aljazira bank (1020) Q2 2024 earnings summary

Executive summary

• Net income for 1H 2024 rose 33% year-over-year to SAR 618 million, driven by higher operating income, asset expansion, and strategic transformation initiatives including digitalization and SME focus.

• Total assets increased to SAR 138.0 billion as of 30 June 2024, up 7% YTD, with financing portfolio and customer deposits also rising.

• Share capital was raised from SAR 8.2 billion to SAR 10.25 billion via bonus shares in Q2 2024.

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

Financial highlights

• Operating income for H1 2024 reached SAR 1.79 billion, up 13% YoY, with net financing and investment income at SAR 1.25 billion and fee and other income up 16% YoY.

• Net income rose 33% YoY to SAR 618 million; EPS for H1 2024 was SAR 0.51, up 22% YoY.

• Customer deposits increased 5% YTD to SAR 98.6 billion, with CASA share at 41.3%.

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

• Net financing (loans) increased to SAR 87.21 billion from SAR 74.94 billion YoY.

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%.

• Management continues to monitor capital adequacy and regulatory compliance under Basel IV.