Latest news with #BankAljazira
Zawya
26-05-2025
- Business
- Zawya
Saudi-listed 2P expands, renews $20mln Islamic credit facility
Perfect Presentation for Commercial Services Company (2P) has renewed and expanded its Shariah-compliant facility with Saudi National Bank. The 73.6 million Saudi riyal ($19.62 million) facility will be used to support newly awarded projects through letters of guarantee, letters of credit and invoice financing. The facility has been extended until May 30, 2026, and is secured by promissory notes covering the entire facility amount. In April, 2P raised and renewed a facility agreement valued at SAR 150 million with Bank Aljazira.
Zawya
01-05-2025
- Business
- Zawya
Bank Aljazira posts 20% higher net profits in Q1-25
Riyadh – Bank Aljazira generated net profits after Zakat and tax worth SAR 361 million in the first quarter (Q1) of 2025, an annual rise of 20.17% from SAR 300.40 million. The clients' deposits hit SAR 109.64 billion in the first three months (3M) of 2025, up 15.79% from SAR 97.26 billion a year earlier, according to the financial results. Earnings per share (EPS) grew to SAR 0.28 as of 31 March 2025 from SAR 0.23 in Q1-24. Total assets increased by 12.76% year-on-year (YoY) to SAR 153.15 billion in Q1-25 from SAR 135.82 billion. Meanwhile, the investments rose by 8.06% to SAR 36.71 billion from SAR 33.97 billion. Quarter-on-quarter (QoQ), the Q1-25 net profits hiked by 28.83% from SAR 280.20 million in Q4-24. At the end of December 2024, the lender's net profits jumped by 20.69% to SAR 1.23 billion from SAR 1.02 billion in 2023. Source: Mubasher
Zawya
27-03-2025
- Business
- Zawya
Saudi CMA approves Bank Aljazira, Yaqeen Capital's capital raise
Riyadh – The Capital Market Authority (CMA) approved the capital hike requests of Bank Aljazira and Yaqeen Capital Company on 25 March 2025, according to bourse statements. Bank Aljazira will raise its capital to SAR 12.81 billion from SAR 10.25 billion by issuing one bonus share for every four owned shares. The Saudi lender will transfer SAR 1.28 billion from the statutory reserve account and SAR 1.28 billion from the retained earnings account to implement the transaction. Accordingly, the bank's shares will stand at 1.28 billion shares, compared to 1.02 billion shares. Meanwhile, Yaqeen Capital obtained the CMA's nod for a 70% capital increase to SAR 255 million from SAR 150 million. Source: Mubasher
Arab News
12-03-2025
- Business
- Arab News
Saudi banks see profit surge in Q4 as rate cuts boost margins: Fitch Ratings
RIYADH: Saudi banks recorded a net income of SR21.5 billion ($5.7 billion) in the fourth quarter of 2024, up from SR20 billion in the previous three-month period, according to Fitch Ratings. The improvement was primarily driven by interest rate cuts, which enhanced net margins, alongside strong lending growth expected to outpace Gulf peers in 2025. Fitch Ratings' outlook aligns with S&P Global's January projection that banks in the Kingdom will sustain stable profitability in 2025 as higher lending volumes offset lower margins while continuing to tap international capital markets for growth related to the country's Vision 2030. The agency estimated the average net interest margin for Saudi banks increased to 3.2 percent in the last quarter of 2024 from 3.1 percent in the first nine months of the year. The improvement followed a 12-basis-point reduction in banks' cost of funding to 3.2 percent after the central bank lowered interest rates by 50 basis points. Meanwhile, the yield on average earning assets remained stable at 6.3 percent. 'Banks with higher levels of retail financing benefited most,' Fitch said. Al-Rajhi Bank and Bank Aljazira posted quarter-on-quarter NIM increases of 20 basis points to 3.4 percent and 2.3 percent, respectively. Saudi National Bank's NIM also improved, rising to 3 percent in the fourth quarter from 2.7 percent in the previous one. Strong annual performance Banks in the Kingdom reported a combined net profit of SR80 billion in 2024, up from SR70 billion in 2023, with the sector's average return on equity climbing to 15 percent from 14 percent. The rise in earnings was supported by robust growth and a lower cost of risk, which dropped to 30 basis points from 40 basis points a year earlier, reflecting a healthy operating environment. Lending activity remained strong, expanding by SR87 billion in the last quarter of 2024. Al-Rajhi Bank led the growth with an increase of SR44 billion, evenly split between its retail and corporate segments. Annually, gross financing at Saudi banks grew by an average of 14 percent, up from 11 percent in 2023. Saudi Awwal Bank, the Saudi Investment Bank, and Bank Aljazira recorded above-average growth. Fitch forecasted financial institutes in the Kingdom to 'continue outpacing Gulf peers in 2025,' with sector financing projected to rise by 12 percent, supported by further rate cuts and improved liquidity. Deposit trends and liquidity management Customer deposits at Saudi banks declined by SR35 billion in the last quarter — the first quarterly drop since 2019. Fitch attributed this to seasonal factors and expects deposits to rebound in the first three months of this year, as in previous years. In January, deposits increased by SR40 billion, according to data from the Saudi Central Bank. SNB experienced the largest deposit outflow in the fourth quarter, with its balance declining by SR54 billion, including an SR30 billion drop in current and savings deposits. They accounted for 72 percent of SNB's total deposit base. To offset the decline, the bank utilized repo facilities and money market deposits, leading to an increase in its Fitch-calculated loans-to-deposits ratio to 115 percent by year-end, compared to a sector average of 105 percent. The bank's regulatory loans-to-deposits ratio remained at 84 percent. Stable external liabilities and asset quality Saudi banks' external liabilities remained steady at around SR0.4 trillion at the end of the fourth quarter, representing 11 percent of total sector funding. 'We expect Saudi banks to gradually increase their reliance on external funding, especially if corporate borrowers continue to demand foreign-currency financing, but net foreign assets will remain below 2 percent in 2025,' the agency said. The sector's impaired financing balance decreased by SR2 billion in the last three months of 2024, contributing to a decline in the impaired financing ratio to 1.4 percent from 1.7 percent at the end of 2023. Provision coverage of impaired financing remained strong at 114 percent by year-end, and Fitch expected Saudi banks' asset quality metrics to remain robust in 2025. Capital adequacy and sector outlook The sector's Common Equity Tier 1 ratio decreased by 80 basis points to 15.7 percent in 2024 due to growth and dividend distributions. However, the Tier 1 and total capital adequacy ratio declines were more moderate, at 30-40 basis points, as banks issued Additional Tier 1 and subordinated debt.
Zawya
11-03-2025
- Business
- Zawya
Saudi bank earnings aided by lower interest rates, despite liquidity tightening
Net income at banks in Saudi Arabia improved to SAR21.5 billion in 4Q24, compared to SAR20 billion in 3Q24, as interest rate cuts helped boost net interest margins (NIMs), Fitch Ratings says. Lending growth remained strong, and we expect it to continue outpacing Gulf peers' in 2025. Fitch estimates that the sector average NIM (calculated as net interest income/average earning assets) for Saudi banks rose to 3.2% in 4Q24 (9M24: 3.1%), as banks' cost of funding reduced by 12bp (to 3.2%) after the central bank cut interest rates by 50bp in 4Q24. The average earning assets yield remained stable at 6.3%. Banks with higher levels of retail financing benefitted most, reflected by the NIMs of Al Rajhi Bank and Bank Aljazira improving by 20bp quarter on quarter (to 3.4% and 2.3%, respectively), while Saudi National Bank's (SNB) NIM was 3% in 4Q24, up from 2.7% in 3Q24. Saudi banks' combined net profit was SAR80 billion in 2024, up from SAR70 billion in 2023, with the sector average return on equity improving to 15% (2023: 14%). The rise in earnings was driven by fast growth and a lower cost of risk (2024: 30bp; 2023: 40bp), both underpinned by the healthy operating environment. Lending expanded by SAR87 billion (3.1%) in 4Q24. Al Rajhi Bank had the strongest growth of SAR44 billion (6.7%), with equal contributions from its retail and corporate segments. Annual growth of gross financing at Saudi banks averaged 14% in 2024 (up from 11% in 2023), with three banks reporting considerably higher levels: Saudi Awwal Bank (20%), The Saudi Investment Bank (22%) and Bank Aljazira (19%). We expect Saudi banks to continue growing faster than their peers from other Gulf countries in 2025, forecasting sector financing to increase by 12%. Further interest rate cuts and stronger liquidity conditions should underpin banks' growth appetite. The customer deposits balance of Saudi banks reduced by SAR35 billion in 4Q24, marking the first quarter since 2019 when deposits declined. However, this has a seasonal component, and we expect a stronger performance in 1Q25, as occurred in 1Q23 and 1Q24. Deposits grew by SAR40 billion in January 2025, according to the Saudi Central Bank. SNB had the largest outflow of customer deposits in 4Q24, with its balance dropping by SAR54 billion. This included a SAR30 billion decrease in current and savings deposits, although these remain a still-high 72% of total deposits. SNB mitigated the outflow with repo facilities (SAR12 billion increase) and money market deposits (SAR11 billion increase), and its Fitch-calculated loans/deposits ratio grew to 115% at end-2024 (sector average: 105%). SNB's regulatory loans/deposits ratio remained comfortable at 84%. Saudi banks' external liabilities remained stable at around SAR0.4 trillion at end-4Q24 (about 11% of total sector funding). Net foreign assets fluctuated around 0.5% of total sector assets. We expect Saudi banks to gradually increase their reliance on external funding, especially if corporate borrowers continue to demand foreign-currency financing, but net foreign assets will remain below 2% in 2025. The combined impaired financing balance reduced by SAR2 billion in 4Q24 (by SAR1.5 billion since end-2023), and the underlying ratio declined to 1.4% at end-2024 (end-2023: 1.7%). Total provision coverage of impaired financing remains healthy (end-2024: 114%). We expect Saudi banks' asset-quality metrics to remain strong in 2025. The sector's common equity Tier 1 ratio declined by 80bp in 2024 (to 15.7%) due to growth and dividend payments, while declines in the Tier 1 and total capital adequacy ratios were lower at 30bp–40bp due to Additional Tier 1 and sub-debt issuances. -Ends- Media Contact Matt Pearson Senior Associate, Corporate Communications Fitch Group, 30 North Colonnade, London, E14 5GN E:
