Al Rajhi Bank Chairman rules out M&A, rebranding plans

Al Rajhi Bank Chairman Abdullah Al Rajhi

Al Rajhi Bank has no current plans to acquire Bank Aljazira or consolidate with Bank Albilad, Chairman Abdullah Al Rajhi said.

The bank did not initiate any talks in this regard, Al-Rajhi added in a TV show.

He also ruled out plans to rebrand the bank into “Masraf Al-Mostaqbal”.

On the other hand, Al Rajhi said higher interest rates during the current period are not favorable for the bank, which focuses on the retail sector and has a high percentage of fixed-rate retail loans. Meanwhile, Al Rajhi Bank gets short-term deposits, which are repriced in short intervals.

Al Rajhi Bank is a retail bank with 18 million corporate clientele, he added.

The merger of Saudi National Bank (formerly, National Commercial Bank) and Samba Financial Group had no impact on Al Rajhi Bank, the Chairman noted, affirming that the bank maintains its first position in the retail sector.

He added that Al Rajhi Bank came second by assets and retained this position post-merger.

Al Rajhi Bank is closely monitoring the market, along with other services, technologies or new laws that could impact it.

Elsewhere, Al Rajhi said the bank is not facing any liquidity crisis, elaborating the economic cycles sometimes witness a rise in loans, while others see deposit growth. However, the ratios are still healthy within the specified range. Banks are responsible for managing the ratios, along with the related risks and liquidity.

The loan-to-deposit ratio at Al Rajhi Bank stood at 89% by the end of November 2022.

Mortgage loans were a key driver for an over twofold increase in Al Rajhi Bank’s loan portfolio recently, backed by Vision 2030 that aims to increase home ownership percentage, the Chairman said, pointing to loan growth in other sectors.

He added that Saudi Arabia’s economic growth was very strong in 2022, thanks to the corporate sectors and other industries. Al Rajhi Bank will benefit from this growth in the long run to boost its market share.

Al Rajhi Bank works on consolidating its branches rather than closures. It did not announce any layoffs, as the total number of employees at the bank and its subsidiaries increased to 21,000 currently from 12,500 in 2019.

Meanwhile, Al Rajhi Bank’s acquisition of Ejada Systems Co. aims to leverage the company’s success, as the bank largely depends on technology and expects to continue this tendency in the future.

For More Mergers and Acquisitions