Al Rajhi Banking and Investment (1120) Q4 2024 earnings summary

Executive summary

• Achieved record annual net income of SAR 19.7 billion in 2024, up 19% year-over-year, with Q4 net income rising 32% compared to Q4 2023, driven by strategic initiatives and improved economic conditions.

• Total assets grew 20.6% year-over-year to SAR 974 billion, supported by strong expansion in financing and investment portfolios.

• Operating income for 2024 reached SAR 32.1 billion, a 16.4% increase year-over-year, supported by higher net yield and fee income.

• Maintained industry-leading returns with ROE at 21.1% and ROA at 2.3% for FY 2024.

• Strategy execution under 'Harmonize the Group 2026' focused on digital transformation, universal banking, and ESG, delivering across all KPIs.

Financial highlights

• Net financing portfolio grew 16.7% year-over-year to SAR 693 billion; total liabilities up 21.4% year-over-year.

• Net yield income grew 17%, non-yield income up 15%, and fees increased by 11% year-over-year.

• Cost-to-income ratio improved to 24.9%, a 240 bps improvement from FY 2023.

• NPL ratio at 0.76% with coverage at 159%; cost of risk at 0.32%, up from 0.25% in 2023.

• Total capital adequacy ratio at 20.2%, well above regulatory minimum.

Outlook and guidance

• 2025 guidance: high single-digit financing book growth, NIM expansion of 5–15 bps, cost-to-income ratio below 24.5%, ROE above 21%, cost of risk 0.30–0.40%, Tier 1 ratio at 19.5%.

• Macro outlook for Saudi remains positive, with GDP growth projected at 3.3% in 2025, driven by non-oil activities.

• Management expects healthy mortgage origination, continued focus on value over volume, and digital/ESG initiatives.