corporate governance structure at alrajhi

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.

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 and its approved charter.

The Committee held six (6) meetings during the year 2025 as follows:

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 remuneration policies, the rules of remuneration 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 2025 as follows:

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 a review of the general governance framework and related mechanisms. In addition, the Committee 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. It is also responsible for reviewing and updating the policies related to the bank’s governance.

The Committee held four (4) meetings during the year 2025 as follows:

The Committee consists of four independent members; one from the Board of Directors and three members from outside the Board, and the 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 six (6) meetings during the year 2025 as follows:

Audit and Compliance Committee members (Non-Board members)

The 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, Cybersecurity risk, Counter Fraud Risks and any other potential risks that the bank may face.

The Committee held seven (7) meetings during the year 2025 as follows:

Members of the Risk Committee (Non-Board members)

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

The bank’s Nomination and Remuneration Committee evaluates the performance of the Board, its committees, and members through specific surveys filled by the members 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 based on their approved Charters, and the self-evaluation of the Board and Committees member.

The remuneration amounts disclosed for 2025 in this report reflect recommendations calculated in accordance with the proposed amended Policy for Remuneration and Compensation of Board, Board Committee and Executive management which will be submitted to the next annual general assembly for approval. These amounts remain subject to the General Assembly’s approval of the amended remuneration policy and the General Assembly’s approval for remuneration and Compensation disbursement resolution for 2025.

The Chairman of the Board of Directors receives a fixed annual remuneration of (X 1,600,000) for his membership and chairmanship of the Board of Directors.

A member of the Board of Directors receives a fixed annual remuneration of (X 800,000) for his membership in the Board of Directors.

Each member of the Board of Directors receives an amount of (X 5,000) for attending each of the Board’s sessions, whether the attendance is physical or through any modern technology 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.

The Chairman of the Board Committees receives a fixed annual remuneration of (X 250,000) for his membership and chairmanship of the Board Committee.

A member of the Board Committees receives a fixed annual remuneration of (X 200,000) for his membership in the Board Committee.

Each member of the Board Committees receives an amount of (X 5,000) for attending each Committee meeting, whether the attendance is physical or through any modern technology 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.

A non-Board Chairman of the Board Committees receives a fixed annual remuneration of (X 250,000) for his membership and chairmanship of the Board Committee.

A non-Board member of the Board Committees receives a fixed annual remuneration of (X 200,000) for his membership in the Board Committee.

A non-Board member in Board Committees receives an amount of (X 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 non-Board members of the Board Committees for attending the Committee meetings, including travel and accommodation expenses.

The Chairman of the Audit Committee receives a fixed annual remuneration of (X 250,000) for his membership and chairmanship of the Committee.

ARB’s Audit committee members, either from inside or outside the Board, will receive a fixed annual remuneration of (X 200,000) for their membership in the Committee.

Each member of the Audit Committee receives an amount of (X 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.

The bank does not grant shares as remuneration to any Board member, Board Committee member, or Audit Committee member.

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

Attendance remunerations are paid annually to beneficiaries based on their attendance records for Board, Board 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.

A board member shall be entitled to a remuneration for membership in each board committee, in addition to the remuneration received for board membership, in accordance with the provisions set out in the remuneration and compensation policy for members of the Board of Directors and Committees, and Senior Executives.

Remuneration and Compensations paid to the Board member and a member of board committee(s) from outside the Board should not exceed (X 2,000,000) annually, payment of any additional due amounts will be stopped.

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, 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 any relevant Laws, regulations, Remuneration and Principles and Standards.

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.

The remuneration amounts disclosed for 2025 below reflects recommendations that was calculated in accordance with the proposed amended Policy for Remuneration and Compensation of Board, Board Committee and Executive management, in which the amounts of the remuneration and compensation as well as the policy will be presented in the annual general assembly for approval. These amounts remain subject to the General Assembly’s approval of the amended remuneration policy and the remuneration and Compensation disbursement resolution for 2025. And the remuneration and Compensation shall consist of the following:

* Mr. Faisal Abaalkhail’s membership on the Board of Directors began on 6 February 2025.

* Mr. Raed Al Tamimi’s membership as Chairman of the Audit Committee began on February 6, 2025.

** Mr. Nabil Al Oufi’s membership as a member of the Board Risk Committee began on January 26, 2025.

*** Mr. Faisal AbaalKhail’s membership as a member of the Executive Committee began on February 6, 2025.

Employee benefits and plans

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 exceeded one billion Saudi Riyals at the close of 2025, reaching X 1,057 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.

There are no fines imposed by the Capital Market Authority during the reporting period.

Penalties imposed by Saudi Central Bank

* the bank has creating corrective action plans for each penalty imposed by SAMA.

Fines imposed by other legal entities

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 enhances 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 Internal Audit 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 Audit, 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 Department 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 2025, 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 2025, which included a review of the efficiency of the internal control system through the works of Departments of Internal Audit, Risk, Compliance and Finance, 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.

The Ordinary General Assembly meeting was held during the year 2025 as follows:

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

Board of Directors meetings

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

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 (36) of its final Financial Statements for the year 2025. The following is a summary of the nature and balances of those transactions for the year ended on 31 December 2025:

Members of the Board of Directors

Companies and establishments guaranteed by members of the Board of Directors

Associate

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 2025:

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:

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 Organisation 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, Ernst & Young and Deloitte & Touche were appointed as auditors for the bank’s accounts for the fiscal year 2025. The next General Assembly will appoint external auditors for the fiscal year 2026 based on the recommendation of the Audit Committee in this regard.

According to the available information, the auditor’s report, and current market data, the Board of Directors acknowledges the following:

• 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.

The Board of Directors expresses its pleasure and pride in the positive results achieved by the bank during the year 2025. 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.