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INTRODUCTION

The Al-Rajhi Bank (known as the Al Rajhi Banking and Investment Corporation until a
February 23, 2006 name change[1]) is the world's largest Islamic bank,[2] and a
major investor in Saudi Arabia's business world. It is one of the largest joint stock
companies in the Kingdom, with a paid up capital of SR 6.75 billion. Its Head Offices
are located in Riyadh and there are six Regional Offices. Al Rajhi Bank also has 18
branches in Malaysia and plans to have 50 branches in that country by 2010.
Founders , Al-Rajhi Bank's shareholding pattern show that the four sons of Abdul
Aziz Al Rajhi (Saleh, Sulaiman, Abdullah and Mohammed) and their heirs remain the
corporation's primary equity holders. The Al Rajhi family is considered, by most in
Saudi Arabia, as the country's wealthiest non royals, and among the world's leading
philanthropists.
Activities Of the Bank
Banking and trading activities of Al-Rajhi Bank began 30 years ago. In 1398 H
(1978) individual establishments were merged into "Al Rajhi Trading and Exchange
corporation" and in 1404 H (1987) it was converted into a joint stock company
under the royal decree No. 59, dated 3/11/1407. In 5/4/1409 H, the company was
renamed to Al-Rajhi Banking and Investment Corp under the ministerial decision No.
1398, and again, in 2006, to Al Rajhi Bank.
1.

Cheque deposit

2.

Give the customer loans as a form of service

3.

Automated Teller Machines (ATM) (Appendix 1)

4.
Enables its customers to transfer money from their accounts to other
peoples accounts

EXECUTIVE SUMMARY

Al Rajhi Bank is the worlds largest Islamic bank by asset size (SAR 165 billion) with
a paid up capital of SAR 15 billion and a sizeable presence across the country. The
Bank is a leading bank in Saudi

Arabia and has:

Market share of 13.8%, 14.1% and 12.7% in banking deposit, credit and
assets respectively and 25.2% market share in ATMs and 30.7% share in branches;

Net Investment Income of SAR 8.5 billion (USD 2.265 billion) and net interest
margin of 6.6% for 2008;

Operating income of SAR 10.6 billion and a debt-equity ratio of 0.125 in 2008;

CAR of 21.4% and NPA at 1.2% of gross investments for 2008.

The Bank is positioning itself as a universal bank of choice for customers. This is
evident from new faces joining the Banks management in the last couple of years.
The Bank has overhauled its operations in functional units by shifting focus from
retail to corporate and also by supporting divisions to improve operational efficiency
in order to accept the challenges of the coming era.
The results of the Banks proactive transformation and repositioning have reflected
in the Banks surging loan portfolio and deposit base. New strategies have been put
in place to ride the next economic upturn. New market entries, increasing market
share in loans, deposits and assets and launch of new innovative products and
services would be the new milestones for the Bank.
Though the competition has intensified within the banking sector, the Bank has
been at the forefront of meeting customer needs. The Bank enjoys the highest
spread in Saudi Arabia and is expected to continue with this position on the back of
low cost deposit base.
The Bank was expected to face intense competition from the new Islamic banks in
attracting deposits. However, 2008 was a dismal year for recent entrants. Bank Al
Bilad saw its deposit base shrink during the year while on the other hand, even after
five months of operations, Alinma Bank with its huge capital base failed to attract
any deposits. This highlights the strong brand image enjoyed by Al Rajhi Bank as an
Islamic bank in the Saudi banking sector.