al rajhi bank – Jordan

Driven by IMF-backed structural reforms, the reporting period saw Jordan’s economy record faster-than-anticipated post-COVID-19 recovery in a climate of global volatility, and Al Rajhi Bank – Jordan (ARBJ) ended the year on a corresponding note of growth and success.

With the Central Bank of Jordan (CBJ) increasing interest rates among other existing mandates to tackle rising inflationary pressures, the appetite for financing products in Jordan decreased significantly in 2022, a challenge overcome by ARBJ by exploring new avenues of income, expanding existing portfolios and targeting untapped demographics with tailored banking products and financial solutions.

Customer deposits at ARBJ grew by 10% in 2022, and the international branch utilised idle local-currency funds by growing its Sukuk portfolio by 80% in a concerted effort to diversify revenue streams. The reporting period most significantly saw a 36% expansion of its mid-corporate and small and medium enterprises (SME) portfolio, following the launch of a targeted Small Business Financing (SBF) programme.

Results of ARBJ organic growth on both sides of the balance sheet

Results of ARBJ organic growth on both sides of the balance sheet

An expanding product and solutions portfolio

In 2022, in collaboration with Al Rajhi Bank Saudi Arabia, ARBJ launched a customised home-financing programme for Jordanian expatriates in KSA. An expatriate mortgage financing product was also launched in 2022 to serve the interests of Jordan’s own growing expat community, who also make up the high-salaried demographic strategically targeted by ARBJ.

A corporate real estate leasing product was also developed during the reporting period to meet the growing financial needs of corporate clients, and help them take advantage of long-term investment opportunities in a fluctuating real estate market. As of 31 December 2022, the product is ready to go live upon the launch of ARBJ’s new core banking system. Plans to launch a Merchant Acquiring Service for the local market are well underway, with it on track to be launched in the first half of 2023.

ARBJ kicked off negotiations in 2022 to introduce BUNA, a centralised cross-border and multi-currency payment system fully owned by the Arab Monetary Fund (AMF), and supported by Central Banks across the Arab region and beyond. The BUNA platform will enable ARBJ to provide customers with modern payment solutions adhering to international compliance requirements. Negotiations are also well underway with a new commodity broker, with ARBJ aiming to diversify commodity providers to its Treasury business.

Digital growth

Making headway in digital banking was an important area of focus for ARBJ in 2022, and the Jordan branch made substantial progress in its core banking system replacement project, having selected ICS Financial Systems (ICSFS), a leading regional banking software solutions provider for its Islamic core banking solution. This will be followed by the implementation of the vendor’s digital channels solution with a view to go live by 2024.

Additional functionality
enhancements initiated in 2022,
expected to launch in 2023

The international branch also continued its migration campaign to register its customers for online and mobile banking, driving the number of registered customers to 56.5% of its total customer base.

Building capabilities

During the reporting period, ARBJ’s human resources department conducted a Training of Trainers (TOT) programme for 17 staff members with a view to further strengthen and cascade internal training and development competencies. This initiative supported the launch of the Level-up Programme in 2022, that saw ARBJ successfully fast-tracking the training and employment of 13 fresh graduates from its annual Graduate Development Programme (GDP).

The international branch executed a major overhaul of front-end and back-end processes that resulted in faster and personalised response time across multiple services, greatly enhancing its customer servicing benchmarks. ARBJ also conducted specialised employee-training programmes to facilitate a better and more satisfactory customer experience, particularly with regard to Personal and Home Financing products.

In order to strengthen social relations with employees while also building pride in their work and workplace, ARBJ’s Social Committee organised a Family Day during the reporting period, where employee families were invited to spend time at the Bank for a better understanding of its operations and functionality. The event was well received with families being treated to lunch as well as a number of entertainment activities, which were thoroughly enjoyed by all participants.

Nurturing brand loyalty through customer engagement

Extended business hours on multiple interactive channels such as the call centre and social media platforms during the reporting period further increased customer engagement, retention and satisfaction. A contactless feature was introduced at ATMs and card services to enhance usability.

The international branch continued to reflect the new global brand identity of Al Rajhi Bank through its rebranding exercise, successfully completing the rebrand of its official website, and remaining on schedule for its mobile app rebranding, with the launch set for January 2023. The rebranding of ARBJ’s internet banking platform Al Mubasher also remained on track during the year. Physical rebranding of branches and ATMs is on schedule to be completed towards the end of Q1 2023, following the successful completion of its design phase during the year.

In a corresponding effort to further strengthen its brand awareness, ARBJ held an introductory pavilion at King Hussein Business Park in Amman in November 2022, to promote and create awareness of the Bank products and services among the business community. The pavilion saw a high level of engagement from employees of major local and global companies located within the complex.

ARBJ’s official Facebook page was verified during the year under review, resulting in an 80% increase in followers and passing the 100,000-follower milestone. Steps were also taken to re-establish and verify ARBJ’s Instagram account in a similar manner to increase customer engagement and loyalty.

The Al Rajhi Rewards campaign launched simultaneously ensured increased social media interaction, with the Bank offering appealing rewards and promotions to loyal customers. Your Summer with Al Rajhi was another similarly successful campaign that increased customer engagement on social media while creating awareness of the Bank’s products and services.

Unify Your Obligations was yet another successful marketing campaign executed by ARBJ during the reporting period, with the aim of attracting new customers to the Bank by purchasing their financing from other banks at competitive Murabaha rates.

Playing a stronger role in financial inclusion

During the reporting period, ARBJ participated in the Global Alliance for Financial Inclusion conference hosted by the Central Bank of Jordan – an important annual forum in the field with the participation of global regulatory institutions and other major stakeholders. Through this participation, ARBJ further strengthened its commitment towards creating and promoting financial inclusion across Jordan and its underserved demographics, and creating dialogue on international best practices on the subject.

This among other commitments and activities carried out by ARBJ won the international branch an honorary recognition by the Saudi Cultural Attaché in Jordan, in appreciation of its continuous efforts in supporting the activities of the attaché during the year 2022.

Future outlook

Future outlook

ARBJ will continue to align with the new identity of Al Rajhi Bank, with plans to relocate to a new head office in Amman in 2023, and board approval obtained for physical expansion of the branch network in multiple locations across Jordan for maximum reach. This brand alignment will be further strengthened with the new CBS being developed to be launched in Q4 of 2023.

The international branch is also laying the necessary foundation to set-up an acquiring business in 2023, with POS lending to be launched following its establishment. Customers will also benefit from new products and services in the pipeline such as a Lease-to-Own programme, as well as a targeted affluent customer offering.