Al Rajhi Banking and Investment (1120) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 reached a record SAR 5.91 billion, up 34.1% year-over-year, driven by strong growth in core banking activities, operating income, and digital transformation.

• Total assets surpassed SAR 1.02 trillion, growing 22.4% year-over-year and 5% year-to-date.

• Strategic focus on "Harmonize the Group," digitalization, and customer experience, with NPS at 85 and SME portfolio expansion.

• Maintained robust asset quality, capital adequacy, and industry-leading returns, with Tier 1 capital ratio at 19.8%.

• Earnings per share increased 34.7% year-over-year to SAR 1.41.

Financial highlights

• Operating income rose 27.3% year-over-year to SAR 9.2 billion; net financing and investment income up 25.7% year-over-year.

• Net financing portfolio grew 18.7% year-over-year to SAR 723 billion; investments up 25.1% year-over-year.

• Cost-to-income ratio improved to 22.7% from 26.2% year-over-year; operating expenses up 10.3%.

• Earnings per share reached SAR 1.41, up from SAR 1.05 year-over-year.

• Return on equity reached 23.1%, and return on assets was 2.36%.

Outlook and guidance

• FY 2025 guidance maintained: high single-digit financing growth, cost-to-income ratio below 23.5%, ROE above 22.5%, and Tier 1 ratio above 19.5%.

• Management expects continued growth in core banking revenues, stable asset quality, and strong capital and liquidity positions.

• Net profit margin expected to expand by 5–15 bps; cost of risk guided at 0.30–0.40%.

• Interest rates anticipated to trend downward in 2025, with NIM supported by fixed-rate book.

• Growth aligned with Saudi Vision 2030, targeting further asset and customer base expansion.