Al Rajhi Banking and Investment (1120) Q2 2025 earnings summary

Executive summary

• Net income after Zakat for 1H 2025 rose 32.5% YoY to SAR 12.1 billion, driven by strong growth in operating and non-yield income.

• Total assets surpassed SAR 1.04 trillion as of 30 June 2025, up 19.8% YoY, reflecting robust expansion in financing and investments.

• Return on equity reached 23.5% and return on assets 2.4%, maintaining market-leading profitability.

• Strategic initiatives included digital banking expansion, new retail segments, and enhanced ESG performance.

• Independent auditors found no material misstatements in the interim financials.

Financial highlights

• Operating income for 1H 2025 rose 26.5% YoY to SAR 18.8 billion, with net yield income up 25.2% and non-yield income up 30.9%.

• Net financing and investment income reached SAR 14.4 billion, up from SAR 11.5 billion YoY.

• Operating expenses rose 9.9% YoY, but cost-to-income ratio improved to 22.5%.

• Net impairment charge increased 28.4% YoY to SAR 1.1 billion, reflecting portfolio growth.

• Basic and diluted EPS for six months was SAR 2.86, up from SAR 2.16 YoY.

Outlook and guidance

• FY 2025 guidance maintained: high single-digit financing growth, cost-to-income ratio below 23.5%, ROE above 22.5%.

• Management expects continued growth in retail and corporate financing, supported by robust asset quality.

• Interest rates expected to decline in 2H 2025; NIM outlook remains positive due to fixed-rate book.

• Focus remains on sustainable growth, product penetration, and leadership in digital and ESG standards.

• Credit demand expected to stay positive, supported by economic diversification.