Al Rajhi Banking and Investment (1120) Q2 2024 earnings summary

Executive summary

• Net income for H1 2024 reached SAR 9.1 billion, up 9.7% year-over-year, marking the highest semiannual net income in history and exceeding expectations.

• Total assets grew to SAR 867 billion as of June 30, 2024, up 7.3% YTD and 10.6% YoY.

• Operating income for H1 2024 was SAR 14.87 billion, up 9.2% YoY, driven by 11.5% growth in net financing and investment income.

• Launched "Harmonize the Group" strategy, focusing on universal banking, digital transformation, and ESG.

• Board approved SAR 5.0 billion interim dividend for H1 2024 at SAR 1.25 per share.

Financial highlights

• Net income after Zakat for H1 2024: SAR 9.1 billion (+9.7% YoY); Q2 2024: SAR 4.7 billion (+13% YoY).

• Operating income: SAR 14.87 billion (+9.2% YoY); net financing & investment income: SAR 11.5 billion (+11.5% YoY).

• Cost to income ratio improved to 25.9% in H1 2024; EPS for H1 2024 was SAR 2.16, up 10% YoY.

• Customer deposits rose to SAR 622.6 billion, up 9.1% YoY.

• Total equity increased to SAR 116.4 billion from SAR 106.8 billion at year-end 2023.

Outlook and guidance

• 2024 guidance revised: financing growth now expected at high single digits; net profit margin to expand by 5–15 bps.

• Cost to income ratio to remain below 26%; ROE expected above 19.5%; Tier 1 capital ratio to stay above 20%.

• Cost of risk forecasted at 0.25%–0.35%; interest rates anticipated to decline in 2H 2024.

• Board declared SAR 5.0 billion interim dividend for H1 2024, with eligibility as of 12 August 2024.

• Focus on capital adequacy, regulatory compliance, and strategic growth in digital and customer-centric offerings.