With great pleasure, we unveil the Annual Report for 2023 to our esteemed customers, partners, and shareholders, showcasing Al Rajhi Bank’s significant contributions to propelling the Kingdom's visionary economic development plans.

Despite facing significant economic headwinds including decelerating growth, instability due to supply chain disruptions, and global unease, the Kingdom of Saudi Arabia maintained its top-tier ranking within the G20 nations in 2023. This impressive feat of economic resilience and investment attraction can be attributed to the visionary leadership and astute economic strategies implemented by the Kingdom. Furthermore, the Kingdom has pioneered the diversification of its revenue streams beyond oil, achieving an impressive 8.9% growth in non-oil revenues in 2023. With a thriving tourism sector, anticipated to soon realign the global tourism landscape towards the Kingdom, Saudi Arabia is poised to rightfully secure its well-deserved position on the world tourism stage. These achievements align seamlessly with the transformative journey marked by mega infrastructure and logistics projects, positioning the Kingdom rightfully as the exemplary host for Expo 2030.

With great pleasure, we unveil the Annual Report for 2023 to our esteemed customers, partners, and shareholders, showcasing Al Rajhi Bank's significant contributions to propelling the Kingdom's visionary economic development plans. Our commitment to this cause is evident through the delivery of extensive banking services, financial solutions, and sustainable financing. Driven by our “Bank of the Future” strategy, we are solidifying our position as a retail banking powerhouse, while pioneering digital leadership in the market. We are seamlessly transitioning from manual to digital transactions, empowering customers with a superior experience through innovative solutions. The Report presents an analysis of the Bank’s performance including our overseas operations and subsidiaries and highlights the Bank’s commitment to progress by unveiling its ambitious future plans, all testament to the Bank’s legacy as a vital pillar of the national economy.

In its position as a leading financial institution; committed to serving global markets with innovative Shariah-compliant banking products and services, Al Rajhi Bank successfully launched its first US dollar-denominated sustainable sukuk in March 2023. This USD 1 Bn. (SAR 3.75 Bn.) sukuk, offering a competitive annual profit rate of 4.75%, marks the Bank’s ground- breaking foray into the international capital markets; following two successful domestic issuances in Saudi Riyals during 2022. This achievement of being the first financial institution to issue Sukuk in international capital markets also reflects investors' trust in Al Rajhi Bank, and its steadfast dedication to sustainable financing.

With such milestone achievements and indicators reflecting the clarity of vision, sound direction, and strong performance throughout 2023, Al Rajhi Bank recorded an SAR 16.6 Bn. net income after zakat. In addition, the Bank’s assets increased by 6.1% compared to 2022, reaching SAR 808 Bn. Building on its momentum, Al Rajhi Bank’s shareholders’ equity excluding the Tier 1 sukuk, surged by 7.9% to reach SAR 90 Bn. by the end of 2023, driving a 20.7% expansion in the corporate financing portfolio. Reflecting the Bank’s commitment to bolstering economic activity, this robust growth extended to the real estate sector, with a 5.6% increase in the real estate financing portfolio. This was further strengthened by the Bank’s dedication to improving citizens’ homeownership rates, as evidenced by the signing of an agreement with the Real Estate Development Fund to finance the updated housing support program packages.

In addition, the Bank underscored its commitment to the tourism sector by establishing a strategic partnership with the Tourism Development Fund. This initiative provides unique banking products, integrated solutions, and fosters support for investors, playing a pivotal role in supporting tourism projects and cultivating promising tourist destinations. This partnership seamlessly aligns with the Bank’s overarching strategy to contribute to the Kingdom’s Vision 2030 objective of diversifying the national economy and increasing non-oil GDP share.

We doubled down on our commitment to empower micro, small, and medium (MSME) business owners in their crucial role in fuelling job creation, economic services, and trade facilitation. We are proud to be their trusted partner, offering them tailored solutions through our dedicated unit and user-friendly online banking portal. Understanding their aspirations and challenges, we provide comprehensive service packages that empower them for both current and future growth, promoting a culture of entrepreneurship across the Kingdom. This dedication has translated into a remarkable 22.8% growth in our SME financing portfolio, a testament to our success in supporting their ambitions. As we move forward, we remain committed to empowering SMEs and driving their continued success, together.

The Report also showcases Al Rajhi Bank’s dedication to community service, highlighting its unwavering commitment to social responsibility. This commitment manifests in active engagement with local charitable campaigns, particularly through the “Ehsan” platform where it stands as a prominent supporter. Al Rajhi Bank further collaborates with the Ministry of Human Resources and Social Development in the “Orphan Care Educational Program”, currently in its second year. This program trains and empowers new cohorts for continued studies at private universities across the Kingdom. The Bank’s dedication extends to local healthcare, actively supporting the Health Endowment Fund and initiatives like funding kidney transplants, establishing diabetes centres, and participating in diverse healthcare programs. Notably, Al Rajhi Bank played a pivotal role as financial director in the Jood Eskan charitable IPO, where both the Bank and its clients contributed a substantial SAR 100 Mn. for housing welfare.

Recognising the pivotal role of the human element in implementing present and future plans, strategies, and objectives, investing in the development and progression of our team remains a top priority. Through advanced training initiatives, we are committed to equipping our national workforce and future leaders for success and excellence in banking and financial services. This is achieved through the Al Rajhi Bank Academy, as well as other collaborations with international universities.
As a testament to our efforts, we have successfully achieved a Saudization rate of over 88%, encompassing a workforce of more than 20,000 male and female employees. Al Rajhi Bank champions diversity in the workplace by both attracting ambitious and exceptional talent from all backgrounds and actively supporting female professionals who excel across various sectors, and hold senior management positions.

In direct recognition of Al Rajhi Bank’s outstanding performance, achievements, and its innovative range of services, the Bank has clinched three prestigious awards at the Saudi Trade Finance Summit; namely the “KSA Best Trade Islamic Finance Bank”, “KSA Customers Choice Trade Finance Bank”, and “KSA Best Trade Digitized Bank” awards. Furthermore, the Bank has been honoured with the National Excellence Award in localisation initiatives at the private sector level. This recognition is complemented by additional detailed awards, all of which are highlighted in this Report.

Looking ahead, we are dedicated to maximising the use of our capabilities, expertise, and the creativity of our team to address the forthcoming challenges in Islamic banking. We are committed to harnessing the potential of new technologies and artificial intelligence, all while intensifying our efforts to contribute to environmental conservation and tackle the impacts of global warming and climate change, in alignment with the “Saudi Green” initiative.

In conclusion, all of us at Al Rajhi Bank are deeply honoured to express our utmost thanks, gratitude, and appreciation to the leaders of our blessed journey, the Custodian of the Two Holy Mosques and His Royal Highness the Crown Prince -may Allah protect them- for their steadfast guidance and wise leadership, steering our country towards boundless horizons of progress and prosperity. We also extend our heartfelt thanks and appreciation to the Ministry of Finance, the Ministry of Commerce, the Saudi Central Bank, the Capital Market Authority, and all government entities. Additionally, we express our sincere gratitude to our esteemed shareholders, clients and partners. We extend our gratitude to the Chairman and members of the Shariah Council, and I also wish to express my appreciation to my esteemed colleagues, the members of the Board of Directors. Our heartfelt thanks go to our dedicated team that is propelling this respected financial institution towards new heights of success in serving the national economy and fortifying its preeminent position in Islamic banking services.

May Allah grant success,

 

Abdullah bin Sulaiman Al Rajhi
Chairman of the Board of Directors