The decision of the Saudi “Al-Rajhi” Bank to increase its capital by 15 billion riyals ($4 billion), or by 60 percent to 40 billion riyals (about $10.6 billion) instead of 25 billion, puts the bank in second place as the largest bank in the Saudi banking sector. In terms of capital assets, it now places second after the National Bank of Saudi Arabia.
This is the second increase in the bank’s capital since the beginning of 2019 when it raised its capital from 16.25 billion riyals to 25 billion riyals.
How will the capital be increased?
Al-Rajhi’s board of directors placed a recommendation to the extraordinary general assembly to increase the bank’s capital via a grant of 60 percent bonus shares, equivalent to 3 shares for every 5 shares owned by the bank’s shareholders.
The grant is conditional on obtaining the approval of the official authorities and the extraordinary general assembly on the increase in the capital and the number of shares granted.
When approved, Al-Rajhi will become the second-largest Saudi bank in terms of capital after the National Bank of Saudi Arabia, with a total of 44.78 billion riyals. Upon this approval, the bank will replace Riyadh Bank, which currently occupies second place with a capital of 30 billion riyals.
The financial results of Al-Rajhi Bank showed an increase in its net profits by 39.16 percent after zakat and tax, to 14.7 billion riyals in 2021, compared to 10.6 billion riyals in 2020.
The Chairman of the Board of Directors of “Al-Rajhi Bank” Abdullah Al-Rajhi said that the increase in the bank’s capital will contribute to supporting the bank’s strategic and expansion plans geared to financing and investment portfolios.
It will contribute to supporting the national economy and the projects of the Kingdom’s Vision 2030 by continuing to provide financial and financing solutions to the bank’s clients, individuals, and companies, as well as small enterprises. and medium-sized companies, in addition to participating in capital market activities, he added.
He explained that the capital increase is the culmination of results the bank continues to achieve at all levels and the confidence of local and international investors in the bank.
The bank, a leader in digital banking, also aims to strengthen it’s capital base and financial solvency.