business portfolio review

treasury group

Conditions remained stable and conducive for our treasury business in 2025, as the Kingdom continued its economic transformation plan, with strong growth in non-oil sector activity backed by Vision 2030’s ambitious reform agenda. Saudi Arabia continued to strengthen its debt market as a core component of this economic transformation, aiming to diversify funding sources with a significant increase in debt and sukuk issuances. This move has established the Kingdom as a major emerging markets player in debt capital markets worldwide.

Our Treasury Group remained strongly positioned to capture new opportunities arising in this highly dynamic economic landscape, especially in corporate treasury solutions. In line with our overarching ‘harmonize the group’ strategy, Treasury enriched our cross-sell value proposition by expanding into new markets and introducing new products. A broader mix of funding from different markets and instruments during the year mitigated risk concentration and increased stability, ensuring healthy regulatory ratios and control over our cost of capital. We penetrated the remittances and Multiple Currency Card space further by offering fund transfers in new currencies. Our gold trading business performed exceptionally well in 2025, while Treasury’s expanded product offering in structured investment solutions further strengthened our balance sheet and market repute to build stable liabilities.

For the reporting period, Treasury recorded:

A diversified funding mix

2025 saw the Treasury Group continue to strengthen our balance sheet structure and support liquidity requirements by diversifying its funding mix. Treasury tapped into international debt capital markets twice during the reporting period, which paved the way for a number of historic firsts in the Kingdom’s banking sector. In January 2025, we successfully issued a shariah-compliant USD 1.5 Bn. sustainable sukuk denominated in US dollars, the largest ever issuance of an Additional Tier 1 (AT1) instrument by a MENA bank to date. The sukuk built on the success of our previous international issuances in 2023 and 2024, receiving strong demand from both regional and international investors with coverage exceeding 200%, further enhancing our position in global markets. During the third quarter of 2025, we successfully issued an USD 1 Bn. Tier 2 social sukuk, marking our first ever Tier 2 issuance in international debt markets. This shariah-compliant sukuk that forms part of our Sustainable Finance Framework, was issued with the lowest profit rate for a Tier 2 instrument in the Saudi market, as well as one of the lowest globally.

Beyond sukuk issuances, Treasury continued to further diversify our funding mix by expanding into other long-term funding instruments (syndicated loans), Certificates of Deposits (CDs), trade loans, and term repurchase agreements (term repos).

An expanding product portfolio

The Treasury portfolio remains well diversified in terms of duration, credit rating and geographical distribution. Shariah approvals on new investment solutions were obtained in order to expand its range of asset classes and products to meet market demand for yield enhancement and risk management through hedging. Balance sheet management remained the key objective behind expanding the investment portfolio in 2025, a year where we continued to record a robust YoY increase in High Quality Liquid Assets (HQLA).

Our Trading Desk expanded its structured product offering with 13 new products that contributed positively to Treasury’s net income in 2025. The Structuring Desk successfully concluded multiple market making deals with local banks during the year, creating a new revenue stream for the Trading Desk, while gaining a competitive advantage in pricing for alrajhi clients.

In 2025, Treasury focused on expanding the number of active counterparties as well as the number of treasury products such as bank notes, FX and investments products each counterparty engages with. During the reporting period, we strengthened cross-selling efforts by enhancing collaboration between Treasury and other business units, particularly Corporate and Retail Banking Groups, leveraging joint client meetings, targeted campaigns, and digital platforms to identify FX, investment, and hedging opportunities. This approach resulted in higher client penetration, improved market share, and overall increase in profitability.

Additionally, we remained a Primary Dealer for the National Debt Management Centre (NDMC) in 2025, driven by our commitment to contribute towards achieving the Kingdom’s Vision 2030 goals and ensuring KSA’s continued and strengthened presence in debt markets.

A growing forex business

The reporting period saw our foreign exchange business record a significant 20.6% increase in income YoY, as we maintained top rank for the best exchange rates in the digital sphere across the Kingdom. The alrajhi FX Desk claim to the most extensive network of financial institutions (FIs) in the region, with more than 1,000 active FI relationships. We also added 6 new currencies in 2025, reaching new markets and expanding our capacity to facilitate trading in a total 55 currencies.

We grew our share of the Kingdom’s FX income market to 20.5% at the close of the reporting period, and were recognised for our achievements in the forex domain both locally and regionally:

• ‘Best Foreign Exchange Provider in Saudi Arabia’ and
• ‘Best FX Provider in the Middle East 2025’ by Global Finance

We maintained our Long-Term Foreign Currency (LT FC) credit rating during the reporting period at ‘A-’ by S&P Global.

Strengthening client value proposition

During the year in review, Treasury Group facilitated direct client engagement through both physical and virtual meetings; visits were conducted to gain deeper insight to client sentiment and needs, while virtual sessions provided clients with market updates and awareness on new product offerings.

Treasury Group closely collaborated with HR to facilitate necessary trainings for Treasury team members in 2025, while also recruiting top talent from a competitive job market. These investments in capacity building were aimed at elevating the level of knowledge and expertise across the Treasury team, equipping them with the necessary skillset to identify gaps in product offerings, and the capabilities to collaborate with other business units to structure new financial instruments to capitalise on emerging market demands.

Our investments in Treasury technology continued in 2025 with a number of significant upgrades and improvements on our core technology infrastructure. Key among these upgrades is the integration of a new module to the Treasury Management System MUREX, which enabled the Treasury Group to expand product offerings. A number of new functions were also added to Treasury’s Electronic Trading Engine.

Treasury Group also ensured compliance in 2025 with several new regulatory requirements implemented by SAMA. Most significant among these were the implementation of the Bilateral Initial Margin (BIM) for non-centrally cleared derivatives aligned with the BASEL III framework, and the mandate for a Unique Product Identifier (UPI) for over-the-counter derivatives for reporting purposes, which aligns us with a broader, globally coordinated effort to enhance transparency in the derivatives market. Treasury also carried out the implementation of smaller gold-related contracts to leverage growing market demand and higher volumes during the reporting period.

Gold trading

2025 witnessed a global price rally for gold, largely driven by persistent inflation, heightened geopolitical tensions, and record levels of global central bank purchases of gold. The gold share in global reserves reached 23% in the second quarter of 2025, the highest level in 30 years. This boost of confidence in gold bullion as a long-term safe asset drove a strong increase in demand for gold during the reporting period. We prioritised intensive relationship management through regular visits and proactive engagement, facilitating both a significantly enhanced customer experience, and increased gold sales.

Treasury’s digital gold wallet ‘Paper Gold’ also performed exceptionally well in 2025, due to a high demand for gold from retail customers. We enabled fractional purchases by introducing a 1-gram gold trading feature through the wallet, attracting new customers to participate in gold trading.

As a result, our gold trading business performed outstandingly well during the year in review, with bullion income more than tripling YoY with an increase of 216%.