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Staying true to the principles of Shariah through our products, services and operations
corporate governance
corporate governance structure at alrajhi
11 board members
4 independent board members
3 years average Board tenure
5 Board Committees
The governance framework at Al Rajhi Bank comprises the General Assembly, the Board of Directors, the Shariah Board, as well as five Board committees and a group of executive management committees of the first and second levels. This governance structure relies on a set of key pillars that ensure clarity and sound governance. These pillars are the Bank’s values, design of the organisational structure, policies and procedures, the delegation of authority matrix, and effective communication between various internal and external stakeholders.
Policies related to the Corporate Governance Manual
The Bank applies the Key Principals of Governance in Financial Institutions under the Control & Supervision of the Saudi Central Bank (SAMA) as well as the Corporate Governance Regulations issued by the Capital Market Authority (CMA). The Bank has developed its Corporate Manual and the charters governing the Board Committees and management committees. These documents are subject to periodic review by the Board of Directors and its committees.
The Bank adopts a comprehensive set of policies and procedures that strengthen the Bank’s governance framework. At the forefront of these policies is the Related Party Transactions and Conflict of Interest Policy to better achieve transparency and integrity, while remaining compliant with the regulatory requirements under the Companies Law, its Executive Regulation, the CMA Governance Regulations, the Key Principals of Governance in Financial Institutions under the Control & Supervision of the Saudi Central Bank (SAMA) and any relevant principles and regulations.
The Bank also relies on written disclosure policies, procedures and regulations that enable shareholders and stakeholders to have access to all material information and developments without discrimination and in a timely manner. This includes information required to be disclosed according to the related laws and regulations, particularly those issued by the Saudi Central Bank (SAMA) and Capital Market Authority (CMA).
The Bank pays adequate attention to the training and qualification of members of the Board of Directors and the executive management. The Bank has prepared an introductory guide to assist the new Board members and provide them with necessary information on the Bank’s strategy, financial and operational aspects, and their obligations and duties.
The Bank also applies procedures for settling customers and shareholders complaints. These procedures are monitored by SAMA and the CMA. The Bank has also implemented a social responsibility policy and procedures aiming at enhancing the Bank’s social role.
CMA Corporate Governance Regulations
The bank has given due cognisance to apply all related laws, regulations and instructions, particularly the Corporate Governance Regulations as issued by the CMA in the Kingdom of Saudi Arabia. The following is a report on the bank’s corporate governance practices and the extent of its compliance with CMA’s regulations.
Implemented and not implemented provisions of the Corporate Governance Regulations and reasons for non-implementation
The bank applies all the provisions of the Corporate Governance Regulations issued by the CMA on 13 February 2017 and amended on 18 January 2023, except for the following articles:
| Article/ Clause No. |
Article/Clause | Justifications for non-implementation |
| Article (39) Clause “E” |
The Board shall carry out the necessary arrangements to obtain an assessment of its performance from a competent third party every three years. (Guiding paragraph) | The evaluation is done internally on an annual basis. |
| Article (84) | The Ordinary General Assembly, based on the Board recommendation, shall establish a policy that guarantees a balance between its objectives and those of the society for purposes of developing the social and economic conditions of the society. (Guiding article) | ARB has a social responsibility Policy approved by the Board of Directors. |
Board Structure
GRI
2-9, 2-17
The Bank is managed by a Board of Directors consisting of eleven (11) members, elected by the ordinary general assembly every three (3) years. Members whose term has expired may be re-elected each time according to the bank’s charters.
Names of the companies inside and outside the Kingdom in which a Board Member is a manager or a member of their current or previous Board
| Member name | Names of companies where the Board Member is a member of the current Boards or one of their directors | Inside/ outside the Kingdom | Legal entity | Names of companies where the Board Member is a member of the previous Boards or one of their directors | Inside/ outside the Kingdom | Legal entity |
| Abdullah bin Sulaiman Al Rajhi  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Ibrahim bin Mohammed Alromaih  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Abdulaziz bin Khalid Alghufaily  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Badr bin Mohammed Al Rajhi  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Khalid bin Abdulrahman Al Gwaiz  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Mansour bin Abdulaziz Albosaily  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Motassim bin Abdulaziz Almaashouq  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Hamza bin Othman Khushaim  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Raeed bin Abdullah Al Tamimi  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Abdulatif bin Ali Alseif  |
|
Inside the Kingdom |
|
|
Inside the Kingdom |
|
Waleed bin Abdullah Al Mogbel  |
|
Inside the Kingdom Outside the Kingdom |
|
|
Inside the Kingdom |
|
Composition of the Board and classification of its members, as: executive members, non-executive members, or independent members
| Member name | Membership classification (executive/non-executive/independent) |
| Abdullah bin Sulaiman Al Rajhi | Non-executive |
| Ibrahim bin Mohammed Alromaih | Independent |
| Abdulaziz bin Khalid Alghufaily | Non-executive |
| Badr bin Mohammad Al Rajhi | Non-executive |
| Khalid bin Abdulrahman Al Gwaiz | Non-executive |
| Mansour bin Abdulaziz Albosaily | Non-executive |
| Motassim bin Abdulaziz Almaashouq | Independent |
| Hamza bin Othman Khushaim | Non-executive |
| Raeed bin Abdullah Al Tamimi | Independent |
| Abdulatif bin Ali Alseif | Independent |
| Waleed bin Abdullah Al Mogbel | Executive |
Committees of the Board of Directors
The functions and responsibilities of the Committees are identified based on internal bylaws and regulatory requirements. The membership term is set at three years, ending with the expiration of the term of the Board. The Board of Directors has the power to appoint, reappoint, or terminate the membership of any member of the Committees. The Committees submit their recommendations and minutes of their meetings to the Board of Directors.
The following is a brief description of the bank’s Committees and their work.
A
– Executive Committee:The main purpose of the Executive Committee (ExCom) is to exercise all powers authorised to it by the Board and to study all matters as requested by the Board to submit recommendations or make the appropriate decisions thereof pursuant to the powers identified and authorised to it by the Board.
The Committee held seven (7) meetings during the year 2024 as follows:
| Member name | ||||||
| Meeting No. | Date | Abdullah bin Sulaiman Al Rajhi | Ibrahim bin Mohammed Alromaih | Abdulaziz bin Khalid Alghufaily | Hamza bin Othman Khushaim |
Abdulatif bin Ali Alseif |
| Chairman | Member | Member | Member | Member | ||
| 1 | 07 February 2024 | |||||
| 2. | 24 March 2024 | |||||
| 3. | 26 May 2024 | |||||
| 4. | 26 August 2024 | |||||
| 5. | 02 October 2024 | |||||
| 6. | 12 December 2024 | |||||
| 7. | 17 December 2024 | |||||
B
– Nomination and Remuneration CommitteeGRI
2-10
The main purpose of the Nominations and Remunerations Committee is to submit recommendations on the nomination of Board Members, committee members, senior executives, and candidates for positions, subject to non-objection of the Saudi Central Bank, to the Board of Directors. The Committee prepares a description of the capabilities and qualifications required for Board of Director’s membership, evaluates the effectiveness and efficiency of the Board and senior management performance, and ensures that the Bank remains compliant with the internal incentive policies, the rules of incentive practices issued by the Saudi Central Bank, and the principles and criteria for compensation, in a manner that best achieves the interests of depositors, shareholders and the Bank’s strategic objectives.
The Committee held four (4) meetings during the year 2024 as follows:
| Member name | |||||
| Meeting No. | Date | Ibrahim bin Mohammed Alromaih | Abdulaziz bin Khalid Alghufaily |
Raeed bin Abdullah Al Tamimi | Mansour bin Abdulaziz Albosaily |
| Chairman | Member | Member | Member | ||
| 1 | 09 January 2024 | ||||
| 2. | 10 March 2024 | ||||
| 3. | 13 June 2024 | ||||
| 4. | 12 December 2024 | ||||
C
– Governance CommitteeGRI
2-15
The main purpose of the Governance Committee is to support and maintain the highest standards in corporate governance, on behalf of the Board of Directors, by ensuring that sound governance practices are followed in all activities carried out by the bank through conducting an annual review of the general governance framework and related mechanisms. In addition, the Committee monitors conflicts of interest, ensures the continuous updating of the register of Related Parties, reviews requests for exemption from the governance requirements applicable at the bank, and coordinates with the Bank’s subsidiaries to support good and consistent corporate governance standards for all activities of the alrajhi bank group. The Committee also focuses on increasing awareness of the importance of governance and its activities within the Bank among all employees, shareholders, and external stakeholders, and conducts an annual evaluation of the performance of the Board of Directors, members of the Board, all Board Committees and Management Committees. It is also responsible for reviewing and updating the policies related to the Board of Directors and its members, the bank’s governance, and the conflict of interests.
The Committee held four (4) meetings during the year 2024 as follows:
| Member name | ||||
| Meeting No. | Date | Mansour bin Abdulaziz Albosaily | Badr bin Mohammed Al Rajhi |
Raeed bin Abdullah Al Tamimi |
| Chairman | Member | Member | ||
| 1 | 25 January 2024 | |||
| 2. | 26 May 2024 | |||
| 3. | 26 August 2024 | |||
| 4. | 02 October 2024 | |||
D
– Audit CommitteeThe main purpose of the Audit Committee is to supervise the financial reporting process, oversee the internal and external auditors, and submit recommendations to the Board of Directors and shareholders to approve, appoint, and determine the remunerations and dismissal of the external auditors. The Committee also reviews and approves the scope of the audit operations and their implementation, receives key audit reports, evaluates and monitors the bank’s policy for combating financial fraud, and reviews the objectives and observations of the Shariah audit. Moreover, the Committee ensures that the senior management takes all necessary corrective measures in a timely manner to address any weaknesses in controls or non-compliance with policies, laws, and regulations, or any other issues identified by the auditors.
The Audit Committee held eight (8) meetings during the year 2024 as follows:
| Member name | ||||||
| Meeting No. | Date | Abdulatif bin Ali Alseif |
Raeed bin Abdullah Al -Tamimi |
Khalid bin Saleh Alsubail |
Yousef bin Mohammad Alsuhaibani | Osamah bin Saleh Alhedathi |
| Chairman | Member | Member | Member | Member | ||
| 1 | 30 January 2024 | |||||
| 2. | 28 April 2024 | |||||
| 3. | 02 June 2024 | |||||
| 4. | 21 July 2024 | |||||
| 5. | 06 October 2024 | |||||
| 6. | 22 October 2024 | |||||
| 7. | 24 October 2024 | |||||
| 8. | 22 December 2024 | |||||
| Name | Committees memberships in Al Rajhi Bank |
Current positions | Previous positions | Qualifications | Experience |
| Osamah bin Saleh Alhedathi | Audit Committee |
|
|
|
Held many leadership and advisory positions in the financial, administrative, and economic fields. Over 30 years of experience in the field of internal auditing. |
| Khalid bin Saleh Alsubail | Audit Committee |
|
|
|
Held many leadership and advisory positions in the financial, administrative, and economic fields. He has more than 30 years of experience in the field of internal auditing |
| Yousef bin Mohammad Alsuhaibani | Audit Committee |
|
|
|
Held many leadership and advisory positions in the financial, administrative and economic fields with over 13 years of experience in the field of internal and external auditing. |
E
- Risk Management CommitteeThe primary purpose of the Risk Management Committee is to assist the Board of Directors in maintaining oversight responsibility for activities and decisions related to Risk Management. This includes the management of capital and liquidity strategies, market risk management, operational risk, reputational risk, and any other potential risks that the bank may face.
The Committee held five (5) meetings during the year 2024 as follows:
| Member name | ||||
| Meeting No. | Date | Khalid bin Abdulrahman Al Gwaiz |
Motassim bin Abdulaziz Almaashouq | Hamza bin Othman Khushaim |
| Chairman | Member | Member | ||
| 1 | 19 February 2024 | |||
| 2. | 26 May 2024 | |||
| 3. | 18 August 2024 | |||
| 4. | 02 October 2024 | |||
| 5. | 16 December 2024 | |||
Procedures of the Board of Directors to inform its members of shareholders’ suggestions and comments on the bank and its performance
The bank documents shareholders’ suggestions provided through the General Assembly and notifies the Chairman of the Board of any other suggestions related to the bank to be presented at the next Board meeting. There is also an e-mail address dedicated to the comments and suggestions of the shareholders, which is published on the official website of the bank and on Tadawul website so that the Board can review the suggestions and comments of the shareholders.
Methods adopted by the Board of Directors in evaluating its performance and that of its committees and members
GRI
2-18
The bank’s Governance Committee evaluates the performance of the Board, its committees, and members through specific surveys at three levels: Board evaluation based on the Board of Directors terms of reference specified in the bank’s Governance Manual, evaluation of Board’s Committees and the Audit Committee based on their approved work regulations, and the self-evaluation of the Board and Committees member. The Governance Committee then prepares the annual evaluation report and submits it to the Nominations and Remunerations Committee.
Remunerations of Board members, Board Committee members, and Executive Management
GRI
2-19, 2-20
A
- Summary of the most important provisions of the remuneration policy for members of the Board, its Committees and the Executive Management:1
- Board of Directors remunerations and compensations:The members of the bank’s Board of Directors receive a fixed annual remuneration amounting to (SAR 400,000) on an annual basis for their membership on the bank’s Board of Directors and their participation in its activities.
Each member of the Board of Directors receives an amount of (SAR 5,000) for attending each of the Board’s sessions, whether the attendance is physical or through any remote means of communication.
The bank pays all actual expenses incurred by members of the Board for attending the Board meetings, including travel and accommodation expenses.
2
- Remunerations and compensations of Board members for their membership in Board sub-committees:The bank’s Board members do not receive additional remuneration for their participation in the Board sub-committees as the annual remuneration includes additional remunerations if the member participates in any Board sub-committees.
Each member of the Board of Director receives an amount of (SAR 5,000) for attending each Committee meeting, whether the attendance is physical or through any remote means of communication.
The bank pays all actual expenses incurred by members of the Board for attending the Committee meetings, including travel and accommodation expenses.
3
- Remunerations and compensations for Audit Committee members:Each member of the Audit Committee, whether from within or outside the Board, receives a fixed annual remuneration for his or her participation in the Committee’s work, estimated at (SAR 150,000) annually. Annual remunerations and compensations for non-Board Audit Committee members are not calculated as part of the annual remunerations and compensations granted to the Board member.
Each member of the Audit Committee receives an amount of (SAR 5,000) for attending each Committee meeting, whether the attendance is physical or through any remote means of communication.
The bank pays all actual expenses incurred by members of the Committee for attending the Committee meetings, including travel and accommodation expenses.
4
- Granting shares:The bank does not grant shares as remuneration to any Board member, Board Committee member, or Audit Committee member.
5
- Allocation and payment mechanisms for remunerations and compensations:Compensations and remunerations due to Board members and non-Board members are calculated on an annual basis, based on the recommendation of the Nominations and Remunerations Committee and approval of the Board of Directors. Amounts are then presented to the General Assembly for approval at its next meeting.
Remunerations can vary to reflect the member’s experience, competencies, tasks, independence, and the number of attended meetings among other considerations.
Attendance remunerations are paid annually to beneficiaries based on their attendance records for Board, sub-committees, and Audit Committee meetings.
Payments are made through Bank transfers, cheques, or any other methods approved by the bank, and members are informed of details through the relevant department at the bank.
Remunerations and compensations paid to Board members may not exceed (SAR 500,000) annually. Any additional due amounts will not be disbursed, except for the members of the Audit Committee from within the Board. Total amounts paid to Board members should not exceed 5% of total net profits.
6
- Remunerations and compensations of Senior Executives:The role of the Board of Directors includes, but is not limited to the following:
- The Board of Directors is responsible for approving the overall structure of numerations and oversight of all aspects of the remuneration system and may not delegate this responsibility to the executive management.
- The Board of Directors reviews and approves the Remuneration Policy and any of its subsequent updates, if appropriate, based on the recommendation of the Nominations and Remunerations Committee, taking into account, inter-alia, SAMA Rules on Compensation Practices approved in January 2024 and any future updates or revisions issued by the Saudi Central Bank.
- The Board of Directors reviews and approves, if appropriate, the recommendations of the Nominations and Remunerations Committee regarding the remunerations of senior executives. For this purpose, senior executives include senior managers and all those executives whose appointments are subject to non-objection by the Saudi Central Bank or other regulators.
- The Board of Directors ensures that the management has put in place detailed systems and procedures and an effective oversight mechanism to ensure compliance with the Saudi Central Bank Rules on Compensation Practices and the Financial Stability Board Principles and Standards.
7
- Structure of remunerations and compensations of Senior Executives:Remunerations structures are designed for the various levels of employees in a manner that enhances the effectiveness of risk management and achieves remunerations and compensations objectives in accordance with the highest standards of remunerations practices.
Forms of remunerations vary according to the position and role of the employee and may include cash payments, shares, and other forms of rewards and compensations.
The proportion of fixed and variable remuneration components for different business sectors is determined based on the nature and level of the employee’s responsibilities, the field of business, and the general philosophy of the Remuneration Policy of alrajhi bank. The bank ensures that the total variable remuneration does not limit its ability to strengthen the capital base.
The remunerations structure for employees working in control functions such as Risk and Compliance, Internal Auditing, etc., is designed with the aim of ensuring the objectivity and independence of these functions. In this regard, performance management and the determination of remunerations and compensations for these employees are not assigned to any person who works or has any relationship with the business sector that these employees monitor or supervise.
When determining remuneration allocations, the overall performance of the bank is taken into consideration, while their distribution to employees is based on the performance of the employees in addition to the performance of the business unit or department in which they operate. However, there is no guaranteed minimum remuneration or similar payment, other than an employee’s salary that is not based on performance.
As part of the Remuneration Policy, the bank may postpone a reasonable percentage of the performance bonus for a period of no less than three (3) years. The deferred bonus percentage and the maturity period are determined based on the nature of the business, its risks, and the activities carried out by the employee.
Where the Remuneration Policy provides for the payment of part of the remuneration and compensation in the form of shares, criteria must be set to determine the value of the share allocation. Moreover, the allocation of shares should be subject to an appropriate policy of shares retention.
Joining bonuses are not permitted unless clearly aligned with long-term value creation and prudent risk-taking. Payments should be related to the performance achieved over time and designed in a way that does not reward failure. Joining bonuses should be at least linked to successful completion of the probation period and where possible, they should be deferred according to terms similar to the those of deferred bonuses in the employee’s previous employer.
The bank should demand from its employees that they commit themselves not to use personal hedging strategies or remunerations and liability-related insurance to undermine the risk alignment effects embedded in their remuneration and compensation arrangements. The bank confirms that there are no major deviations between granted remunerations and applicable Remunerations Policy.
B
- Summary of the most important provisions of the remuneration policy for members of the Board, its Committees and the Executive Management:| No. | Name | Board of Directors meetings |
Audit and Compliance Committee meetings |
Executive Committee meetings |
Nomination and Remunerations Committee meetings |
Governance Committee meetings |
Risk Committee meetings |
Annual remuneration |
Total | Total paid to member according to policy |
||||||
| No. | SAR | No. | SAR | No. | SAR | No. | SAR | No. | SAR | No. | SAR | SAR | SAR | SAR | ||
| 1. | Abdullah bin Sulaiman Al Rajhi | 7 | 35,000 | – | – | 7 | 35,000 | – | – | – | – | – | – | 400,000 | 470,000 | 470,000 |
| 2. | Ibrahim bin Mohammed Alromaih | 6 | 30,000 | – | – | 7 | 35,000 | 4 | 20,000 | – | – | 400,000 | 485,000 | 485,000 | ||
| 3. | Abdulaziz bin Khalid Alghufaily | 7 | 35,000 | – | – | 7 | 35,000 | 4 | 20,000 | – | – | – | – | 400,000 | 490,000 | 490,000 |
| 4. | Khalid bin Abdulrahman Al Gwaiz | 7 | 35,000 | – | – | – | – | – | – | 5 | 25,000 | 400,000 | 460,000 | 460,000 | ||
| 5. | Badr bin Mohammed Al Rajhi | 7 | 35,000 | – | – | – | – | – | – | 4 | 20,000 | – | – | 400,000 | 455,000 | 455,000 |
| 6. | Raeed bin Abdullah Al Tamimi * | 7 | 35,000 | 8 | 40,000 | – | – | 4 | 20,000 | 4 | 20,000 | – | – | 550,000 | 665,000 | 665,000 |
| 7. | Hamza bin Othman Khushaim | 7 | 35,000 | – | – | 7 | 35,000 | – | – | – | – | 5 | 25,000 | 400,000 | 495,000 | 495,000 |
| 8. | Abdulatif bin Ali Alseif * | 6 | 30,000 | 8 | 40,000 | 7 | 35,000 | – | – | – | – | – | – | 550,000 | 655,000 | 655,000 |
| 9. | Waleed bin Abdullah Al Mogbel | 7 | 35,000 | – | – | – | – | – | – | – | – | – | – | 400,000 | 435,000 | 435,000 |
| 10. | Mansour bin Abdulaziz Albosaily | 7 | 35,000 | – | – | – | – | 4 | 20,000 | 4 | 20,000 | – | – | 400,000 | 475,000 | 475,000 |
| 11. | Motassim bin Abdulaziz Almaashouq | 7 | 35,000 | – | – | – | – | – | – | – | – | 5 | 25,000 | 400,000 | 460,000 | 460,000 |
| 12. | Khalid bin Saleh Alsubail | – | – | 8 | 40,000 | – | – | – | – | – | – | – | – | 150,000 | 190,000 | 190,000 |
| 13. | Yousef bin Mohammad Alsohibani | – | – | 8 | 40,000 | – | – | – | – | – | – | – | – | 150,000 | 190,000 | 190,000 |
| 14. | Osamah bin Saleh Alhedathi | – | – | 8 | 40,000 | – | – | – | – | – | – | – | – | 150,000 | 190,000 | 190,000 |
| Total | 75 | 375,000 | 40 | 200,000 | 35 | 175,000 | 16 | 80,000 | 12 | 60,000 | 15 | 75,000 | 5,150,000 | 6,115,000 | 6,115,000 | |
* Annual remuneration includes: remuneration for Board membership and remuneration for membership in the Audit Committee.
C
- Remunerations and compensations paid to five Senior Executives who received the highest remunerations from the bank, including the CEO and CFO, in 2024.| Elements | 2024 full elements |
2023 full elements |
| Salaries and compensations | 11,490,000 | 11,310,000 |
| Allowances | 5,935,115 | 5,795,441 |
| Periodic and annual rewards | 12,130,000 | 12,930,000 |
| Incentive schemes | 24,500,000 | 22,019,667 |
| Any other in-kind compensations | 2,338,053 | 1,223,086 |
| Total | 56,393,168 | 53,278,194 |
Employee benefits and plans
GRI
201-3
The bank offers its employees a number of benefits and bonuses during or at the end of the service period, according to the Saudi Labour Law and the bank’s policies. The provision for employees’ end-of-service benefits is calculated using the entitlement assessment form in accordance with the Saudi Labour Law and local regulatory requirements. The provision for the end-of-service benefits amounted to SAR 997 Mn.
The bank also grants deferred shares to its senior employees and to valuable human assets that the Bank needs to retain. This ensures strengthening the bank’s long-term relationship with those employees. Granting of shares is subject to the approval of the Board of Directors upon the recommendation of the Nominations and Remunerations Committee.
Any penalty, sanction, precautionary measure, or precautionary restriction imposed on the Bank by the CMA or any supervisory, regulatory, or judicial authority
There are no fines imposed by the Capital Market Authority.
Penalties imposed by Saudi Central Bank
GRI
2-27
| Violation subject* | Fiscal year 2024 | Fiscal year 2023 | ||
| Number of penalty decisions |
Total amount of fines in SAR |
Number of penalty decisions |
Total amount of fines in SAR |
|
| Violating the supervisory instructions of the Saudi Central Bank | 59 | 102,638,386 | 53 | 34,313,692 |
| Violating the instructions of Saudi Central Bank related to customer protection | 5 | 4,098,840 | 8 | 1,960,760 |
| Violating the instructions of Saudi Central Bank related to cybersecurity’s risk | 1 | 11,860,000 | 2 | 580,000 |
| Violating the instructions of Saudi Central Bank related to due diligence in combating money laundering and terrorism financing | 2 | 115,000 | 5 | 565,000 |
* the bank has creating corrective action plans for each penalty imposed by SAMA.
Fines imposed by other legal entities
GRI
2-27
| No. | Violation subject | Total amount of fines in SAR |
|
| Fiscal year 2024 |
Fiscal year 2023 |
||
| 1. | Due to not renewing the licenses and failure to display the QR code on ATMs | 105,169 | 2,569,100 |
Outcomes of the annual review of internal control procedures at the Bank, in addition to the Audit Committee opinion on the adequacy of the Bank’s internal control system
The bank’s executive management is responsible for designing and maintaining an appropriate internal control system with the Board of Directors’ direct supervision. The system has been designed to properly mitigate risks that could impair the realisation of the bank’s strategic and operational objectives. The bank’s executive management has adopted a suitable integrated internal control system aligned with the regulatory requirements of the Saudi Central Bank. The following are some of the key components of the bank’s internal control system:
The bank has completed, approved, and continuously develops the overall governance framework through which appropriate control tools are prepared and updated at the bank level and the roles and responsibilities of the Bank’s various levels are clarified, including the Board of Directors, the Board committees, and other administrative committees.
Monitoring the bank’s activities in general and making important decisions through committees formed to ensure that the bank’s activities are running properly in order to protect and ensure the quality of the bank’s assets.
The Auditing Department monitors the adequacy of the bank’s supervisory procedures and adheres to them, and prepares a presentation clarifying the focus and development aspects.
The Internal Control Committee (ICC) formed at the bank continuously follows up on the observations and control operations in departments such as Internal Auditing, Risks and Compliance, Account Differences, and other departments, and reviews the level of progress in addressing those observations and developing solutions to any obstacles that the bank’s departments may face in this regard.
The bank has a set of policies and procedures that govern its various activities. The bank also reviews these policies and procedures periodically to verify their adequacy, efficiency, and suitability for the bank’s activities.
Most of the operations of the bank are executed through automated systems, which helps in reducing manual errors and chances of fraud.
The bank has specialised departments for evaluating and monitoring internal control systems, including Internal Audit, Compliance, Fraud Control, and various risk departments.
There is an effective Audit Committee supervising internal and external auditors’ activities in order to promote their independence. This Committee receives regular and periodic reports on outcomes of audits carried out on different departments and their activities.
The comments and reports of the Shariah Group are conveyed to the Audit Committee to enhance the independence of the Shariah Group.
Follow up on important transactions, fraud cases, legal cases, tax and Zakat cases, disclosures, and any matters requested by the Board of Directors from the Audit Committee.
Regular reviews on the efficiency and adequacy of the internal control system are carried out by the Internal Auditing Group based on an annual plan approved by the Audit Committee, in addition to regular reviews of some aspects of internal control by external auditors as well as the audit carried out by the Saudi Central Bank.
Annual review of internal control procedures
During 2024, alrajhi bank made every effort to ensure the adequacy and effectiveness of the internal control system, in line with the requirements issued by the Saudi Central Bank.
In addition, the activities implemented during the year 2024, which included a review of the efficiency of the internal control system through the works of Departments of Internal Audit, Risk and Compliance, have contributed to providing reasonable assurances of the adequacy of the applied internal controls, in addition to confirming the existence of systems and procedures necessary to identify and evaluate the high risks that the bank may face, the method of dealing with them, as well as the safety of their application. No findings affecting the adequacy of the internal control system were detected. Accordingly, and based on the results of the internal control system evaluation, Al Rajhi Bank has an adequate internal control system that works appropriately and is monitored and strengthened on an ongoing basis, bearing in mind that any internal control system, regardless of the level of its design and effectiveness, cannot provide absolute assurances.
General Assembly
The bank adheres to the regulatory requirements in all matters relating to Ordinary and Extraordinary General Assemblies. The bank is also obliged to provide sufficient information to enable shareholders to make their decisions.
Historical information of General Assembly meetings during the fiscal year:
| Attendance record | ||
| No. | Name | Extraordinary General Assembly 15th Meeting held on 24/03/2024 |
| 1. | Abdullah bin Sulaiman Al Rajhi | |
| 2. | Ibrahim bin Mohammed Alromaih | |
| 3. | Khalid bin Abdulrahman Al Gwaiz | |
| 4. | Waleed bin Abdullah Al Mogbel | |
| 5. | Abdulaziz bin Khalid Alghufaily | |
| 6. | Badr bin Mohammad Al Rajhi | |
| 7. | Mansour bin Abdulaziz Albosaily | |
| 8. | Hamza bin Othman Khushaim | |
| 9. | Raeed bin Abdullah Al Tamimi | |
| 10. | Abdulatif bin Ali Alseif | |
| 11. | Motassim bin Abdulaziz Almaashouq |
Bank’s significant plans, decisions, and future expectations
alrajhi bank continues to lead in the retail banking market, and intends to enhance its leadership in this sector by increasing the financing portfolio in general and real estate financing in particular. The bank also intends to strengthen its position in the corporate banking market as well as SMEs sector, while continuing to invest in the latest technologies to ensure the provision of the best banking services and products to customers through connections built within the bank and across its subsidiaries, in addition to expanding the customer base.
Description of the Bank’s dividends policy
(A) The net annual profits of the bank, which are determined after deducting all overheads and other costs and creating the necessary reserves to face doubtful debts, investment losses, and emergency obligations that the Board of Directors deems necessary in accordance with the provisions of the Banking Control Law and the directives of the Saudi Central Bank, are distributed as follows:
- The amounts required to pay the Zakat prescribed for the shareholders are calculated and the Bank pays these amounts to the competent authorities.
- At least 25% of the remainder of the net profits after deducting Zakat is carried over to the statutory reserve until the aforementioned reserve becomes at least equal to the paid-up capital.
- An amount not less than 5% of the paid-up capital, after deducting the statutory reserve and Zakat, is allocated from the remainder of the profits for distribution to the shareholders in accordance with the Board of Directors’ proposal and the General Assembly’s decision. If the remaining percentage of the profits owed to the shareholders is not sufficient to pay this percentage, then shareholders may not claim its payment in the following year or years, and the General Assembly may not decide to distribute a percentage of the profits exceeding what was proposed by the Board of Directors.
- The remaining amount is used after allocating the amounts mentioned in Paragraphs (1), (2), and (3), as proposed by the Board of Directors and decided by the General Assembly.
- Accounting records have been prepared properly
- The internal control system has been prepared based on proper fundamentals and is executed effectively
- There is no doubt about the Bank’s ability to continue its business.
(B) Subject to the provisions of Paragraph (A) and the relevant regulations and after obtaining no objection from the Saudi Central Bank, the Company may distribute interim dividends on a semi-annual or quarterly basis.
Description of any interest of the Bank’s board members, senior executives and their spouses and minor children in the Bank’s securities or any of its subsidiary companies.
A
- Members of the Board of Directors:| No. | Holder of interest, contractual papers, or subscription rights |
Number of shares at the beginning of year 2024 |
Number of shares at the end of year 2024 |
Net change |
Percentage of change % |
| 1. | Abdullah bin Sulaiman Al Rajhi | 87,229,416 | 87,229,416 | – | 0.00 |
| 2. | Ibrahim bin Mohammed Alromaih | 28,342 | 28,342 | – | 0.00 |
| 3. | Abdulaziz bin Khalid Alghufaily | 51,691 | 51,691 | – | 0.00 |
| 4. | Badr bin Mohammad Al Rajhi | 101 | 101 | – | 0.00 |
| 5. | Khalid bin Abdulrahman Al Gwaiz | 1,000 | 3,000 | 2,000 | 200.00 |
| 6. | Raeed bin Abdullah Al Tamimi | 100 | 100 | – | 0.00 |
| 7. | Abdulatif bin Ali Alseif | 1,600 | 1,600 | – | 0.00 |
| 8. | Hamza bin Othman Khushaim | 50 | 50 | – | 0.00 |
| 9. | Waleed bin Abdullah Al Mogbel | 100 | 100 | – | 0.00 |
| 10. | Mansour bin Abdulaziz Albosaily | 190,011 | 150,315 | (39,696) | -20.89 |
| 11. | Motassim bin Abdulaziz Almaashouq | – | – | – | 0.00 |
B
- Senior executives:| No. | Holder of interest, contractual papers, or subscription rights | Number of shares at the beginning of 2024 |
Number of shares at the end of year 2024 |
Net change | Percentage of change % |
| 1. | Saleh bin Abdullah Allheidan | 111,444 | 124,900 | 13,456 | 12.07 |
| 2. | Waleed bin Abdullah Al Mogbel | 100 | 100 | – | 0.00 |
| 3. | Abdulrahman bin Abdullah Al Fadda |
79,505 | 79,505 | – | 0.00 |
| 4. | Ahmed bin Saleh Al Sudais | 75,000 | 70,000 | (5,000) | -6.67 |
| 5. | Abdulrahman bin Mohammed Al Ajjaji |
450 | – | (450) | -100.00 |
| 6. | Majed bin Saleh Al Rajhi | 146,261 | 188,062 | 41,801 | 28.58 |
| 7. | Hussam bin Issam Al Basrawi | 52,787 | 99,918 | 47,131 | 89.29 |
| 8. | Abdullah bin Saleh Al Omari | – | 15,705 | 15,705 | 0.00 |
| 9. | Turki bin Mohammad Al Dafyan | 21,529 | 21,647 | 118 | 0.55 |
| 10. | Hamad bin Ibrahim Alwashmi | 10,848 | 16,000 | 5,152 | 47.49 |
| 11. | Dhary bin Mohali Alshammry | 4,258 | 14,456 | 10,198 | 239.50 |
| 12. | Thamer bin Abdullah Al Humud | 17,082 | – | (17,082) | -100.00 |
| 13. | Abdullah bin Ali Al Furaiji | – | – | – | 0.00 |
| 14. | Salim bin Hamad bin Musallam | 15,180 | 18,347 | 3,167 | 20.86 |
| 15. | Abdullah bin Saad Aljabr | 550 | – | (550) | -100.00 |
Board of Directors meetings
| Number of meetings | ||||||||
| No. | Member name | First Meeting 24 March 2024 |
Second Meeting 24 April 2024 |
Third Meeting 26 May 2024 |
Fourth Meeting 26 August 2024 |
Fifth Meeting 02 October 2024 |
Sixth Meeting 17 December 2024 |
Seventh Meeting 18 December 2024 |
| 1. | Abdullah bin Sulaiman Al Rajhi | |||||||
| 2. | Ibrahim bin Mohammed Alromaih | |||||||
| 3. | Abdulatif bin Ali Alseif | |||||||
| 4. | Abdulaziz bin Khalid Alghufaily | |||||||
| 5. | Badr bin Mohammed Al Rajhi | |||||||
| 6. | Khalid bin Abdulrahman Al Gwaiz |
|||||||
| 7. | Hamza bin Othman Khushaim | |||||||
| 8. | Raeed bin Abdullah Al Tamimi |
|||||||
| 9. | Waleed bin Abdullah Al Mogbel | |||||||
| 10. | Mansour bin Abdulaziz Albosaily | |||||||
| 11. | Motassim bin Abdulaziz Almaashouq | |||||||
Critical concerns
GRI
2-16
The Bank’s Board holds at a minimum four meetings a year, in which it reviews all matters reported by the Bank’s business and control functions, highlighting each function’s ad hoc matters as well as any concerns related to the Bank’s business conduct in its operations and its business relationships.
Bank requests for shareholder register
| No. | Request date | Request justifications |
| 1. | 04 February 2024 | Company actions |
| 2. | 04 March 2024 | Company actions |
| 3. | 26 March 2024 | Dividend Distribution File |
| 4. | 04 April 2024 | Company actions |
| 5. | 02 May 2024 | Company actions |
| 6. | 03 June 2024 | Company actions |
| 7. | 03 July 2024 | Company actions |
| 8. | 04 August 2024 | Company actions |
| 9. | 14 August 2024 | Dividend Distribution File |
| 10. | 02 September 2024 | Company actions |
| 11. | 02 October 2024 | Company actions |
| 12. | 04 November 2024 | Dividend Distribution File |
| 13. | 02 December 2024 | Company actions |
Related party transactions
During its normal business cycle, the bank makes transactions with related parties which are subject to the controls stipulated by the Kingdom’s legislative entities. The bank has disclosed related party transactions in Note (37) of its final Financial Statements for the year 2024. The following is a summary of the nature and balances of those transactions for the year ended on 31 December 2024 (all amounts are in thousands of Saudi Arabian Riyal):
Members of the Board of Directors
| Financing | 236,487 |
| Current accounts | 849,089 |
Companies and establishments guaranteed by members of the Board of Directors
| Financing | 4,561,137 |
| Contingent liabilities | 2,219,133 |
Associate
| Contributions payable | 67,399 |
| Receivable against claims | 400,240 |
| Bank balances | 656,413 |
| Net income from financing and other financial assets | 428,474 |
| Mudaraba Fees | 324,130 |
| Employees’ salaries and benefits (air tickets) | 2,167 |
| Rent and premises related expenses | 1,106 |
| Contribution – policies written | 6,756,555 |
| Claims incurred and notified during the year | 946,779 |
| Claims paid | 1,070,214 |
| Board of Directors’ remunerations | 6,115 |
| Short-term benefits | 176,488 |
| Provision for employees’ end of service benefits | 4,709 |
Following is information related to businesses and contracts in which the Bank was a party and in which there was an interest for a member of the Board of Directors, a senior executive, or any person related to their professions during the year 2024:
1
– Commercial contracts and service contracts(all figures are in Saudi Arabian Riyal)
| No. | Related party | Party associated with related party |
Position in ARB | Type of relation with related party |
Relation type |
Period | Conditions | Transactions amount for the year 2024 |
| 1. | Fursan Travel & Tourism Co. | Abdullah bin Sulaiman Al Rajhi |
Chairman of the Board | Owned by Board member | Travel & tourism services contract | Pricing contract for a period of one year automatically renewed for a similar period | Without any preferred conditions or advantages | 2,136,119 |
| 2. | Berain Company | Badr bin Mohammed Al Rajhi | Board Member | Chairman of the Board of the company | Mineral water supply services Indemnity Insurance | Pricing contract for a period of one year automatically renewed for a similar period | Without any preferred conditions or advantages | 338,963 |
| 3. | Saudi Credit Bureau | Majed bin Saleh Al Rajhi | Senior Executive | Board member of the Company | Subscriptions | Pricing contract for a period of one year automatically renewable for similar period | Without any preferred conditions or advantages | 79,771,786 |
2
– Lease contracts(All figures are in Saudi Arabian Riyal)
| No. | Related party | Party associated with related party |
Position in ARB | Type of relation with related party |
Relation type |
Period | Conditions | Transactions amount for the year 2024 |
| 1. | Mohammed Abdul Aziz Al Rajhi and Sons Investment Company | Badr bin Mohammad Al Rajhi | Board Member | The member holds a director position in the Company | Lease contract of the Southern Regional Management Building | Seven years, automatically renewed for a similar period | Lease Contract | 282,373 |
| 2. | Mohammed Abdul Aziz Al Rajhi and Sons Investment Company | Badr bin Mohammad Al Rajhi | Board Member | The member holds a director position in the Company | Lease contract for Abha direct sales office | Seven years, automatically renewed for a similar period | Lease Contract | 46,000 |
| 3. | Mohammed Abdul Aziz Al Rajhi and Sons Investment Company | Badr bin Mohammad Al Rajhi | Board Member | The member holds a director position in the Company | Lease contract for ATM site | Five years, automatically renewed for a similar period | Lease Contract | 40,250 |
| 4. | Second Unique Stores Company | Abdullah bin Sulaiman Al Rajhi Abdulaziz bin Khalid Alghufaily Waleed bin Abdullah Almogbel |
Chairman of the Board
Board Member Managing Director and CEO |
Al Rajhi Bank’s Board members are members of Al Rajhi Capital’s BoD and there is a relation of ownership and influence by Al Rajhi Capital over Al Rajhi REIT Fund and Al-Makhazen Al-Mumayazah Al-Thaniyah Company is a SPV for Al Rajhi REIT Fund | Lease contract for a branch in Riyadh | Five years | Lease Contract | 672,980 |
3
– Insurance contracts(All figures are in Saudi Arabian Riyal)
| No. | Related party | Party associated with related party |
Position in ARB | Type of relation with related party |
Relation type |
Period | Conditions | Transactions amount for the year 2024 |
| 1. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi |
Chairman of the Board | Board members in the Company | Micro and Small Business Motor Insurance | Annual contract | Without any preferred conditions or advantages | 175,674,249 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 2. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi | Chairman of the Board | Board members in the Company | Banker’s Blanket Bond and Professional Indemnity Insurance | Annual contract | Without any preferred conditions or advantages | 18,778,213.40 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 3. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi | Chairman of the Board | Board members in the Company | Directors and Officers Insurance | Annual contract | Without any preferred conditions or advantages | 1,518,023.00 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 4. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi | Chairman of the Board | Board members in the Company | Properties All Risk Policy | Annual contract | Without any preferred conditions or advantages | 9,653,043 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 5. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi | Chairman of the Board | Board members in the Company | Fire and Allied Perils – Mortgage Insurance Agreement |
Annual contract | Without any preferred conditions or advantages | 499,900 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 6. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi |
Chairman of the Board | Board members in the Company | Bancassurance Agreement | Annual contract | Without any preferred conditions or advantages | 6,111,842,137* |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 7. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi |
Chairman of the Board | Board members in the Company | Motor Insurance Agreement | Annual contract | without any preferred conditions or advantages | 436,943,275 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 8. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi |
Chairman of the Board | Board members in the Company | Marine Cargo Open Cover | Annual contract | Without any preferred conditions or advantages | 1,561,522.00 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Managing Director and CEO is a Board member | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company | ||||||
| 9. | Al-Rajhi Company for Cooperative Insurance | Abdullah bin Sulaiman Al Rajhi |
Chairman of the Board | Board members in the Company | General Commercial Liability | Annual contract | Without any preferred conditions or advantages | 84,433.00 |
| Waleed bin Abdullah Al Mogbel |
Managing Director and CEO | Board members in the Company | ||||||
| Saleh bin Abdullah Allheidan | Senior Executive | Member of Shariah Board in the Company |
*this represents the premium amount on insurance policies sold through the bank’s channels to the customer, and the bank received a commission of 446,400,000 Saudi riyals on the sale of these policies
Competing Business with the Bank or with any of its activities that any member of the Board is engaging in
| Board member’s name | Name of the Company | The Company’s main activity | The Company’s legal form | Classification of the membership |
| Motassim Abdulaziz Almaashouq | Northern Trust | Providing advice in securities, custody in securities, investment management and fund operation. | Closed joint stock company | Independent |
Legal payments
Legal payments due by the bank during the year consist of Zakat owed by shareholders, taxes, amounts paid to the General Organisation for Social Insurance, and costs of issuing visas, passports, etc.
The following table shows details of the legal payments made during the year:
| 2024 | ||||
| Description | Paid | Due for payment by end of fiscal period (unpaid) |
Brief description |
Reasons |
| Zakat | 2,725,225,627 | – | Paid | – |
| Taxes | 203,165,707 | – | Paid | – |
| VAT | 868,446,620 | – | Paid | – |
| General Organisation for Social Insurance |
281,025,663 | – | Paid | – |
| Visa and passport costs | 57,793 | – | Paid | – |
| Ministry of Labour fees | 1,661,287 | – | Paid | – |
Basis for preparing the bank’s consolidated financial statements
The bank prepares its consolidated financial statements in accordance with international accounting standards for financial institutions approved in the Kingdom of Saudi Arabia as well as other standards and publications issued by Saudi Organization for Chartered and Professional Accountants and the requirements of the Banking Control Law, the Companies Law applicable in the Kingdom of Saudi Arabia, and the bank’s Articles of Association.
Basel 3
The Bank publishes its quantitative and qualitative disclosure data on an annual basis. These disclosures are available on the Bank’s website (www.alrajhibank.com.sa).
Auditors
During the Ordinary General Assembly of the shareholders, Messrs. Ernst & Young and KPMG Al Fozan & Partners were appointed as auditors for the bank’s accounts for the fiscal year 2024. The next General Assembly will appoint external auditors for the fiscal year 2025 based on the recommendation of the Audit Committee in this regard.
The Board did not recommend replacing the external auditors before the end of the contract period.
Board of directors’ acknowledgments:
According to the available information, the auditor’s report, and current market data, the Board of Directors acknowledges the following:
Conclusion
The Board of Directors expresses its pleasure and pride in the positive results achieved by the bank during the year 2024. On this occasion, the Board would like to convey its appreciation to the Custodian of the Two Holy Mosques, HRH the Crown Prince, and our wise Government.
The bank also extends its sincere thanks to the Ministry of Finance, the Ministry of Commerce, the Saudi Central Bank, and the Capital Market Authority for their consistent cooperation and continuous support in developing the financial sector, which had a great impact and role in supporting the growth of the national economy.
The Board also seizes this opportunity to express its thanks and appreciation to the shareholders, the bank’s valued customers and its correspondents for their support, confidence and cooperation, which have had a positive impact on the Bank’s progress and prosperity. The Board also conveys its sincere thanks and appreciation to all employees of the bank for their sincere efforts and dedication. In addition, the bank extends its appreciation to Shariah Board members for their loyal efforts and effective contributions to the bank’s business.