retail banking group

Al Rajhi Bank retained its position as the largest retail lender in the Kingdom in 2022, with the Bank’s Retail Banking Group (RBG) dominating 43.6% of the consumer market in the face of stiff competition.

GRI 3-3

RBG maintained leading market shares of 44.3% in personal finance, 51.7% in auto finance and 42.9% in mortgage at the close of the reporting period.

While consolidating its already dominant presence in the Affluent and Private Sector segments, the Bank continued to build its Retail portfolio with a sharp focus on expanding market share, introducing competitive products and seeking additional income-generation opportunities, complemented by greater customer engagement, aggressive digital adoption and efficiency in sales channel productivity.

The results are evidenced by an exponential rise in transactions from the Bank’s digitally enabled agile delivery process, recording an increase from 295 million transactions in 2020 to 697 million transactions during the reporting period. Such improvements also contributed towards a significantly enhanced Net Promoter Score (NPS) of 75% in 2022 from 66% in 2020, demonstrating strong customer satisfaction levels.

Building a balanced real-estate portfolio

The Bank introduced a number of innovative refinancing propositions for the Kingdom’s Real Estate Development Fund (REDF) backed products in 2022, while also strategically focusing on building a sizable portfolio of Non-REDF products. These included the Buyout Home Finance product allowing customers to obtain new financing from Al Rajhi to settle mortgage loans with other banks, a Property Power Top Up product offered through Murabaha and secured against the home value, and financing against mortgage of investment property through Eirad. The Bank also focused on its Off-Plan financing programme in partnership with approved developers for REDF and non-REDF customers.

These products, each launched at highly competitive pricing and bolstered by targeted campaigns increased non-REDF sales after an era of REDF dominance in retail banking, bringing up the non-REDF contribution of RBG’s growing real-estate portfolio to around 15%, while also enabling the Kingdom’s Vision 2030 target of increasing home ownership of Saudi nationals.

Al Rajhi Bank was recognised for its unparalleled growth across the real-estate segment, winning a number of awards including the Best Real Estate Financing Bank 2022, the Best Real Estate Finance Bank in the Ready Unit Product category and the Best Real Estate Financing Bank in the Real Estate Advisor category.

Widening the private sector base

RBG took strategic measures to enhance its presence within the Private sector during the year under review, recording a 43% YoY growth in 2022 following a round of campaigns centred around key public events spread out over the calendar year. Retail Banking increased its sources of acquisition with the launch of an innovative customer onboarding process through integrations with strategic partners, and also focused on referrals from all sales channels to further build its Private sector customer base. New Relationship Managers were recruited to branches across the Kingdom to offer bespoke service to the Bank’s fast-growing number of private sector customers, which was achieved through a host of solutions across targeted segments. Retail Banking ended the year with over 5,000 approved Private sector entities, the highest in the market.

RBG maintained its market share of the Affluent segment in 2022 by launching a number of new programmes aligned with an advanced client retention strategy and a restructure of the Affluent department, with focused and improved incentive schemes tailored to meet the segment’s growing expectations.

Boosting performance through digitalisation

The impact of Al Rajhi Bank’s digital transformation journey was evidenced by the notable increase in efficiency and productivity across RBG, which resulted in a significant reduction in operational costs and labour-intensive effort. Digitally accelerated financing requests and approvals enabled the Bank to avail a number of cross-selling opportunities, and minimise chances of financial fraud and human error.

By the end of the reporting period, a majority of Retail Banking products and services were made available on the Bank’s digital channels, with all Personal Finance products fully incorporated on to the Bank’s new Loan Origination System (LOS). The shift made in digital services positively impacted customer satisfaction during the reporting period, as attested by feedback from customers across demographics.

An expanding product portfolio

2022 was also notable for new initiatives and promotions in Al Rajhi Bank’s card products. A Cashback Plus revolving credit card was launched during the year under review, offering a cashback of up to 10% on daily spending, while Al Rajhi Visa FIFA Card was launched in conjunction with the FIFA World Cup Qatar 2022. Customers were also offered the convenience of paying their SADAD bills by card in 2022, while a new Mada debit card design was rolled out in the first week of December. In addition, the Bank’s new card management system went live in 2022, with migration ongoing at the end of the reporting period.

Additionally, RBG continued to build on its Personal and Auto Finance segments through digital migration and tactical pull campaigns –
two key enablers that contributed to Al Rajhi’s consumer market dominance during the reporting period. Digital migration offered a seamless omni-channel financing experience to customers in line with Al Rajhi’s overarching Bank of the Future (BOTF) Strategy, while tactical pull campaigns allowed the Bank to retain key clientele, while engaging with and acquiring a significant portion of non-bank customers.

Promoting financial inclusion

Al Rajhi Bank continued to optimise its credit policy parameters to maintain market competitiveness, and expanded the availability of its entire product suite across digital channels to promote accessibility to financial solutions across the Kingdom, in line with its Vision 2030 objectives.

Auto Finance continued its 50:50 programme with a 50% balloon payment option at the end of a 36-month financing term, as well as the Low-Income programme and the Non-Salary Transfer (NST) for non-approved employers programme to serve disadvantaged segments. Mortgage, in its efforts to contribute, launched the aforementioned Mortgage Top-up and Buyout programmes.

Future outlook

Future outlook

In line with the Bank of the Future (BOTF) strategy, Retail Banking will continue to build its portfolio in 2023 with a focus on increasing market share; for Personal Loans, product innovation and optimised customer experience will remain key growth drivers in the coming year, while for Auto Finance, Retail Banking seeks to improve its value proposition to leverage target markets, with additional products for the Affluent segment in the pipeline.

For Mortgages, the focus will remain on further consolidating its Real Estate Business leadership position, increasing the number of non-REDF products, and concluding key partnerships with the Ministry of Housing. The Off-Plan programme will continue to be supported by exclusive partnerships and Escrow accounts in collaboration with corporate banking.

The Bank’s data-driven rapid decision-making engine will be utilised to empower sales channels, improve financing turnaround times and optimise customer experience. All auto lease and mortgage products will follow in line with personal finance, and be migrated on to the new LOS, which will rapidly accelerate operations and financing transactions with improved functionality.