supporting people in need or those who have partially lost their income. Such support is provided without any expectations of repayment or remuneration. As households lose income due to COVID-19, S&P project that Zakat could help compensate for such losses.

While ESG integration, which is the systematic and explicit inclusion of ESG factors in financial analysis, has been gaining traction around the world, the most widely applied sustainable investment strategy globally is negative screening. Global management consultancy firm McKinsey & Company estimates that negative screening is used for two-thirds of sustainable investments. Negative screening involves excluding sectors, companies, or practices from investment portfolios based on ESG criteria. Islamic Banks do not participate in any investments that fail to meet Sharia guidelines – including alcohol, gambling and tobacco products. With zero exposure to such industries, the Bank remains protected from sectors that are at “high risk” of failing to meet ESG criteria. Through Sharia guidelines, Islamic banks perform a culturally distinct form of ethical investing.

2020 has seen the addressing of social aspects through discussion around the potential to use the social instruments of Islamic finance to help deal with the impact of COVID-19 on corporate entities and banks through unremunerated or subsidised liquidity. Such steps would contribute towards Islamic banks’ improved ability to manage the short-term loss in revenue and to preserve employment. Households would also benefit from social instruments used directly to bolster them through compensation for lost income and access to affordable healthcare and education.

ESG Management and Disclosure

Even before the impact of the global pandemic, emerging mega trends such as technological advancements, demographic changes, regulatory developments, and changing customer and stakeholder expectations, prompted the Bank to take a holistic and innovative view of sustainability, giving pride of place to the creation of value for all stakeholders over time.

In this way, the Bank has always integrated a range of ESG matters in its decision-making, including how it evaluates risks and opportunities. At the same time, Al Rajhi Bank remains committed to improving the way it communicates its management approaches, targets, performance and progress around material ESG issues
(refer Stakeholders on page 32).

The Bank has developed targets and benchmarks in several areas to drive and evaluate its progress with a dedicated ESG Committee overseeing the Bank’s ESG agenda. This team acts as a central resource and works with colleagues across the organisation to help identify and prioritise ESG issues, explore opportunities for improvement, and validate data for reporting.

While there are numerous ESG issues, risks and opportunities that demand attention, the Bank focuses on those that matter most to its stakeholders and business (refer Materiality on page 37). With ESG matters and expectations continuously evolving, the Bank conducts a regular materiality assessment which helps it to monitor, track and analyse ESG issues and the interests of stakeholders, both external and internal.

The Bank’s materiality assessment includes:

  • Corporate planning exercise
  • Analysis of emerging global and local trends
  • Review of industry issues and developments
  • Meetings with stakeholders and feedback received from multiple engagement channels


Providing timely and accurate performance results and strategic updates is a key priority for the Bank, which is proud of its sound reputation for communicating with investors in a consistent, comprehensive and precise manner, taking this responsibility far beyond the minimum regulatory requirements. The Bank provides information to investors and other stakeholders by various compliance related disclosures through the investor relations and governance sections of its website (refer also Stakeholders on page 32).

Improving ESG disclosures

Continuous improvement in the Bank’s ESG disclosures will include:

  • Increasing transparency on how the Bank manages its ESG issues
  • Disclosing the most relevant KPIs while embracing nonfinancial reporting standards such as GRI
  • Setting relevant targets and priorities to help create value and demonstrating, through this Annual Report, how the Bank plans to fulfil them

A dedicated team oversees the Bank’s ESG agenda and is the central resource, working with employees across the organisation to help identify and prioritise ESG issues, explore opportunities for improvement, and validate data for reporting.

The core values are complemented by the Bank’s policy on social responsibility. This policy outlines how the Bank contributes to sustainable development and the well-being of employees and their families, local communities and the broader society in which it operates.

Specifically, the policy articulates the Bank’s commitment towards:

  1. The internal environment (workplace)
  2. Employees
  3. Customers and shareholders
  4. Communities and society

While discussions on the internal environment and employees (refer Human resources on page 69) and customers and shareholders (refer Performance in 2020 and Business portfolio review starting from page 53) have preceded this section, the Bank’s commitment to communities and society is discussed within this chapter.

The ESG pillars correlated with the Bank’s contribution to the Sustainable Development Goals

ESG pillars Sustainable Development Goals The Bank’s contribution
Environment SDG 7 – Affordable and clean energy SDG 12 – Responsible Consumption and Production
  • Managing environmental impact
  • Financing renewable energy projects
Social SDG 1 – No poverty SDG 2 – Zero hunger SDG 5 – Gender equality SDG 8 – Decent work and economic
growth SDG 9 – Industry, innovation and infrastructure SDG 10 – Reduced inequalities SDG 11 – Sustainable cities and communities
  • Sustainable finance
  • Responsible customer relations
  • Digital leadership
  • Financial inclusion
  • Community projects and sponsorships
  • Employee volunteering
  • Responsible employer
  • Responsible procurement
Governance SDG 8 – Decent work and economic growth SDG 16 – Peace, justice and strong
  • Corporate governance
  • Managing risk
  • World class compliance framework

The Bank’s contribution towards the SDGs

Managing environmental impact

The Bank remains committed to better understanding, managing, and reducing its operational impact on the planet. To do so the Bank makes every effort to reduce its environmental footprint while being transparent about performance – especially lending and investment activities. The Bank provides ethical screening with procedures in place for assessing environmental risks. Such processes ensure that projects that are funded by the Bank do not have a negative impact on the environment.

The Bank is also keen to reduce its impact on the environment as far as possible. For instance, its Head Quarters building has received ISO green certification.

Measures to reduce wastage of water, electricity and paper have been in place across the Bank’s various premises with employees having been made aware of the importance of conserving environmental resources for future generations. Lockdown-related restrictions have meant that the use of such resources throughout bank premises was significantly reduced during the year under review. The use of window film at branches, such as those in Riyadh, allows natural light in – eliminating the need for electric lights during the day but keeping excessive heat out so that energy used for cooling interiors need not be increased.

The Al Rajhi Development (ARD) department closely monitors the Bank’s energy data to identify trends, compare against benchmarks, and support long-term capital upgrades to the Bank’s facilities.

By exerting its influence on customers and managing its own environmental footprint, the Bank contributes towards SDG 12: Responsible Consumption and Production.

Financing renewable energy projects

As part of Saudi Arabia’s Vision 2030 and the King Salman Renewable Energy Initiative, the government established the National Renewable Energy Program (NREP) with the aim of maximising the potential of renewable energy in Saudi Arabia. The programme sets out an organised road map to diversify local energy sources, provide sustainable economic stability and fulfil the Kingdom’s commitments to reduce carbon dioxide emissions.

The Ministry of Energy, through the NREP, has awarded 2,170 MW of renewable energy capacity in the Kingdom to date, of which 700MW was awarded in 2019 and a further 1,470 MW in 2020.

In line with the Bank’s dedication to support landmark projects that provide significant environmental and social benefits and the goals of Vision 2030, the Bank provided financing support to five out of the six renewable projects awarded in 2020 with a combined project value in excess of USD 1 Bn.

In supporting these projects, the Bank has become the largest lender to the Kingdom’s renewable energy projects in 2020 and has successfully partnered with some of the world’s leading international renewable developers as well as local developers and technology providers.

During the year under review, Al Rajhi Bank also acted as mandated lead arranger to ACWA Power led consortium on USD 494 Mn. financing of the Jubail 3A Independent Water Plant (IWP) which is projected to generate 600,000 m3 of potable water per day – greatly contributing to the Kingdom’s efforts to ensure water security. The greenfield sea water reverse osmosis desalination project is the second major Public Private Partnerships (PPP) project to have been closed by the Bank in the last quarter of 2020.

The Bank’s green financing strategy contributes towards the fight against climate change and SDG 7: Affordable and Clean Energy.

Sustainable finance

Providing Sharia-compliant financial solutions, the Bank avoids funding projects that pose negative environmental or social risks. Credit risk assessments incorporate statistical risk models and other evaluation tools while employees involved in lending are trained to ensure that the Bank's loan portfolio remains compliant. While the Bank renegotiates loans to customers facing financial difficulties through its forbearance policy, it remains committed to integrating broader ESG evaluations in its lending process. Thanks to the Bank’s prudent risk measures and significantly low risk profile, it has the highest non-performing loan (NPL) coverage ratio and very low NPL compared to peers.

Through its dedication to sustainable finance, the Bank contributes to SDG 11: Sustainable cities and communities.

Responsible customer relations

Bank policies such as the employee code of conduct, client charter and banking consumer protection principles, outline the Bank's commitment to conducting business responsibly while safeguarding customer interests (refer Human resources on page 69) and deepening financial inclusion within the Kingdom. The Bank is also committed to being professional, fair and transparent in its dealings as it strives to improve financial literacy within the Kingdom, especially among low-income groups. The constant evaluation of customer feedback, through channels such as the Net Promoter Score and Voice of Customer programme, moves the Bank closer to the co-creation of products and services that best suits customer needs.

During the year under review the Bank achieved its target of being the most recommended bank (refer Value Drivers: 2020 at a Glance on page 12). The Bank’s NPS has increased, reaching nearly 66% during the year under review.

The Bank's Customer Experience Council, Customer Experience Department and Service Improvement team further enhance the Bank’s customer centricity.

Being customer centric helps the Bank to contribute towards SDGs 10: Reduced Inequalities as it strives to promote economic inclusion for all.

Digital leadership

The Bank's commitment to furthering digital banking, digitalising and automating systems and processes for greater efficiency, and bringing useful innovations to the market (refer Digital footprint and transformation on page 83) are sealing its position as a leader in digital banking. 83% of all Bank transactions during the year under review were digital. Financing transactions conducted through digital channels totalled SAR 11.8 Bn., in 2020.

The Bank continues to be a leading provider of remittance services with 226 Tahweel centres and five mobile centres – significantly enhancing the digital offering to Tahweel customers. With over a million remittances per month and having won a number of awards for this sector during the year under review (refer Value Drivers on page 12, Retail Banking on page 53 and Treasury on page 59) the Bank’s digital offering contributed towards protecting its market share in the remittance business.

The Bank’s digital offering during the COVID-19 pandemic was designed to ensure that stakeholder groups such as employees and customers were facilitated without significant disruption. Such efforts complement measures taken by the Bank to ensure the safety of stakeholders, including members of the community, and to align with government initiatives to control the spread of the virus. During the year under review, the Bank arranged for end-to-end online application for car insurance and for current account opening for under-fifteens among a number of other firsts-to-market in digital banking (refer Digital Footprint and Technology Transformation on page 83). The Bank also recorded 7.9 Mn. active digital users, a digital to manual ratio of 83:17, which as a result contributed to the growth in the overall bank fee income.

Information security and cyber crime are two of the Bank’s top risks with a number of actions being taken during the year under review to mitigate the same. For example, the Bank successfully complied with a number of regulatory requirements and international best practices including SAMA Cyber Security Framework Level 3, the National Cybersecurity Authority standards, the Payments Card Industry – Data Security Standard (PCI-DSS) and the ISO 27001 Security standard.

In addition the Bank ensures that Cyber Security Assessments are periodically conducted including vulnerability assessment and penetration testing.

The Bank’s Security Operations Centre (SOC) is home to an information security team responsible for monitoring and analysing the Bank’s security position on an ongoing basis. Their aim is to detect, analyse, and respond to cybersecurity incidents using a combination of technology solutions and robust processes. Consisting of security analysts and engineers as well as managers who oversee security operations employees in the SOC work closely with the Bank’s incident response teams to ensure security issues are addressed swiftly.

The Bank also employs advanced security controls and solutions, including centralised identity management, to ensure effective protection of infrastructure and customer information. Information security infrastructure and technologies were also successfully migrated to the new data centre during the year.

Through its focus on being a digital leader in the banking sphere, the Bank contributes towards SDG 9 – Industry, Innovation and Infrastructure by opening new and innovative avenues for customers to access and move funds, transact and conduct business.

Financial inclusion

The Bank offers a range of products and services that provide social and economic benefits to consumers – particularly those in underserved and disadvantaged segments. The Bank's digital leadership is also opening doors for this segment to better access the banking and financial services system. The Bank’s Micro, Small and Medium Enterprises Committee supports SAMA requirements while the Bank continues to explore ways in which to provide entrepreneurs – particularly female entrepreneurs and young people – with greater support in expanding their businesses.

The Bank’s Retail Banking Group processes 10 Mn. financial transactions a day and serves around10 Mn. customers in total, securing financial inclusion for diverse segments within Saudi Arabia.

Being the largest retail bank in the Kingdom, the Bank offers unsecured financing to its customers with a market share of 40.6% in personal financing as of 2020, representing 51% of the total retail portfolio which stands at SAR 133 Bn. for the year under review. The Bank’s retail franchise supports the leadership in contributing towards financial inclusion in the Kingdom. A breakdown of the Bank’s Retail Banking portfolio is as follows:

The Bank’s digital banking facilities also furthered financial inclusion during the year under review, by providing customers from all walks of life easier access to funds during the pandemic-related restrictions. The Bank’s wide branch network, which extends to remote areas, is another contributor towards the financial inclusion of normally under-banked communities. In addition, the Bank’s extensive Tahweel branch network, along with its digital banking offering, proved to be a boon for low-income labour segments to access and transfer funds – ensuring that their families and communities in various parts of the globe received funds during these critical times.

Having introduced a number of innovative credit cards to the market as planned in 2020, the Bank also launched several new mortgage products, contributing towards Vision 2030 through its efforts to increase home ownership for Saudi nationals. With the Bank’s sizeable market share in mortgages, it is a significant champion of financial inclusion in Saudi Arabia. The Bank’s activities in the mortgage sector helped ensure that the Kingdom’s low-income families were able to benefit from its mortgage guarantee schemes.

Net mortgage financing for the year under review increased to SAR 104.5 Bn. from SAR 55.0 Bn. at end 2019, with 90% year-on-year growth. Market share rose to 37.1% in 2020 up from 32.3% in 2019.

Expanding existing physical customer touch points, the Bank optimised its branch network to serve all customer segments. New ATMs, including in new and renovated branches, were added to the Bank’s total network of 5,211. The Bank was also the first in the Kingdom to launch an ATM that served the needs of differently-abled customers including those who are deaf, or visually or physically challenged (refer Retail Banking on page 53).

The Bank is an active participant in the Kafalah Program. With small and medium-sized enterprises (SMEs) generally unable to provide the sufficient guarantees required by banks to get the funding they desire, the Kafalah Program was established with the support of the Ministry of Finance and banks operating in the Kingdom of Saudi Arabia. The programme guarantees banks a proportion of the funding granted to the SMEs allowing the Bank to provide funding following an economic feasibility study. Supporting the SME segment during the pandemic, the Bank waived a number of fees for customers between April and October 2020 in line with SAMA’s mandate (refer SME Business on page 61).

The Bank’s work in this area contributes towards SDGs 5 and 10: Gender Equality and Reduced Inequalities respectively as it strives to promote economic inclusion without prejudice.

Community projects and sponsorships

One of the Five Pillars of Islam, Zakat, obliges individuals and businesses who earn above a certain threshold to donate a portion of wealth each year to charitable causes. As Zakat is calculated based on income and value of possessions, a Bank such as Al Rajhi Bank contributes a significant amount towards the betterment of the communities within which it operates. Compared to its peers, Al Rajhi Bank makes one of the largest Zakat payments in the banking sector annually.

Restrictions relating to COVID-19 negatively impacted the plans of the Bank’s CSR department but despite such a stumbling block a number of initiatives were implemented.

Sponsorships covering the year under review include those for the inauguration of a physical and function therapy centre at Turaif Hospital, a Health Endowment Fund by the Ministry of Health towards mitigating the impact of COVID-19, the WatanAlataa initiative and the Community Fund by the Ministry of Human Resources aimed at alleviating the impact of COVID-19 on the poor, the Gulf Campaign for Cancer, the Mawadah Association for divorced ladies, and programmes supporting the Disabled Children’s Association.

The Bank also distributed 2,000 food baskets to the needy across the Kingdom during the month of Ramadan and a further 2,000 winter gifts to the poor.

In addition, a total of 1,395 employees participated in the Jood Employees initiative by the Ministry of Housing which contributes towards home-ownership for the financially disadvantaged within the Kingdom.

Through ARB Academy (refer Human Resources on page 76), the Bank provides opportunities for employees to improve their skills and career prospects. The Bank's graduate development programme, which was begun in 2015, now consists of seven batches as well as two female-only batches and two Information Technology batches with a total number of 82 graduates having qualified by the end of 2020. The Bank’s efforts in this arena create skilled professionals within the communities within which it operates, in turn improving prospects and the employability of Saudi nationals in line with Vision 2030.

The work it does in the community aids the Bank to contribute towards Sustainable Development Goals 1, 2 and 3 – No Poverty, Zero Hunger and Good Health and Well-being respectively.

Employee volunteering

The Bank organises and contributes towards a range of investments to benefit the communities within which it operates. In addition to sponsorships of various projects and programmes, the Bank is also supported in these endeavours by the volunteerism of its employees. While the Bank's annual Social Responsibility Plan is approved by the Head of Corporate Communications, Chief of Marketing and the CEO, effectiveness of the various community investments are constantly evaluated, including through feedback received from customers, employees and community organisations, as well as media coverage.

Employee volunteering hours reached the Bank’s target 50,000 mark for 2016-2020 with a total of 2,625 employees participating in the year 2020 from across 29 cites. Employee volunteer hours for the year under review stood at 13,125 which is a significant achievement considering the restrictions imposed as a result of the pandemic. Despite the problems they faced, employees were ready to contribute their time and effort to support the communities within which the Bank operates.

To channel employee enthusiasm for volunteering, the Bank’s coordinators in various regions across the Kingdom follow up on approved projects, with announcements and timely reminders sent to all employees. With a range of projects to choose from and half a day allowed off for volunteering, the Bank ensures that employees remain supported in such community-support endeavours.

The work employees perform in the community helps the Bank to contribute towards Sustainable Development Goals 1, 2 and 3 – No Poverty, Zero Hunger and Good Health and Well-being respectively.

Responsible employer

The Bank strives to nurture an engaged workforce using a range of initiatives such as recognition awards, promotions, and volunteering opportunities that allow them to make a difference in the community. A number of strategic employee policies are in place to safeguard employee health, safety and well-being with special steps taken during the year to keep its people safe from contracting the coronavirus. The Bank also promotes a culture of open communication with all employees to assess engagement levels and identify areas that require further attention. In addition the Bank introduced reduced working hours during the pandemic-related lockdown period with employees provided with the necessary equipment and guidance to transition seamlessly to working from home, ensuring not just business continuity but also the safety of the Bank’s people (refer Human resources on page 70).

Meanwhile, the Bank's employee engagement index is at its highest level (refer Human Resources on page 71).

With one of the largest workforces of any bank in the Kingdom, the Bank has an Employee Engagement Index of 70% – a 4% increase over the previous employee survey. This reflects the Bank's strong commitment to maintaining recognised standards and principles for labour practices, employee wellbeing and occupational health and safety. While providing avenues for employees to improve their skills and experience levels and progress further in their careers, the Bank is also committed to gender diversity. The largest proportion of female employees within the Bank belongs to the 18-30 years age group, but the Bank is making an effort to recruit more women in other age groups and especially in higher grades.

The Bank strives to conduct recruitment, leadership and talent development and remuneration equitably across its business lines and service units (refer Human Resources on page 72). By continuing to provide job opportunities throughout the pandemic year the Bank had a positive impact on the overall Saudi economy and contributed towards GDP growth.

A key priority for the Bank remains its employee policies – such as its Whistle-blowing Policy – and its employee communications (refer Human Resources on page 71) which, together, create and sustain an open and enabling culture within the Bank – helping it to deliver on its commitment to build a world-class compliance framework.

As a responsible employer, the Bank contributes towards SDG 3, 5, 8, and 10: Good Health and Well-being, Gender Equality, Decent Work and Economic Growth, and Reduced Inequalities respectively as it strives to create an equitable environment for all its people.

Responsible procurement

The Bank continued to create strong partnerships with many local and international organisations, from procurement of world class technologies, to strengthening system capabilities and enhancing knowledge sharing in various disciplines. Through its collaborative relationships, the Bank continued to create private and public partnerships in matters of national importance, leading the way as a responsible corporate citizen.

Supporting local suppliers remains a priority with more than 93% of procurement spend going towards Saudi businesses. The Bank is also committed to supplier diversity, including female-owned enterprises and SMEs and ensuring supply chain due diligence. Its Business Operations and Support department manages all suppliers and service providers for the Bank in terms of contracts, purchase orders and invoices.

By partnering with suppliers and influencing them through the Bank’s robust procurement frameworks and policies, the Bank contributes towards SDGs 8 and 10: Decent Work and Economic Growth and Reduced Inequalities.

Corporate governance

Integrity and transparency are core values at the Bank, with employees at every level dedicated to being open and honest while maintaining the highest standards of corporate and personal ethics. Committed to promoting high standards with sound policies and procedures in place, the Bank’s Corporate Governance Framework is based on five Board committees and supported by Level 1 and Level 2 Management Committees. This structure is underpinned by a series of governance enablers that are vital to ensuring that prudent and effective controls remain in place.

The Bank launched a three-year strategy for business continuity and formed the Business Continuity and Crisis Management Committee. During the year under review the Committee led the Crisis Command Centre which in turn supported the Bank's top management in critical business decisions. The Bank was awarded ISO22301:2019 certification for its Business Continuity Management System confirming that the management system is in conformity with the audit criteria.

To ensure compliance with the local, international standards and regulations related to business continuity, Al Rajhi Bank has a Business Community Management Committee chaired by the CEO and consists of all general managers. During the year 2020, the committee had nine meetings in total with five meetings held by the main committee and four held by a sub-committee – the DRLTSC (Disaster Recovery Live Testing Steering Committee) – to oversee all technology testing related subjects. Additionally, in line with the approved BCM program, eight tests were conducted successfully in 2020 to validate the overall readiness and stability of the Bank’s technology. Two of these tested the operation of critical functions from alternative workspaces during business hours while six others checked the network and critical business applications and services such as ATMs, internet banking, mobile banking, Treasury systems and Retail backend systems.

During the year under review the Business Continuity and Crisis Management Committee:

  • Led the Crisis Command Centre in support of top management providing daily updates and recommendations resulting in more than 120 actions during the COVID-19 crisis
  • Prepared and arranged the distribution of curfew passes during the lockdown period for key employees
  • Enabled the smooth operation of the working from home strategy for the majority of Bank employees by providing an adequate number of laptops and VPN enablement with full support from Information Technology and Information Security departments

The Bank assesses its customers’ AML risk during the on-boarding phase as well as periodically, in line with regulatory requirements and industry best practices. Its customer due diligence programme incorporates principles relating to Know Your Customer (“KYC”), customer identification and verification, and identification of ‘Beneficial Owners’. The Bank performs enhanced due diligence (“EDD”) procedures on customers assessed as higher risk, including politically exposed persons, and closely monitors customer transactions on a continuous basis for suspicious activity.

All employees, including senior management as well as the Board of Directors, receive AML/CTF training. Over the last few years, the Bank has expended considerable effort to deliver employee training and awareness programmes relating to these areas with an average of 31% of all training delivered being AML or compliance related.

In line with the regulatory requirements, effective October 2020, the Bank’s Anti-Fraud function merged with its Financial Crimes Group. The Bank developed an effective Anti-Fraud Policy and an Anti-Fraud Framework, which covers all Bank functions, processes and products. The policy articulates the key requirements for ensuring financial fraud threats are effectively identified, assessed and mitigated.

Every reported incident of fraud is investigated and highlighted to senior management, with detailed information on the root causes, operational lapses and fraud trends. The Bank is making major investments in fraud monitoring systems with machine learning capabilities.

While the Bank must remain profitable in order to sustain its performance as a going concern, it acknowledges that immediate shareholder returns must be balanced against wider responsibilities to society and the environment. Such a balancing act requires the Bank to compare trade-offs and tensions in the investment and expenditures of its various capitals.

By emphasising the short, medium and long term (refer Value Creation Model on page 24), the Bank underlines its understanding that the relationships with its stakeholders are symbiotic. From a sustainability point of view, ensuring productive outcomes for society and the environment is completely consistent with the interests of the shareholders in the long term. For this reason, the Bank’s sustainability strategy is thoroughly integrated with its core business activities and inculcated to the ethos of its people.

The year 2020 saw the conclusion of the Bank’s ABCDE – Back to Basics strategy (2016-2020), with the Bank finalising its new “BOTF – Bank of the Future Strategy” (2021-2023) during the year under review. While the Bank was able to rise to meet the challenges of 2020 thanks to the Back to the Basics strategy, the new strategy focuses on advancing capabilities through four new pillars – Building the core, Outperforming the market, Transforming technology, and Fulfilling more customer needs (refer Strategic Direction on page 40).

The Bank also has a robust corporate governance system in place which is designed to ensure the following:

  • Roles and responsibilities are distributed among the Board, Management and Committees
  • Clear reporting lines as well as frequency of reporting are established
  • Legitimate needs, interests and expectations of all stakeholders are taken into consideration
  • The highest degree of fairness, transparency and accountability is upheld
  • Value is created sustainably for all stakeholders over the short, medium and long term
  • Negative impact on society and environment is minimised
  • Focus given to making the Bank more stable, resilient and future ready
  • Employees live by corporate values

With its 30-year commitment to providing Sharia-compliant banking services, the Bank remains focused on good governance, contributing to SDGs 8 and 16: Decent Work and Economic Growth; and Peace, Justice and Strong Institutions respectively.

Managing risk

The Bank's activities expose it to a variety of financial risks and those activities involve the analysis, evaluation, acceptance and management of some degree of risk or combination of risks. Taking risks is core to the banking business, and these risks are an inevitable consequence of participating in financial markets. The Bank's aim is, therefore, to achieve an appropriate balance between risk and return and minimise potentially adverse effects on the Bank’s financial performance.

The Bank's risk management policies, procedures and systems are designed to identify and analyse these risks and to set appropriate risk mitigation measures and controls. The Bank reviews its risk management policies and systems on an ongoing basis to reflect changes in markets, products and emerging best practices.

Risk management is performed by the Credit and Risk Management Group (“CRMG”) under policies approved by the Board of Directors. The CRMG identifies and evaluates financial risks in close co-operation with the Bank’s operating units.

In addition, the Bank continues to follow global best practices in managing risk along with complying with the guidelines of the Saudi Central Bank, as the regulator of financial institutions in the Kingdom, and the standards and principles of Basel II and Financial Stability Board.

Moreover, emerging global developments such as the entry of FinTech companies into the banking arena are now threatening to disrupt conventional business models. To mitigate risks such as data and cyber security breaches and many others (refer Materiality on page 37), the Bank has established a sound risk management framework with necessary oversight of the Board of Directors (refer Risk Management on page 135).

The security team within the Bank’s Security Operations Centre (SOC) monitors and analyses the Bank’s security position on an ongoing basis. Consisting of security analysts and engineers, they respond to cybersecurity incidents using a combination of technology solutions and robust processes (refer Digital Footprint and Technology Transformation on page 83). There were no official fines imposed by the CMA during the year under review
(refer Governance on page 112).

By actively ensuring a robust risk management framework the Bank contributes towards SDGs 8 and 16: Decent Work and Economic Growth; and Peace, Justice and Strong Institutions respectively.

World-class compliance framework

Compliance and financial crime risks have become some of the most significant ongoing concerns for financial institutions in the Kingdom of Saudi Arabia, where regulatory scrutiny and penalties have dramatically increased since 2016 and the scope of regulatory focus continues to expand.

In recognition of the Bank’s investments in its compliance framework over the past six years or more, the Bank received ISO/DIS 37301:2020 certification issued by the Global Quality Network (GQNET) in the United Kingdom for the design and implementation of a responsive and effective compliance management system. Meanwhile, the Bank’s Internal Audit Group received the highest classification for General Conformance issued by the Institute of Internal Auditors.

As the third line of defence behind the Risk and Compliance departments (which form the second line of defence) and the internal controls set in place by the Executive Management (the first line of defence), the Internal Audit department provides reasonable assurance on the efficiency and effectiveness of other control functions.

The Internal Audit Group’s objectives include providing the Board of Directors with reasonable, objective and independent assurance on the efficiency and effectiveness of internal control systems, risk management, and the Bank’s governance. Subjects covered by this department include:

  • The integrity and accuracy of information
  • Regulatory reporting
  • Level of compliance with policies
  • Regulatory requirements
  • Assets safeguarding measures
  • Best utilisation of resources to achieve the Bank’s operating and strategic objectives

One of the major developments for the Internal Audit Group during 2020 was the recently approved restructure of the department, with the recruitment of more staff with complementary skills planned for the near future. Additional training courses will be implemented for existing employees to ensure they remain well able to handle the challenges of the times.

Continuous ESG focus

Highlighting the Bank’s commitment to environmental, social and governance (ESG) practices are a number of initiatives and programmes that have been put in place to deliver on the Bank’s ESG ambitions. These programmes are underpinned by the strong foundation of the Bank’s core values and standards, which provide a platform from which to achieve current-to long-term ESG goals.

The Bank’s ESG focus has resulted in a number of initiatives that are discussed elsewhere in this report. For instance, the Bank’s first-of-its-kind ATM, which serves a range of differently-abled people including those who are visually impaired, hearing impaired and mobility-challenged. The Bank also provides a differentiated customer value proposition for credit cards focusing on youth, SMEs, corporate entities, and the non-salaried segment (refer Retail Banking on page 53).

ESG Performance Tables


Sustainable finance

Total loans to companies in the following sectors 2020
(SAR '000)
(SAR '000)
table-responsive table-responsive(SAR '000)
(SAR '000)
(SAR '000)
Manufacturing 12,462,929 13,922,372 16,037,315 15,973,600 16,212,769
Utilities and Energy 13,440,883 11,656,463 10,340,081 8,444,947 6,029,572
Retail Trade 5,305,329 5,071,427 6,530,785 6,045,044 3,887,218
Wholesale Trade 6,687,797 7,933,755 5,992,123 6,460,980 5,683,083
Real Estate 8,791,550 6,656,589 6,213,064 4,755,116 3,534,314
Investment Group 2,711,053 2,170,976 3,618,177 6,138,897 8,876,239
Construction 1,393,025 2,031,147 3,108,889 4,826,861 3,062,647
Telecom and IT 1,123,361 1,994,905 2,927,003 3,198,540 4,036,218
Others 7,832,485 5,748,391 884,418 241,500 1,562,273
Mining, Quarrying, and Oil and Gas Extraction 1,929,066 1,196,943 1,624,693 1,236,055 1,227,809
Agriculture, Forestry, Fishing and Hunting 538,339 340,974 419,588 1,493,753 666,714
Other Services (except Public Administration) 212,818 75,115 1,153,956 939,460 1,188,984
Transportation and Warehousing 1,500,949 883,026 827,438 923,181 811,054
Administrative and Support and Waste Management and Remediation Services 391,842 213,595 374,930 929,062 310,717
Food Services 522,677 569,350 592,319 654,222 753,982
Educational Services 197,111 252,926 286,093 344,850 207,244
Accommodation 260,741 242,497 213,401 302,943 129,089
Healthcare and Social Assistance 306,077 302,347 642,271 218,997 238,610
Public Administration 156,890 175,593 204,618 86,880 93,707
Professional, Scientific and Technical Services 35,244 17,489 3,264 3,399
Arts, Entertainment and Recreation 3,604 3,550 10 10


Workforce overview

Workforce analysis – refer page 69.


Hours of training by grade – refer page 76.
Employee training – refer page 75.
Employee training by gender and category – refer page 77.
Hours of training by skill type – refer page 77.

Employee diversity

Employees by age and gender – refer page 74.
Service analysis of workforce – refer page 75.
Employees by category – refer page 75.

New hires

Total new hires by age and gender – refer page 73.

Employee Engagement and Wellbeing

Parental leave by gender – refer page 70.
Salaries and benefits – refer page 72.
Celebratory payments – refer page 72.

Community investment

2020 2019 2018 2017 2016
Total number of employee volunteering 2,625 3,191 2,904 1,634 600
Total number of employee volunteering hours 13,125 16,265 14,115 5,735 1,650

Supply chain

2020 2019 2018 2017
Total number of suppliers engaged 335 332 358 432
Total procurement spending (SAR Bn.) 3.134 3.149 2.451 3.042
Total number of local suppliers engaged 263 261 300 344
Procurement spending on local suppliers (SAR Bn.) 2.913 2.889 2.282 2.866
Percentage of spending on local suppliers (%) 93 92 93 94
Total number of women-owned suppliers engaged 94 94 30 27


2020 compliance-related highlights 2021 compliance-related priorities
The Bank received ISO/DIS 37301:2020 certification issued by the Global Quality Network (GQNET) in the United Kingdom for the design and implementation of a responsive and effective compliance management system Implement Customer 360 Financial Crimes Intelligence solution, which will interface with key compliance and fraud solutions to provide an integrated view of customer risk
The employee headcount for the Compliance group increased to 202 (up from 61 in 2014), enabling compliance training and awareness campaigns to be enhanced and expanded across the Bank, including to the Bank’s Board, Executives and Staff on compliance and financial crimes subjects Upgrade the Fraud Management system and build additional scenarios to identify potential fraud risks
Proactive measures taken to identify emerging money laundering and terrorist financing threats and vulnerabilities arising from the COVID-19 crisis, with the Financial Action Task Force (FATF) guided by the annual AML-CTF risk assessment Implement scenarios to detect potential bribery and corruption crimes
As part of the Bank’s aggressive “Digital” strategy a dedicated “Digital Compliance” unit was set up to provide advice on regulatory matters impacting the digital agenda Expand automation of regulatory reporting processes and big-data analytical capabilities
AML Transaction Monitoring System enhanced with new scenarios to detect suspicious activities and improvements made to the Robotics Process Automation solution to improve the efficiency of the alert investigation and suspicious activities reporting processes Invest in “Digital Compliance” unit capabilities to advise the bank during the faced-paced growth of the Bank’s digital products and services
Continued investments in the Sanctions, Anti-Bribery, Whistle-blowing and Corruption programmes and framework Continue to invest in Robotics Process Automation, Artificial Intelligence and Machine Learning solutions for improved efficiency and effectiveness of compliance systems
Major investments to automation of the regulatory reporting processes
Following the merger of the Anti-Fraud function with Financial Crimes Compliance group, the introduction of a robust fraud risk management strategy and framework to “shift-the-curve” to an “established” state of maturity
Continued supporting the Kingdom in its efforts to crackdown on bribery and corruption and matters involving national security
As part of the Saudi Vision 2030, the Bank was selected to participate with SAMA on an ambitious automated enforcement programme – the “SAMA Tanfeeth” Project – with further enhancements made to the Tanfeeth portal for executing synchronous enforcement actions

GRI Index

This report has been prepared in accordance with the GRI Standards: Core option (refer GRI Content Index on page 228).

GRI 102-9, 203-1, 204-1, 302-4, 303-3, 305-5