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4081

Governance: A

NAYIFAT

Nayifat Finance Co.

9.86 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

0.9x P/B Ratio Price to Book Value

8.4% Dividend Yield Annual Dividend / Share

1.17B SAR Market Cap Total Valuation

1.24 Beta Systematic Risk Index

-37.0% Net Margin Net Profit / Revenue

The Story

Nayifat Finance Company is navigating a challenging transition in fiscal 2025, marked by a significant net loss of SR 126.34 million driven by aggressive credit provisioning and model adjustments, despite maintaining a solid asset base of SR 2.16 billion.

Source: Annual 2025 (2026-04-20)

Value Creation -1.2% 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

8.4%

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

-37.8%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-37.0%

ROIC Return on Invested Capital

6.7%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

0.9x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

5.1x

Growth Story

Nayifat's growth trajectory has hit a temporary plateau, with total revenue declining from SR 396.96 million in FY 2023 to SR 365.48 million in FY 2024, and further to SR 341.21 million in the TTM period ending FY 2025. This contraction in top-line finance income reflects a more cautious lending environment and structured portfolio management. The company's long-term growth capacity is currently constrained, as evidenced by a negative five-year average reinvestment rate of -567.25% and a negative sustainable growth rate of -37.79%. Rather than aggressively expanding its balance sheet, Nayifat is focusing on consolidating its existing Islamic financing receivables, which stood at a net of SR 1.78 billion in FY 2025, down from SR 1.87 billion in FY 2024, prioritizing asset quality over raw volume expansion.

Profitability Dynamics

The profitability narrative in fiscal 2025 is dominated by a deliberate and massive balance sheet cleanup. Nayifat recorded an operating loss of SR 120.11 million and a net loss of SR 126.34 million, representing a sharp reversal from the net income of SR 131.24 million in FY 2024. This downturn was primarily driven by a management decision to reassess write-off points and apply risk-specific overlays, resulting in a net expected credit loss charge of SR 243.92 million, which includes a specific SR 179.99 million increase from model adjustments. Consequently, the operating margin plummeted to -35.20% and the profit margin to -37.03%. This structural shock has depressed the company's returns, with a five-year average ROIC of 6.66% falling short of its WACC of 7.84%, creating a negative value gap of -1.18%.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.24

Cost of Equity Minimum required rate of return demanded by shareholders

9.8%

WACC Weighted average cost of total debt and equity funding

7.8%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

71.4%

Risk Factors

Nayifat's risk profile is characterized by elevated credit risk and increased reliance on wholesale funding. The company's relevered beta of 1.24 reflects its sensitivity to macroeconomic shifts, while its cost of equity stands at 9.78%. To fund its operations, Nayifat has utilized SR 0.84 billion of its SR 1.79 billion long-term Islamic bank financing limits, with total debt rising to SR 836.56 million in FY 2025 from SR 475.90 million in FY 2024. A key structural risk is the assignment of SR 1.03 billion in Islamic financing receivables to local banks as collateral; because Nayifat retains the credit risk on these assigned assets, it remains fully liable in the event of customer defaults. Furthermore, the company's credit quality is highly sensitive to its core retail and SME segments, as highlighted by the write-off of SR 232.98 million in receivables during the year and an outstanding SR 370 million in written-off accounts still subject to legal enforcement.

Governance Disclosures

Rating: A

We track 6 key governance and oversight matters for this company in our database.

Significance: 5/10 Tunneling

Transactions and Balances with Associate of Major Shareholder

The Company transacted with Yaqeen Capital Company, an associate of its major shareholder Falcom Holding Company. Transactions in 2025 included commodities Waqala transactions of SR 505 thousand, treasury shares portfolio management fees of SR 73 thousand, and payments for the purchase of treasury shares of SR 43,374 thousand. Additionally, Yaqeen Capital held an outstanding advance of SR 35,847 thousand on behalf of the Company for commodity Tawarruq transactions.

Mitigating Factors: The outstanding balance is receivable on demand and transactions are conducted on mutually agreed terms.

Significance: 2/10 Tunneling

Consultancy Transactions with Board Member-Owned Entity

The Company paid Zakat and VAT consultancy fees of SR 357 thousand in 2025 and SR 300 thousand in 2024 to AlBayouk Chartered Accountant Office, which was owned by a member of the Board of Directors until November 3, 2025.

Mitigating Factors: Transactions are conducted in the ordinary course of activities on mutually agreed terms.

For more, click here to view the full governance profile →

In-Depth Analysis