chairman’s statement

In line with the Kingdom’s transformative changes and the major development revitalisation spanning all sectors, we are proud to report that alrajhi bank achieved its highest net income after Zakat.

It is with great pleasure that we present alrajhi bank’s Annual Report for the year 2024 to our esteemed shareholders, customers, partners, and the financial and business community. This report highlights our key performance indicators (KPIs) including achievements, development projects, social and environmental responsibility initiatives, progress in digital transformation, local and international accolades, and future aspirations of alrajhi bank, all within the framework of our new "harmonize the group" strategy.

Amid numerous regional and global challenges that have persisted in recent years including disruptions to supply chains, global trade and investment flows, as well as cyber and climate risks, the Kingdom has demonstrated its capacity to not only absorb external shocks, but also to successfully strengthen and diversify its economy in a challenging global operating environment. The Kingdom has seen remarkable growth, particularly in the non-oil sector, which grew by 4.3%, alongside increased government spending and the completion of several significant infrastructure projects. These achievements have bolstered the Kingdom’s capacity to host major global events, culminating in gaining global support for Saudi Arabia's hosting of Expo 2030 and the FIFA World Cup 2034. These historic achievements, which coincide with the tourism boom and Saudi Arabia’s transformation into a global destination, reflects the impressive progress already made as a result of the Kingdom’s Vision 2030 initiatives. These significant milestones continue to be achieved ahead of schedule, and are significantly contributing toward the strategic objectives of building a vibrant society, a thriving economy, and an ambitious nation.

As a key pillar of the national economy, alrajhi bank’s successes contribute significantly to the Kingdom's economic prosperity. The bank plays a vital role in advancing the banking sector under the guidance of the Saudi Central Bank (SAMA). It remains at the forefront of programs, initiatives, and projects aligned with the Kingdom’s Vision 2030, embedding this vision at the core of its strategy and operations. alrajhi bank, supported by its foreign branches and subsidiaries, continued to build on the successes of previous years, and deliver a strong performance, achieving positive results across multiple business lines. The bank has successfully navigated the challenges posed by global economic crises and fluctuations, leveraging its key strengths. These include maintaining high asset quality with non-performing loans (NPL ratio) accounting for only 0.76%, and sustaining a robust capital position with a capital adequacy ratio (CAR) of 20.2%. Additionally, the ratio of demand and other non-profit bearing deposits to total deposits reached 73.4%, reflecting the confidence of the bank’s large customer base, while also contributing towards mitigating liquidity risks. While the loan to deposit ratio (LDR) stands at 85.5%,

the bank maintains a solid proportion of high-quality liquid assets, with a liquidity coverage ratio (LCR) of 120%. In line with the Kingdom’s transformative changes and the major development renaissance spanning all sectors, we are also proud to report that alrajhi bank achieved its highest net income after Zakat since establishment, totalling SAR 19.7 Bn., reflecting a growth rate of 19%. The bank’s assets grew by 20.6% compared to 2023, reaching SAR 974 Bn., while shareholders’ equity increased by 15.2% to reach SAR 123 Bn.

The non-retail finance portfolio grew by 31%, while the real estate finance portfolio expanded by 14%, reflecting the bank’s commitment to increasing citizens' homeownership rates. Additionally, the bank continued its support for small and medium-sized enterprises (SMEs), providing over SAR 39 Bn. through a range of bundled services, innovative and diverse financial solutions that optimise group synergies, to foster sustainable growth. The SME finance portfolio grew by 30% compared to 2023 as a result of these focused efforts. The bank also holds the largest market share in real estate finance, with 41.1%, in retail finance with 41.2%, and in the number of point-of-sale (POS) devices, reaching 41%. Confirming our success in attracting foreign investments, a key goal of the Kingdom’s Vision 2030, the percentage of foreign ownership in the bank’s shares has surpassed 14%, with a market value of SAR 54 Bn. This achievement positions alrajhi bank as one of the largest companies listed on the Saudi Exchange in terms of foreign ownership.

Reaffirming its regional and international leadership in issuing sustainable sukuk and supporting global efforts to mitigate the negative impacts of climate change, alrajhi bank reached a significant milestone in 2024 with the successful launch of its first sustainable capital sukuk issuance, valued at USD 1 Bn. This marks the first tranche of alrajhi bank’s USD-denominated AT1 issuance in global markets, building on the bank's strong track record in international offerings. With subscription volumes exceeding USD 3.5 Bn., this accomplishment underscores the bank’s robust position in global markets and reflects strong investor demand, further advancing the bank’s business and sustainable projects.

By presenting this report, we also reaffirm our commitment to the continued application of corporate governance principles, adhering to regulatory guidelines on disclosure and transparency, providing greater value to our stakeholders, and strengthening communication with our customers. After completing the implementation of the “Bank of the Future (BOTF)” strategy, we launched our new “harmonize the group” strategy in 2024. This strategy emphasises on collaboration and integration across the bank’s business units and subsidiaries, expanding product offerings, acquiring new customer segments through unique value propositions, and increasing investments in digital transformation, automation, and artificial intelligence. It prioritises delivering customer-centric financial solutions while providing an exceptional experience for both corporate and retail customers. To support this approach, we acquired a 65% stake in “Drahim,” a leading financial management and automated investment platform licensed by SAMA. This acquisition leverages advanced technologies to strengthen the bank’s leadership in the financial sector, empowering fintech companies to develop solutions for corporate and retail financial needs, investments, and payments, while enhancing service quality. Additionally, we established “neotek,” a company specialising in open banking and financial technology, which has received SAMA approval to operate within the regulatory sandbox. This initiative enhances neotek's ability to develop cutting-edge financial technology solutions, reinforcing alrajhi bank’s pioneering role in advancing the Kingdom’s financial sector in alignment with the goals of the Kingdom’s Vision 2030.

Embodying alrajhi bank’s commitment to social responsibility as both a national duty and a fundamental right to the society it serves, the bank operates under the slogan “Right and Duty”. It is devoted to supporting social housing and education initiatives, such as the Graduate Development Program and the Educational Orphans Care Program, which benefits over 200 male and female students pursuing higher education in 37 academic specialisations at 28 private universities across the Kingdom. Furthermore, the bank continues to support and establish medical centres for cardiac catheterisation, diabetes treatment and care, physical therapy, and kidney transplants for patients referred through the “Shifa” platform. Additionally, the bank contributes to public health by providing blood donation vehicles in Riyadh and Medina to support the blood bank at King Faisal Specialist Hospital in Riyadh. In addition to enabling its customers to contribute to charitable initiatives through the “Quick Donation” service through the alrajhi mobile app, the bank, together with its customers, has donated over SAR 250 Mn. to the “Jood Eskan” housing project. Further details of these initiatives, as well as investments exceeding SAR 5 Bn. in social responsibility and environmental sustainability efforts, are provided in this report.

In recognition of its growing and impactful role, alrajhi bank has been awarded top honours in social responsibility by the Ministry of Human Resources and Social Development in its inaugural Social Responsibility Awards, achieving first place in the Gold Category for “Social Responsibility Practices”. Further solidifying its position, alrajhi bank was crowned the “Most Valuable Brand” in Saudi Arabia by Kantar BrandZ, and ranked as the Most Valuable Banking Brand in the financial and banking sector by Brand Finance. Additional local and international awards and achievements are detailed within the value drivers: 2024 at a glance page of this annual report.

Through proactive engagement with environmental concerns that increasingly impact all aspects of life and human activity, alrajhi bank has reaffirmed its commitment to the Kingdom’s net zero emissions target. In alignment with the goals of the “Saudi Green Initiative (SGI)” and the principles of green financing aligned with ESG practices, the bank continues to lead in adopting carbon-free renewable energy sources. Key initiatives include investments in solar energy, biofuels, alternative energy sources, water desalination, and wastewater treatment. The bank also focuses on energy and electricity management through environmentally friendly technologies and designs, the use of recycled materials, and the adoption of paperless operations, supported by the rapid transition from traditional to digital processes. These measures have collectively contributed to energy conservation and a significant reduction in alrajhi bank’s carbon footprint.

At alrajhi bank, we believe that investing in people is the most valuable investment of all. As such, we are deeply committed to nurturing and developing the Kingdom’s talent in line with the highest international standards. Through the alrajhi Academy, university graduates are equipped with cutting-edge skills in integrated banking services. To date, the academy has trained over 740 employees, with an intake of over 100 graduates annually. These graduates are well-prepared to navigate the competitive labour market and are often ready to assume leadership positions within two years of completing the training program. This ensures that the bank has a strong, diverse pool of leadership talent capable of meeting the demands of today and shaping the future.

With nearly seventy years of accumulated experience and a proven track record of success in serving the national economy and customers with different aspirations across multiple segments, alrajhi bank remains a key player in the development of the financial sector under the guidance of SAMA. Moving forward, the bank will continue its progressive journey in line with the “harmonize the group” strategy. The bank is also committed to adhering to regulatory directives, meeting environmental standards, and addressing the challenges of climate change. alrajhi bank will also remain at the forefront of innovation, staying aligned with advancements in technology, digital transformation, and artificial intelligence. This progress is fuelled by an unwavering spirit of optimism and confidence, inspired by the remarkable achievements and prosperity of our beloved Kingdom across all sectors.

In conclusion, all of us at alrajhi bank are deeply honoured to extend our utmost thanks, gratitude, and appreciation to the Custodian of the Two Holy Mosques and His Highness the Crown Prince – may Allah protect them and grant them success – 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 SAMA, 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 Honourable 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. Further, I express my utmost appreciation to our exceptional team members, who continue to drive alrajhi bank’s success in the world of Islamic banking services. Together, as one unified team, we are ready to embark on a journey toward new horizons and an even brighter future.

May Allah grant success,

Abdullah bin Sulaiman Al Rajhi
Chairman of the Board of Directors