aljazira bank (1020) Q2 2024 earnings summary

Executive summary

• Net income for 1H 2024 grew 33% YoY to SAR 618mn, with consolidated net income reported at SAR 700.9 million, reflecting strong profitability growth and improved operating performance.

• Strategic transformation advanced through digitalization, SME focus, and product diversification.

• ESG progress included reduced resource consumption, expanded community projects, and enhanced governance.

• Share capital increased from SAR 8.2bn to SAR 10.25bn via bonus shares, enhancing capital base.

Financial highlights

• Net income for 1H 2024 was SAR 700.9mn, more than double the prior year, with operating income up 11% YoY.

• Total assets grew to SAR 138bn, with net financing at SAR 87.2bn and customer deposits at SAR 98.6bn.

• Cost-to-income ratio improved to 55.8% in 1H 2024 from 58.9% in 1H 2023.

• Fee and other income rose 16% YoY, now over 30% of operating income.

• Basic and diluted EPS for six months were SAR 0.42, up from SAR 0.22 (adjusted for bonus shares).

Outlook and guidance

• FY 2024 financing growth expected in mid-teens, mainly from corporate segment.

• Net interest margin guidance revised to maintain FY 2023 level due to delayed rate cuts.

• Cost-to-income ratio targeted below 56%; Tier 1 ratio guidance revised to 16–16.5%.

• ROAE before zakat and tax expected to remain above 8%.

• New funds transfer pricing policy implemented in Q2 2024 to align with market rates.