Al Rajhi Banking and Investment (1120) Q4 2025 earnings summary

Executive summary

• Net income for 2025 reached SAR 24.8 billion, up 26% year-on-year, driven by strong operating income, improved yields, and robust execution of the Harmonize the Group strategy.

• Total assets grew 7.3% year-on-year to nearly SAR 1.04 trillion, with net financing up 8.6% and significant growth in corporate and SME lending.

• Strategy focused on expanding customer base, digital transformation, and ESG leadership, contributing to performance.

• Return on equity stood at 23.4% and return on assets at 2.4%, reflecting robust profitability.

• Board recommended a capital increase to SAR 60 billion via bonus shares and a cash dividend of SAR 1.75 per share for H2 2025.

Financial highlights

• Operating income rose 22% year-on-year to SAR 39.1 billion, with net yield income up 20% and non-yield income up 28%.

• Cost-to-income ratio improved to 23.3% from 24.9% year-on-year.

• NPL ratio stable at 0.75%, with coverage at 152.5%.

• Financing portfolio grew 8.6% year-on-year to SAR 753 billion.

• Earnings per share reached 5.85, up 25.3% year-on-year.

Outlook and guidance

• 2026 GDP growth expected at 4%-5%, mainly from non-oil sectors, with Saudi GDP projected to grow 4.5% in 2025 and 2026.

• Credit demand in 2026 anticipated to be slower than historical averages; financing book guidance is low to mid-single digit growth.

• NIM expected to expand by 25-35 basis points; cost-to-income ratio to remain below 23%; ROE to stay above 23.5%.

• No further AT1 issuance planned for 2026 beyond the recent $1 billion raised.

• Continued focus on digital transformation, financial innovation, and customer experience aligned with Saudi Vision 2030.