The “One Customer, One Bank” philosophy fostered seamless collaboration between the Bank and its subsidiaries, driving unparalleled value and revenue. Furthermore, the Bank entered into new partnerships with leading local and international institutions to capitalise on collaborative prospects and growth opportunities across diverse sectors and markets.

Fuelled by the ambitious Vision 2030, Saudi Arabia has embarked on a transformative journey to unlock and explore the Kingdom’s vast potential through economic diversification, global engagement and enhanced quality of life. Unprecedented development across economic, social, and cultural spheres have propelled the Kingdom towards its goals with unwavering momentum. And at the heart of this evolution stands the Saudi financial and banking sector, led by Al Rajhi Bank. It is not just a financial pillar; Al Rajhi Bank is a driving force, a catalyst for progress, and an enabler of opportunities.

The year 2023 witnessed the Saudi banking sector weathering a perfect storm of challenges. On the global stage, simmering geopolitical tensions among nations and economic blocs unleashed shockwaves, disrupting global economic activity and financial stability. Soaring interest rates reached record highs, simultaneously slowing down demand for both retail and corporate financing.

Despite these conditions, Al Rajhi Bank, through ongoing support by its Board of Directors, managed to navigate through these fluctuations. The Bank continued to exhibit exceptional performance across its business verticals and enhanced its leading position at local, regional, and international levels. Al Rajhi Bank's commendable 2023 performance reflected its capacity to capitalise on diverse growth opportunities. The Bank implemented an "End-to-End Strategy" featuring product expansion, sharpened competitiveness, and increasing its share of corporate banking. The “One Customer, One Bank” philosophy fostered seamless collaboration between the Bank and its subsidiaries, driving unparalleled value and revenue. Furthermore, the Bank entered into new partnerships with leading local and international institutions to capitalise on collaborative prospects and growth opportunities across diverse sectors and markets.

Despite these conditions, Al Rajhi Bank, through ongoing support by its Board of Directors, managed to navigate through these fluctuations. The Bank continued to exhibit exceptional performance across its business verticals and enhanced its leading position at local, regional, and international levels. Al Rajhi Bank’s commendable 2023 performance reflected its capacity to capitalise on diverse growth opportunities. The Bank implemented a far-sighted strategy that drove product expansion and improved competitiveness, increasing its share in corporate banking. The “One Customer, One Bank” philosophy fostered seamless collaboration between the Bank and its subsidiaries, driving increasing value and revenue. Furthermore, the Bank entered into new partnerships with leading local and international institutions to capitalise on collaborative prospects and growth opportunities across diverse sectors and markets.

Distinguished by a long-established reputation that extends over six decades of sustained performance, Al Rajhi Bank's “unbank the bank” rebrand in 2021 was the start of a new era in banking. This rebranding reaffirmed the Bank's position as a major Saudi and global brand, shaping the future, leading the way in innovation, and introducing ground-breaking solutions that cater to present needs and future ambitions. It transcended conventional banking services into a world of limitless possibilities.

In 2023, Al Rajhi Bank remained steadfast in executing its ambitious “Bank of the Future” strategy, achieving resounding success. This encompassed a holistic approach to digital transformation, consistent investments in technological infrastructure, developing offerings, and the facilitation of access through diverse digital channels. The Bank transitioned from traditional to digital transactions, streamlining processes, embracing cutting-edge systems and technologies, and fine-tuning them to elevate operational efficiencies. As a result, it sustained growth across sectors, consistently delivering greater value to its shareholders.

Under the slogan “Instantly & Limitlessly”, Al Rajhi Bank’s new mobile applications were rolled out in 2023, introducing an evolution in the digital banking landscape. This app presents enhanced features, delivering a seamless banking experience to customers. Designed as a digital financial ecosystem, the applications swiftly facilitate innovative and agile banking and financial solutions for retail and corporate clients. As part of the Bank’s commitment to achieving the financial inclusion objectives outlined in “Saudi Vision 2030”, this new application, for the first time, grants non-Al Rajhi Bank customers the ability to access its digital services as guests.

The Bank's digital transformation efforts yielded a positive impact on the KPIs of the “Bank of the Future” strategy, recording significant progress across multiple areas of focus. A notable achievement was the sustained leadership in the Retail banking services sector across the Kingdom. The Bank also captured a larger market share and boosted profitability in both the Corporate banking and SME sectors. Moreover, a remarkable surge of 1.2 million new digital customers joined the digital banking platform in 2023. These concerted efforts continuously enhance Al Rajhi’s advanced digital capabilities, solidifying its position as a leader in the future of banking. Furthermore, Al Rajhi Bank’s digital banking services were ranked first in the market according to 2023 NPS ratings.

The Bank also leveraged promising growth opportunities in developing sectors during the year in review. Notably, the Private banking and Corporate banking sectors saw a growth rate of 12.6% and 20.2% respectively. Moreover, the SME sector experienced a substantial 22.8% expansion, while the fintech microfinance company Emkan doubled its financing portfolio, soaring to more than twice its initial value since its inception. Noeleap, the fintech payment services subsidiary experienced rapid growth, as its smart wallet “urpay” added over 1.6 million new users. These positive developments strengthened the Bank’s position in these sectors, leading to significant gains in market share and profitability.

The remarkable achievements outlined in this report solidify Al Rajhi Bank’s position as a leader within the banking and finance sector in KSA, embodying the essence of its transformative “unbank the bank” identity.

As 2023 draws to a close, the Bank continues to achieve positive outcomes across sectors. Customer deposits increased, and total asset and liabilities both grew by 6%, respectively. Moreover, digital transactions accounted for 94% of the total transactions. The Bank ranked 3rd in Corporate Financing, alongside a 5.6% increase in Mortgage financing in 2023 as part of “Sakani” initiative. The Bank also secured the highest market share in retail financing by 41.3%, increased the market share in demand deposits to 25.1%, and expanded the market share in the number of POS terminals to 35.4%.

Globally, despite the challenges posed by increased interest rates and competition with local banks, Al Rajhi Bank’s international branches have maintained positive indicators. Al Rajhi Bank – Kuwait introduced new digital features and services to enhance quality, improve customer experience, and reach a wider client base. Al Rajhi Bank – Malaysia witnessed a record-breaking performance, increasing net profits by 231%. Adding to its achievements, it was honoured with the Best Virtual Bank and Best Fintech- Retail Banking awards in 2023. Amidst the turmoil rocking Jordan’s banking sector in 2023, Al Rajhi Bank – Jordan managed to increase its financing by 12% and the shareholders’ equity by 8%, a testament to its flexible strategy in navigating market fluctuations.

In the dynamic and ever-evolving economic landscape of 2023, Al Rajhi Bank’s subsidiary companies showcased robust performances. Al Rajhi Capital maintained its dominant position as the top trader by value and market share in both Tadawul and Nomu, even with a 22% decrease in trading volumes compared to 2022. Cementing its leadership and market leadership, Al Rajhi Capital has been chosen by Tadawul to pioneer the role of market maker in the Kingdom’s main stock market. Moreover, Al Rajhi REIT Fund, operated by the Company, made the largest secondary offering in the Kingdom with a coverage rate reaching 158%. In 2023, the Company’s global outreach expanded to encompass 38 markets worldwide. Al Rajhi Capital had a crucial role in the successful issuance of sustainable Sukuk bonds valued at USD 1 Bn., marking Al Rajhi Bank’s ground- breaking issuance in the global capital markets in US dollars. These remarkable achievements led to the subsidiary being honoured with the Best Debt Capital Markets Award by the Saudi Financial Market Forum for 2023.

Since its inception, Al Rajhi Bank has stood shoulder-to-shoulder with the Kingdom, a steadfast partner contributing to the development of the nation, fostering its potential, and paving the way for a bright and prosperous future for its citizens. With Vision 2030’s halfway mark in sight, Al Rajhi Bank doubles down on its commitment, poised to play a pivotal role in driving progress and realising the Kingdom’s ambitious goals. Al Rajhi Bank is positioned as one of the most substantial national economic entities, the strongest banking brand, and the holder of the largest market share in personal and real estate financing. Coupled with its extensive base of employees, customers, and shareholders, the Bank’s influence on the nation's economic landscape is profound. In this context, the Bank is dedicated to supporting financial inclusion across the Kingdom by expanding and enhancing digital services and accessibility. Additionally, the Bank has continued its efforts to support “Sakani” housing program, aimed at increasing the homeownership percentage among citizens, with its market share in real estate financing amounting to 41.3%.

As a leading bank, Al Rajhi Bank recognizes its profound responsibility to strengthen sustainability practices. This entails embracing best-in-class ESG standards, ethical and fair business conduct, globally recognized risk management and compliance measures, and advocating green finance, all in alignment with Saudi Vision 2030, the Saudi Green Initiative, and the SDGs. These endeavours are explored in detail within this report.

Throughout its long-established history, Al Rajhi Bank has remained resolute in fulfilling its social obligations, an integral facet of its corporate strategy and culture. Various philanthropic initiatives and projects across local healthcare, social, and educational verticals have persisted, all aimed at serving society, fostering sustainable development, enriching well-being, and enhancing the Kingdom's overall quality of life. Described in detail in this report, the continuation of these efforts in 2023 stands as a testament to our collective pride in serving the communities in which we operate, and we are determined, Allah willing, to always be a tributary of goodness and prosperity in this giving nation.

Al Rajhi Bank adopts a profound commitment to a “customer-centric” approach, ceaselessly striving to elevate the customer experience. Achieving this entails delivering exceptional and personalised banking services that cater to their unique needs and aspirations. Moreover, the Bank places great emphasis on effective communication, earnestly considering customer feedback and requirements across all customer touch points. This invaluable feedback serves as a foundation for developing offerings that remain aligned with the ever-evolving needs of its clients. This is achieved through agile wok practices and methodologies, employing innovative tools, e.g. data management and analytics, AI, and maintaining a robust visibility across various social media. These deliberate actions underscore the Bank’s unwavering commitment to continuous improvement. In this context, the Bank adopts the following:

• Diligently following up on the “Voice of the Customer” index and focusing on potential areas that could trigger complaints to uphold our leading position in consumer rankings and ensuring customer satisfaction remains paramount.
• Enhancing our digital product offering and refining the overall customer experience.
• Creating an integrated financial ecosystem that encompasses Al Rajhi Bank, alongside entities like “Emkan” and “Neoleap” to broaden our product range and cater comprehensively to the needs of its SME clients.
• Leveraging our expansive customer base through digital channels, employing cutting- edge data management and AI techniques to maximize cross-selling opportunities, revenue generation, and overall profitability.
• Creating a dedicated digital marketing team, comprising subject-matter experts in the rapidly evolving landscape of digital marketing, in line with the Bank’s overarching marketing strategy.

At Al Rajhi Bank, our most valuable and continually renewable asset is our people. We consistently invest in nurturing, empowering, and comprehensively developing our human capital. Our focus begins with fostering a healthy, positive, and inspirational work environment. We prioritise the enhancement of their skills and capabilities through planned as well specialised training programs, clocking over 600,000 training hours for the year in review, ensuring that they have access to the infrastructure and technological solutions necessary for optimal performance and efficiency. Embracing best-in-class policies and practices in performance management, evaluation, development, communication, benefits, and compensation further cements our position as the preferred employer within the banking sector. This emphasises our position to sustain growth, make progress towards strategic goals, and align our operations and human resources with the swiftly evolving market dynamics and industry advancements. As part of this structure, Al Rajhi Bank Academy is instrumental in nurturing talent and honing expertise across diverse fields and responsibilities. Consistent with the Bank’s long-term goals, it is committed to providing benchmarked education and internationally recognized certifications.

Al Rajhi Bank’s exceptional performance and pioneering role throughout a year marked by remarkable achievements has been recognised through a multitude of prestigious awards bestowed by leading local and global institutions. These awards include Best Bank for Retail Banking Services by MENA Banking Excellence; Best Digital Banking Services by Global Banking and Finance; Best Corporate/ Institutional Digital Bank in Saudi Arabia by Global Finance. Furthermore, the Bank’s tier-1 tradable Sukuk garnered recognition as the top issuance by “Euromoney,” while Forbes acknowledged it as holding the largest banking market value in the Middle East. A detailed account of these and several other significant awards can be found within this Report.

In 2023, we successfully concluded a three-year strategy cycle, which will now set the Bank’s strategic direction towards playing a more crucial role in adapting to changes, confronting challenges, and envisioning the future to secure further accomplishments in the long run. Today, as we step into the new year with confidence and optimism, continuing our journey toward achievements and excellence, this report provides a glimpse into Al Rajhi Bank’s strategic direction for 2024, including:

• Promoting leadership in retail banking through an expansive enhancement and innovation drive in products and services, improving “Rewards” loyalty program, and prioritizing an unparalleled customer experience.
• Maintaining a pioneering position in the digital and technological sphere within the market.
• Sustaining progress and cultivating market share expansion in corporate banking services.
• Broadening offerings tailored for SMEs, aligned with the “One Client, One Bank” approach.
• Pioneering cutting-edge financing and payment solutions across the Kingdom.
• Upholding the highest compliance standards across all banking activities and services.
• Continuously equipping our employees with the required tools and programs to foster innovation and support their growth.
• Advancing the suite of services provided by the Bank and its subsidiaries, integrating them into a cohesive financial system empowered by the latest technologies.

As we anticipate the unveiling of our new three- year strategy in February 2024, I wish to extend my heartfelt gratitude to the Chairman and Board Members for their unwavering support and invaluable guidance. My appreciation also extends to our customers, shareholders, and all our valued partners in success. I hold deep admiration for our colleagues—the dedicated staff of Al Rajhi Bank—and the leadership teams across various departments and subsidiaries. Their tireless dedication fuels the growth and sustainability of this prominent financial institution, solidifying its leading position locally, regionally, and globally. We eagerly look forward to a fresh start in a bright and prosperous new year.

 

Waleed Abdullah Almogbel
Managing Director and CEO