Al Rajhi Banking and Investment (1120) investor relations material

Executive summary

• Net income for Q1 2026 rose 14.3% year-on-year to SAR 6.8 billion after zakat, driven by strong net yield, fee income growth, and effective strategy execution amid a healthy economic environment.

• Total assets increased 3% year-on-year to SAR 1.05 trillion, with customer deposits up 3% and financing book up 4.3% year-on-year.

• Strategy 'Harmonize the Group' in its final year, focusing on retail cross-sell, SME growth, investment banking, and digital transformation.

• Operating efficiency maintained with a cost-to-income ratio of 23.3% and ROE at 22.9%.

• Asset quality remained robust, with NPL ratio at 0.77% and NPL coverage at 150%.

Financial highlights

• Operating income increased 14.4% year-on-year to SAR 10.5 billion, with net yield income up 18.4% and fee income up 16.8%.

• Non-yield income rose 1% year-on-year to SAR 2,124 million.

• Cost-to-income ratio at 23.3%; expenses rose 17.7% year-on-year.

• Net impairment charges rose 20.2% year-on-year, with cost of risk at 0.33%.

• Earnings per share increased 12.5% year-on-year to SAR 1.59.

Outlook and guidance

• NIM guidance upgraded to 30–40 bps expansion for 2026; Tier 1 capital guidance above 21%.

• No expected rate changes for the remainder of 2026; cost of risk guidance maintained at 30–40 bps.

• Cost-to-income ratio targeted below 23.0%, and ROE above 23.5%.

• Focus remains on executing strategy pillars, diversifying income streams, and maintaining strong asset quality.

• Interest rates expected to remain stable in 2026, with positive NIM outlook supported by fixed-rate book.