The year 2023 saw Jordan prudently navigating challenging times, with its economic growth increasing up to 2.6% on the back of a surge in foreign direct investments to the Hashemite Kingdom. The country’s banking sector continued to reflect resilience despite the challenges, a cautiously promising backdrop for Al Rajhi Bank – Jordan (ARBJ) to record a profitable performance that saw a YoY increase of 8% in shareholder equity.

The reporting period brought about its own set of challenges, with the adoption of contractionary monetary policies impacting the global banking industry, including Jordan. While such policies were introduced to reduce the rate of monetary expansion in order to fight inflation, it also elevated cost of funding to unprecedented levels, leading to fierce competition between local banks across Jordan to preserve their deposit base. ARBJ saw a 101% YoY increase in its Cost of Funds in 2023 as a result.

While customer appetite for borrowing also reduced due to this development, ARBJ recorded a 12% increase in financing value during the year. This was achieved by adopting tactical campaigns targeting existing high-quality loans offered by other financial institutions, offering fixed rates spread across longer loan durations. This strategy compensated for diminishing spreads and resulted in higher volumes.

Synergistic product and service offerings

The overseas branch leveraged Group synergies during the reporting period to introduce new product and service offerings to the Jordan Market; ARBJ collaborated with Neoleap – the Group’s fintech subsidiary – to launch Al Rajhi’s digital wallet urpay to the Jordanian Market in the third quarter of 2023. The adapted version named urpayJO offers services such as instant payments and transfers, bill payments, virtual card issuance among other features. It was well received by the evolving consumer market, racking up over 6,000 user registrations by the end of the year. ARBJ kicked off its Merchant Acquiring Service on schedule in 2023 with yet another Neoleap product – neoPOS – providing seamless in-store and online payment acceptance solutions to local merchants. The number of merchants is expected to reach 400, and POS terminals may exceed 500 by the end of 2023.

While ARBJ continued to leverage the growing network of Financial Institutions (FI) of Al Rajhi Bank KSA to facilitate international transactions for ARBJ customers, the overseas branch also introduced BUNA (Arab Regional Payment System), a centralised cross-border and multi-currency payment system supported by Central Banks and FIs across the Arab region and beyond. Now, with the BUNA platform, ARBJ customers are able to send and receive payments in Jordanian Dinars as well as key international currencies in a safe, cost-effective, risk-controlled and transparent environment.

Furthermore, the branch launched a commercial real estate leasing product towards the end of 2023, to assist corporate clients to capitalise on long-term investment opportunities in a fluctuating real estate market.

Targeting identified customer demographics

In order to increase engagement with customers, and to reach and penetrate untapped markets, the Jordan branch launched a buyout campaign across its official social media channels, which were verified and activated during the previous reporting season. The buyout campaign was highly successful, reaching 1.2 million social media users and recording 8 million impressions. These numbers resulted in over 28,000 leads, of which 2,498 were successfully converted to customers with a lead conversion rate of 8.9%.

The targeted digital marketing approach proved to be highly cost-effective, costing 77% less than previous campaigns for the overseas branch. ARBJ’s presence and engagement on digital channels also led to a 40% increase in social media followers on Facebook, and 112% increase on LinkedIn, which also highlights the growing reputation of the overseas branch as an employer of choice. Customers were also encouraged to leverage ARBJ’s remote banking services, with 55% of its total customer base registered for internet and/or mobile banking.

During the period in review, ARBJ also continued to focus on attracting high-profile/affluent customers with strategically targeted campaigns. Having significantly expanded its small and medium enterprises (SME) portfolio during the previous year, ARBJ’s SME team also continued with targeted campaigns to reach new clients.

Nurturing a capable and responsible team

In terms of building its human capital, ARBJ successfully completed the Level-Up Campaign, which was initiated in 2022 to enhance and fast-track employee development and capacity building through tailored internal and external training programmes. The branch complemented these efforts by building a strong talent pool by training 27 fresh graduates through its Graduate Development Programme (GDP) in 2023, with 24 of the programme participants employed by year end.

The overseas branch also focused on nurturing a volunteer culture during the reporting period, promoting a sense of altruism and duty among its employees by initiating a number of causes and projects, ranging from environmental conservation to sponsorships and donations. More details on these initiatives are listed in the ESG Report on pages 146 to 165.

A future-ready brand identity

The overseas branch continued to make significant progress in its rebranding efforts in 2023; three physical locations were completely rebranded during the year, with the fourth office relocating to a new property following the installation of new branding. A total of 20 ATMs across the Kingdom – both existing and new – were also rebranded. The rebranding of ARBJ’s mobile banking app was also completed in 2023. The reporting period concluded with the overseas branch’s head office successfully relocating to its new headquarters in Amman.