aljazira bank (1020) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 rose 20% year-over-year to SAR 361 million, driven by strong operating income, margin expansion, and improved fee income.

• Strategic focus on digital transformation, segment growth, product expansion, and enhanced customer experience, including digital platform enhancements and new SME account launches.

• ESG initiatives advanced, with significant green financing, resource optimization, and recognition for governance and workplace excellence.

• SAR 1 billion Tier 1 sukuk issued in January 2025, strengthening capital structure.

• Total assets as of March 31, 2025, reached SAR 153.2 billion, up 13% year-over-year.

Financial highlights

• Operating income grew 21% year-over-year to SAR 1,079 million, with net financing and investment income up 22%.

• Customer deposits rose 13% year-over-year to SAR 109.6 billion.

• Cost-to-income ratio improved to 52.4% from 56.0% in FY 2024.

• Fee and other income increased 21% year-over-year, mainly from banking services and exchange income.

• EPS for Q1 2025 was SAR 0.28, up from SAR 0.23 in Q1 2024.

Outlook and guidance

• 2025 guidance unchanged: targeting lower teens financing growth, NIM expansion of 5-10bps, cost-to-income below 55%, cost of risk 0.35-0.40%, and ROAE above 8%.

• Saudi economic outlook remains positive, with real GDP expected to grow 3.0% in 2025 and 3.7% in 2026, and non-oil GDP projected to rise 3.1% in 2025.

• Bank is positioned to benefit from expected interest rate cuts and ongoing strategic execution.