Description
SWOT ANALYSIS OF AL RAJHI BANK
Al Rajhi Bank Parent Company Category Sector Tagline/ Slogan Al Rajhi Bank Regional Banks Banking and Financial Services Local vision, international expertise Saudi Arabia’s largest sharia-compliant banking group offering sharia-compliant products STP Retail banking, corporate banking, treasury banking and investment and brokerage services Individuals, Small, medium & large enterprise looking for diverse financial solutions Saudi Arabia’s largest sharia-compliant banking group, instrumental in bridging the gap between modern financial demands and intrinsic values SWOT Analysis 1. It is one of the largest Islamic Bank of the World with total asset of USD 60 Billion 2. Al Rajhi is one of best-known family businesses with nearly 600 branches across the oil-rich kingdom, a sixth of which are dedicated to female customers in the gender-segregated society 3. The bank has also expanded into Malaysia, the world’s Islamic finance hub, as well as Kuwait and Jordan 4. It won the Asian banker of the year for Retail and Corporate Banking Strength 5. It has the largest retail network and occupies nearly half of the retail sector’s profits and has over 7500 employees
USP
Segment
Target Group
Positioning
6. The bank’s cheap cost of funds, which is a consequence of its large interest-free deposit base, has given it a place among the most attractive Saudi stocks 1. The bank had been accused of being involved in funding illegal activities by a US Senate committee, thrashing its reputation 2. Rapid credit growth exerted excessive pressure on Al Rajhi's capital position 3. Given the limited use of variable components in compensation, costs tend to be sticky and of low flexibility across the cycle 1. Strong net profit growth on the back of a surging economy, fuelled by high oil prices, which has boosted lending, deposits and deal activity 2. Bank sector lending to private companies in Saudi Arabia still grew at a rate of 15 percent year-on-year 3. Increased retail lending can be a key driver of the Al Rajhi's overall loan growth Opportunity 4. International expansion likely to bolster revenues, the bank should try to expand its presence in overseas markets 1. In the past quarters, the competition has increased significantly from both Islamic and conventional players 2. If the bank's reputation were to be damaged on account of allegations made by US Senate, it can lower down its ratings 3. The lending environment in Saudi Arabia intensely competitive between a small number of local banks, and means that while banks will be able to book new assets, margins will be tight Competition 1. The Saudi British Bank 2. Saudi Hollandi Bank 3. Riyad Bank Competitors 4. Arab National Bank
Weakness
Threats
doc_770650369.docx
SWOT ANALYSIS OF AL RAJHI BANK
Al Rajhi Bank Parent Company Category Sector Tagline/ Slogan Al Rajhi Bank Regional Banks Banking and Financial Services Local vision, international expertise Saudi Arabia’s largest sharia-compliant banking group offering sharia-compliant products STP Retail banking, corporate banking, treasury banking and investment and brokerage services Individuals, Small, medium & large enterprise looking for diverse financial solutions Saudi Arabia’s largest sharia-compliant banking group, instrumental in bridging the gap between modern financial demands and intrinsic values SWOT Analysis 1. It is one of the largest Islamic Bank of the World with total asset of USD 60 Billion 2. Al Rajhi is one of best-known family businesses with nearly 600 branches across the oil-rich kingdom, a sixth of which are dedicated to female customers in the gender-segregated society 3. The bank has also expanded into Malaysia, the world’s Islamic finance hub, as well as Kuwait and Jordan 4. It won the Asian banker of the year for Retail and Corporate Banking Strength 5. It has the largest retail network and occupies nearly half of the retail sector’s profits and has over 7500 employees
USP
Segment
Target Group
Positioning
6. The bank’s cheap cost of funds, which is a consequence of its large interest-free deposit base, has given it a place among the most attractive Saudi stocks 1. The bank had been accused of being involved in funding illegal activities by a US Senate committee, thrashing its reputation 2. Rapid credit growth exerted excessive pressure on Al Rajhi's capital position 3. Given the limited use of variable components in compensation, costs tend to be sticky and of low flexibility across the cycle 1. Strong net profit growth on the back of a surging economy, fuelled by high oil prices, which has boosted lending, deposits and deal activity 2. Bank sector lending to private companies in Saudi Arabia still grew at a rate of 15 percent year-on-year 3. Increased retail lending can be a key driver of the Al Rajhi's overall loan growth Opportunity 4. International expansion likely to bolster revenues, the bank should try to expand its presence in overseas markets 1. In the past quarters, the competition has increased significantly from both Islamic and conventional players 2. If the bank's reputation were to be damaged on account of allegations made by US Senate, it can lower down its ratings 3. The lending environment in Saudi Arabia intensely competitive between a small number of local banks, and means that while banks will be able to book new assets, margins will be tight Competition 1. The Saudi British Bank 2. Saudi Hollandi Bank 3. Riyad Bank Competitors 4. Arab National Bank
Weakness
Threats
doc_770650369.docx