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1120

Governance: D

ALRAJHI

Al Rajhi Bank

66.60 SAR / Share

As of: May 28, 2026

10.7x P/E Ratio Trailing 12 Months

1.9x P/B Ratio Price to Book Value

3.3% Dividend Yield Annual Dividend / Share

266.40B SAR Market Cap Total Valuation

0.72 Beta Systematic Risk Index

63.5% Net Margin Net Profit / Revenue

The Story

Al Rajhi Bank is a dominant Shariah-compliant retail powerhouse characterized by high returns on equity, exceptional cost efficiency, and a massive consumer financing footprint.

Source: Annual 2025 (2026-04-29)

Value Creation +10.0% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

3.3%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+14.1%

Payout Ratio Percent of net profits distributed as dividends

35.6%

Net Margin Net profit margin generated from total operational revenue

63.5%

ROE Return on Equity

17.4%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

10.7x

P/B Ratio Market capitalization compared to corporate book value

1.9x

NIM Operating multiple reflecting core operational leverage

2.9%

Cost to Income Asset pricing multiple relative to total topline revenue

29.3%

Growth Story

Al Rajhi's growth is anchored by its massive net financing book, which reached SAR 752.8B in the TTM period, driven by a robust retail segment and an expanding corporate presence. Net Financing and Investment Income (NII) stood at SAR 29.8B, reflecting the bank's ability to deploy capital effectively within the Saudi economy. The bank's expansion is further supported by its digital payment channels and brokerage business, which contribute to a diversified income stream. With a sustainable growth rate of 14.14%, the bank demonstrates a high capacity to fund future expansion through retained earnings, supported by a healthy ROE of 17.39% and a strategic focus on organic business growth.

Profitability Dynamics

The bank maintains a highly efficient operation, evidenced by a cost-to-income ratio of 29.28%, which remains a benchmark for operational leverage in the region. This efficiency translates into a strong ROE of 17.39%, significantly exceeding its estimated cost of equity (Ke) of 7.45%, indicating substantial value creation for shareholders. While the Net Interest Margin (NIM) of 2.86% reflects the competitive landscape and the impact of funding costs, the bank's high Return on Assets (ROA) of 2.38% underscores its ability to generate profit from its SAR 1.04 trillion asset base. The bank's profitability is further bolstered by its low-cost funding structure and disciplined expense management.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.72

Cost of Equity Minimum required rate of return demanded by shareholders

7.4%

Loan-to-Deposit Ratio (LDR) Ratio of customer loans relative to deposited reserves

112.8%

CASA Ratio Demand deposit balances as a percentage of total reserves

0.1%

ECL Coverage Credit loss provisioning coverage relative to gross lending assets

0.0%

Capital Adequacy Ratio (CAR) Risk-weighted asset coverage capital backing ratio

—

Non-Performing Loans (NPL) Ratio Percent of gross lending assets classified as non-performing

—

Risk Factors

Al Rajhi exhibits a conservative risk profile with an NPL ratio of just 0.75% and a robust NPL coverage ratio of 152.49%, indicating strong asset quality and prudent provisioning. The bank's capital position is solid, with a Total Capital Adequacy Ratio of 21.85%, well above SAMA's regulatory minimums. However, the Loan-to-Deposit Ratio (LDR) of 112.81% suggests a reliance on non-deposit funding sources, such as debt securities and term financing, which grew to SAR 79.9B to support loan book expansion. Regulatory risks are managed through strict adherence to SAMA guidelines and Shariah compliance, while the planned disposal of Ejada Systems reflects a strategic focus on core banking and fintech integration.

Governance Disclosures

Rating: D

We track 15 key governance and oversight matters for this company in our database.

Significance: 4/10 Tunneling

Executive Management Short-Term Benefits

The bank paid SAR 211,191,000 in short-term benefits to executive management personnel in 2025, an increase from SAR 176,488,000 in 2024.

Mitigating Factors: Compensation policies are approved by the Board of Directors and designed to comply with SAMA regulations and Financial Stability Board standards.

Significance: 5/10 Entrenchment

Divestment Plan for Ejada Systems

The Board of Directors approved a plan to lose control over Ejada Systems Limited Company through private placements and an IPO. The bank has already disposed of a 10% stake via private placement, resulting in the recognition of non-controlling interests.

Mitigating Factors: The divestment is being conducted through formal regulatory channels, including an active program for an IPO.

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In-Depth Analysis