subsidiaries

With the launch of alrajhi bank’s new ‘harmonize the group’ strategy at the onset of 2024, Tuder – the real estate and property management arm of the bank took on a more significant role as a support business, to contribute towards the group’s new strategic objectives. Goal alignment between the bank and Tuder’s strategies saw the subsidiary rolling out a number of initiatives for cost and revenue optimisation, quality enhancements, and efficiency improvements across the group during the year in review, recording SAR 134 Mn. in total revenue for the bank and its subsidiaries at the close of 2024.

Cost efficiencies through value engineering

Tuder’s value engineering initiatives continued to eliminate unnecessary costs in 2024, while gradually in-sourcing highly sought-after services through applicable means. Initiatives rolled out by Tuder during 2024 have resulted in substantial cost savings amounting to millions for the group, and are projected to save significant operational expenses in the long-term. The utilisation of fixed assets was also a point of focus, with Tuder looking to sell or relocate tangible assets such as unused or underused furniture across its managed properties. The execution unit rates for renovation projects were reduced further, resulting in more effective budget allocation for projects as well as those with granted approvals across the entire project portfolio. This improvement was further complemented by new budgeting and forecasting tools, and strategic negotiations with bidders for fair prices and favourable long-term partnerships.

For revenue optimisation, Tuder introduced a fee structure for all previously uncharged services, as well as for new services tailored to client needs in 2024, given its more centralised role within the group. More outsourced services are also being brought under Tuder’s management in-house, thereby making substantial savings in management fees. Tuder collaborated with the bank and the other subsidiaries to monitor performance metrics and conduct regular audits to implement quality enhancements across the group. These efforts were supported by streamlining processes and automating tasks, with Tuder leveraging technology to enhance productivity and efficiency.

In 2024, Tuder successfully met a number of performance objectives, successfully completing 97 projects across the group, as well as the installation, renovation and cancellation of a total 581 ATMs, successfully optimising the bank’s reach and coverage across the Kingdom. Tuder also reached an overall occupancy rate of 92% in real estate under management during the reporting period, achieving a noteworthy 100% occupancy at the alrajhi bank Cash Centre.

The year was not without its challenges; While Tuder achieved the 50% licence compliance target set for 2024 by launching the ‘Government Regulation Compliance Initiative’, By continuing the implementation of this initiative, Tuder remains committed and on track to reach 100% compliance and zero fines in 2025. Yet another pressing challenge faced by Tuder was the requirement for round-the-clock security for all branches and remittance centres, which was addressed by Tuder with the implementation of ‘The Command Centre Project’ within four months during the reporting period. The Command Centre, considered a crucial support service for the group, provides for daily security report reviews as well as CCTV reviews for all branches, ensuring benchmarked standards in safety and security for alrajhi bank and its subsidiaries.

During the year in review, a value engineering study was conducted on vendors for multiple services including mechanical, electrical and plumbing (MEP) services; the study helped Tuder procure the most cost-effective vendors and materials, resulting in additional cost reductions with zero compromise on quality. A value engineering initiative was also conducted and applied on the Al Fursan branch project for alrajhi bank, to ensure best prices in the procurement of materials without affecting the quality and standards. Tuder’s efforts resulted in a significant 14% cost reduction for the project.

Tuder highlights for 2024

Driving energy efficiencies

Under its comprehensive Energy Efficiency Programme implemented to reduce the operational carbon footprint across alrajhi bank properties, Tuder continued to enhance power and energy efficiencies, covering a number of initiatives for energy saving including the installation of solar panels, air-conditioner (AC) upgrades, and the adoption of LED lighting.

Through the ‘Utilities Consumption Optimisation Project’, Tuder wished to improve savings on water and electricity bills across 58 high-consuming branches identified during the preceding financial year, introducing resource-efficiency solutions with a goal to reduce utility payments up to 30% by 2026. Tuder invested SAR 900K in capital expenditure for energy efficient solutions across 118 branches and 60 AC upgrades across the group, with a projected ROI of SAR 100K in annual savings in operational expenses in the long-term. Tuder’s efficiency in Facility Management saw the subsidiary reach a noteworthy 97% resolution rate for maintenance tickets.

At the close of 2024, Tuder had installed solar power systems across 64 alrajhi properties across the Kingdom. While the initial investment in the solar systems amounted to SAR 16 Mn., the solar installations alongside other strategic measures taken by the bank to reduce power usage, are collectively contributing towards an estimated cost saving of approximately SAR 2.5 Mn. per year – a significant and highly sustainable ROI for the bank. The solar power systems will also generate clean and green energy, contributing to further reducing the bank’s operational carbon footprint.

Rebranding the alrajhi bank network

The year 2024 saw Tuder remain on track to meet its objective of rebranding the entire alrajhi bank network and its subsidiary projects, with a highly satisfactory project completion rate of 98% at the close of the reporting period.

Tuder also continued to replace the primary ATM signage at certain alrajhi bank locations according to the requirements presented by the Retail Banking Group. The subsidiary carried out signage replacements across 95 ATM locations, accounting for an impressive 100% completion of the agreed-upon target for the reporting period.

Capacity building

Tuder conducted a comprehensive training needs analysis aimed at identifying learning gaps and requirements during the year in review, to help design effective training programmes and ensure optimal results in capacity building and human resource development. Successful recruitment strategies implemented by Tuder also ensured the subsidiary employed highly qualified candidates as in-house experts to further improve Tuder’s service standards, thereby reducing the dependence on third-party service providers. With a positive work environment strengthened by employee recognition, high engagement, career development opportunities and work-life balance initiatives, Tuder maintained high employee satisfaction and retention rates for the reporting period.