Al Rajhi Banking and Investment (1120) investor relations material

Executive summary

• Net income after Zakat for H1 2026 rose 14.2% year-over-year to SAR 13.8 billion, driven by higher yields, fee income, and FX gains, with robust execution of the Harmonize the Group strategy.

• Total assets reached SAR 1.06 trillion, up 1.8% year-over-year; customer base expanded to 22 million with high satisfaction (NPS 78%).

• Share capital increased to SAR 60 billion following a bonus share issue in April 2026.

• Maintained industry-leading returns and solid capital adequacy, with a focus on ESG and sustainable finance initiatives.

• Retail cross-sell, SME lending, and investment banking drove growth; digital transformation advanced with a 96:4 digital/manual ratio and 100% cloud-ready applications.

Financial highlights

• Net income for Q2 exceeded SAR 7 billion, up 14% year-over-year and 4% sequentially; operating income for H1 reached SAR 21.41 billion, up 13.9%.

• Net yield income grew 16%, non-yield income up 7% year-over-year; fee income rose 17% year-over-year, driven by payments, trade, cash management, and investment banking.

• Total financing book at SAR 762 billion, up 2.7% year-over-year; SME lending up 46.7% year-over-year, now 24% of non-retail book.

• Customer deposits at SAR 688.36 billion, up 3.6% year-over-year; CASA ratio at 64.2%.

• Cost-to-income ratio at 22.7% for H1, up 20 bps year-over-year; OpEx for H1 at SAR 4.8 billion, up 14.7%.

• NPL ratio at 0.74%, coverage at 153%; cost of risk at 0.39%, up due to ECL model update and sector overlays.

Outlook and guidance

• Loan growth guidance revised to low single digits, reflecting securitization and focus on value over volume; FY 2026 guidance maintained for NPM expansion and ROE above 23.5%.

• Cost of risk guidance updated to 35–45 bps, slightly higher than previous; no other major changes to guidance.

• Management expects no material NIM impact from potential rate hikes in H2 2026; focus remains on optimizing funding and asset mix.

• The bank is assessing the impact of IFRS 18, with no significant effect expected on performance but changes anticipated in financial statement presentation.

• New three-year strategy to be announced in 2027.