CEO’s Message

A year of outstanding strategic achievement

During 2024, alinma reached several significant milestones and continued to deliver exceptional results for customers, shareholders, employees, and the communities we serve.

Building on our long history of innovation, trust, and excellence, we remained agile and responsive to a dynamic economy and rapidly changing financial services sector. Throughout 2024, we continued to demonstrate strategic focus and disciplined execution that has become our hallmark. At the outset of our five-year strategy in 2020, we set clear targets to improve our financial metrics, expand our market presence, and elevate our engagement with customers.

Our ambition was to become a leader in an increasingly competitive banking environment, and to leverage our advantages and achievements in innovation and embracing digital transformation to stay ahead of the curve. By the end of 2024, most objectives were met and, in many instances, we substantially surpassed our original goals. Indeed, nearly all Strategy 2025 financial metrics were met a full year ahead of schedule, thanks to our strategic focus and disciplined execution.

Over the past four years, all financial key performance indicators (KPIs) improved, reflecting a methodical approach to leveraging our resources, identifying new opportunities, and growing into new areas. Our return on equity (ROE) more than doubled over the past four years, reflecting improved profitability and our key priority of delivering increased and sustainable value to our shareholders.

Key to our success has been executive leadership’s focus to Strategy 2025, with monthly progress reviews ensuring close monitoring of each of the 86 strategic initiatives that we have continually refined and expanded upon since the strategy’s inception, most of which were completed by the end of 2024, thanks to management and team commitment.

In the past 12 months, our expanded customer-centric focus yielded measurable outcomes in our retail and corporate businesses, with new and emerging opportunities across various demographics and business segments enhancing our product offerings and advanced our performance.

On the retail front, we launched a dedicated, youth-focused banking app, iz, in recognition of the rapidly growing prominence of younger Saudi consumers. The development and introduction of this app reflects our broader aspiration to identify untapped markets, harness cutting-edge technology, and craft tailored solutions that simplify our customers’ everyday banking activities. iz resonated strongly with the younger generation, illustrating alinma’s close alignment with Saudi Arabia’s evolving demographics. Notably, the iz app has attracted more than 100,000 new to bank clients in under a year, demonstrating the app’s significant impact and effectiveness in expanding our customer base.

Strong financial performance and value creation

In 2024, alinma delivered a net income of % 5,832 million, a solid 21% increase over 2023. A primary driver of this was the 17% expansion in the Bank’s financing portfolio to % 202,308 million.

Retail and corporate financing made strong contributions, with retail financing expanding by 17% and corporate financing increasing by 15%, that was complimented by customer deposits increasing by 12% mainly driven by a significant CASA growth of 20%, derived from heavy focus in customer acquisition and continuous cross selling activities.

Total operating income increased by 12% to % 10,940 million, driven by a 13% rise in funded income and 11% increase in non-funded income. This resulted in net income after zakat of % 5,832 million, a year-on-year increase of 21%, derived from a combination of better performance and improved operational efficiency.

Operating expenses grew by 11%, while cost-to-income ratio declined to 30.9%, compared to 31.3% in 2023, and well below the 36% at the end of 2020.

Total assets grew 17% to % 276,827 million, supported by a 17% increase in financing growth and a 12% rise in investments. Customer deposits advanced 12% to % 210,545 million, with CASA deposits making up 51.6% of the total, and time deposits comprising 48.4%. Meanwhile, total equity grew by 21%, mainly driven the successful issuance the Tier 1 Sukuk of USD 1 billion combined with internally generated capital. Gross funded income reached % 16,155 million for the year, up 22% over 2023, following a 22% increase in investment income and a 22% improvement in financing income. Non-funded income also rose, increasing by 11% to % 2,291 million, from improved fees from banking services and investment gains/ dividends. Fund management fees formed the largest proportion of banking service fees at 35%, followed by card services at 21%, other fees at 20%, trade finance at 13%, and brokerage fees at 11%.

alinma maintained its market leading profitability metrics in 2024, with a return on assets of 2.27% representing a gain of six basis points, and a return on equity of 18.80% up from 17.22% in 2023. This impressive performance positioned alinma as market leading in Saudi Arabia.

Asset quality continued to advance, with improvements in both NPL and NPL coverage ratios, while a decline in the impairment charge reduced our cost of risk. Our capital adequacy was further strengthened, and other key metrics, such as NSFR, LDR and the liquidity coverage ratio underscored our consistently prudent financial management.

As previously noted, alinma’s USD 1 billion Tier 1 Sukuk issuance was a major achievement in 2024, demonstrating the Bank’s financial strength and exceptional reputation among investors. We secured this capital at an attractive rate, further bolstering our balance sheet and creating an even more powerful platform for future projects.

Retail Banking transformation through digital evolution

The transformation of our Retail Banking Group (RBG) under Strategy 2025 was expertly executed thanks to advanced and innovative digital technologies. The success of our strategy was also evident in the improvement of our net promoter score (NPS) from 67 to 72, the second highest score in Saudi Arabia’s banking industry.

RBG’s strong momentum in 2024 resulted in a 17% increase in the gross financing portfolio, with strong performances from auto financing, and a healthy expansion in home financing. This growth was driven by our strategic focus on enhancing the customer journey.

As a result of this approach, RBG has become a key player in home and personal financing. We were particularly pleased with the consumer response to our participation at Cityscape Global 2024, where over the course of the four-day event, sales volume was exceptionally high, validating alinma’s reputation as the Bank of Choice for home financing.

Overall, RBG’s 2024 key performance indicator results exceeded expectations. Innovations in physical branches and advancements in digital technology, helped enhancing alinma’s NPS in 2024, underscoring our significant strides in delivering customer satisfaction. We grew our physical footprint by expanding our branch network from 108 in 2023 to 115 locations in 2024, while also completing the migration to mixed-gender branches.

Excellence in Corporate, SME and Treasury growth

2024 was a year of remarkable highlights for alinma’s Corporate Banking Group (CBG), with assets reaching % 155.6 billion, representing 76% of the Bank’s assets and 29% of operating income. We participated in major project finance deals, including a variety of sustainable projects that exemplify the Kingdom’s push towards a more sustainable economy.

Efficiency, profitability, and customer satisfaction have all been substantially enhanced by the introduction of electronic credit loan origination (eCLO) and an automated credit write-up system.

In support of Vision 2030, CBG also expanded financing projects in tourism, healthcare, renewables, and infrastructure, which generated stable revenue, diversified the Bank’s portfolio, and strengthened our relationships with government entities and top corporates.

An important development was the introduction of a dedicated corporate customer support team, which had a dramatic impact on turnaround times and our Net Promoter Score, and freed relationship managers for business development activities.

Our consistent emphasis on increasing our financing activities for SMEs and mid corporates resulted in a significant 39% and 60% increase respectively in 2024, playing a central role in empowering Saudi Arabia’s entrepreneurial sector. Fee-based income also saw a notable increase, attributed to the successful centralization of cash management activities and enhanced cross-selling efforts, which enabled the Bank to capitalize on existing customer relationships.

In the year under review, we further expanded our global transaction banking operations with a digital e-trade portal, liquidity management system, and tailored liability solutions. These strengthened the Bank’s deposit base and enhanced customer engagement.

Our Treasury Group further cemented 2024 as a banner year, expertly navigating global economic volatility and the ongoing impact of unprecedented challenges related to monetary policy.

Technology and innovation – catalysts for customer satisfaction

At alinma, we recognize the valuable role played by digital transformation and innovation in bringing us closer to our customers and improving overall efficiency. In 2024 this resulted in enhanced customer centricity, and the leveraging of artificial intelligence and enhanced open banking integrations, which opened new business opportunities.

The Bank’s digital KPI success across 2024 painted a picture of robust growth and customer adoption. Digital onboarding increased significantly, with 86% of all new customer acquisitions occurring via our digital channels. Revenue from digital fees increased by 23%, while financial transactions through digital platforms grew 25%. Overall, digital channels accounted for 11% of all financing, showcasing the growing preference for digital banking services among alinma’s customers.

The adoption of efficiency-enhancing technology and process refinements led to a dramatic reduction in home financing turnaround times, which decreased from one month to under seven days, improving the customer experience substantially. This achievement is a powerful demonstration of alinma’s ability to harness innovation for our customers, whether they are purchasing a home, obtaining personal financing, or transacting on our app.

Our digital-first approach

Since launching our formal digital strategy in 2021, we have made steady progress in embedding digital thinking across the entire organization; and thanks to our Digital Factory unit and well-articulated strategy, we possess robust data capabilities, as well as strong external partnerships that, together, continue to deliver next generation banking solutions.

By embracing artificial intelligence and expanding our open banking ecosystem, we have taken major steps towards creating a modern, technology-enabled platform that integrates seamlessly with customer needs. In 2024, we launched new digital platforms for our corporate customers, introduced a Banking-as-a-Service (BaaS) platform, and expanded the capabilities of our widely acclaimed app, bringing an ever-greater range of financial products and services under one convenient digital umbrella.

The Bank also made several critical enhancements in 2024 to cybersecurity measures. We updated our Customer Data Privacy Policy in recognition of our proactive approach to mitigating risk and preserving stakeholder trust as our reliance on digital technologies grows.

2025 and beyond

Looking to the future, we are committed to growth and are positioned to pivot, when necessary, to ensure that alinma continues to deliver best-in-class services and returns.

In the coming year, we intend to launch new digital solutions for the MSME segment, recognizing the sector’s critical role in generating employment and diversifying the economy.

These targets reflect not just a belief in the value of technology, but our conviction that digital channels must offer a convenient experience that captures the minds and needs of our customers.

We will also continue innovating our card products to give customers the freedom to customize elements of their financial instruments to suit their lifestyles. We anticipate that gamification will enhance user engagement; accordingly, we intend to incorporate interactive features that reward customers for healthy financial habits and loyalty.

We will further develop our Banking-as-a Service offerings, integrating with a broad array of third-party providers to enrich our open banking ecosystem. This expansion will provide customers with more choices, and it will catalyze innovation by inviting partners to build on our core infrastructure.

We intend to replicate our successful approach in the retail space by providing equally competitive and user-friendly digital solutions in business banking. This will offer companies of all sizes the tools they need to conduct business seamlessly, manage their finances responsibly, and participate in the Kingdom’s visionary economic transformation.

Acknowledgements

On behalf of my executive team and all our employees, I extend our most sincere gratitude to the Custodian of the Two Holy Mosques, King Salman Bin Abdulaziz Al Saud, and the Crown Prince and Prime Minister, HRH Mohammed Bin Salman Bin Abdulaziz Al Saud. The unwavering commitment of our leaders and our government to the prosperity of our nation and its people continues to shape an enabling environment.

Our regulators, the Saudi Central Bank (SAMA), the Capital Market Authority (CMA), and all other relevant parties, offered exceptional oversight of our rapidly evolving industry. We are grateful for their guidance and management.

Our successes to date and those we anticipate in the future are supported by the Kingdom’s ambitious 2030 vision that has created an enduring partnership opportunity to foster financial inclusion, champion local entrepreneurship, and scale sustainable initiatives that will help secure a bright future for generations to come.

alinma’s Board of Directors once again played an invaluable role, sharing wise counsel and insights. I am deeply grateful for my executive team and all alinma employees for their tireless efforts in delivering for our customers and our shareholders, whose trust forms the bedrock of our success. We thank them for their loyalty and support.

alinma remains committed to being a trusted partner and financial innovator for individuals, businesses, and communities across Saudi Arabia, generating value for our investors and for the nation.