Biggest Saudi bank to double its capital

JEDDAH - Saudi Arabia's largest listed bank, Al-Rajhi Banking and Investment Corp. (ARABIC), said it plans to increase capital from SR2.25 billion to SR4.5 billion ($1.20 billion) by making a one-for-one scrip issue.

By From Our Correspondent

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Published: Thu 30 Dec 2004, 11:03 AM

Last updated: Thu 2 Apr 2015, 11:49 AM

This will take place through the granting of one free share for every owned share at a nominal values of SR50. The market value of the share is SR1, 881.

The move will double the number of the company shares from 45 million to 90 million if the granting of the new shares is approved by the general assembly expected to convene during the first quarter of next year, Arab News reported.

The bank said a transfer of funds from reserves would finance the issue. It will also distribute an SR35 dividend per share, it said in a statement posted on the Saudi stock market's website on Sunday.

Meanwhile, according to the Kuwait-based Global Investment House report, the assets of Al-Rajhi Bank grew from SR51.74 billion in 2001 to SR73.0 billion as of September 2004 and ranks fourth amongst Saudi commercial banks in terms of asset size with a 12.3 per cent market share of the sector's aggregate total assets. The bank's capitalisation ratios reported a marginal decline from 25.9 percent in 2002 to 24.4 percent in 2003. Shareholders' equity accounted for 11.2 percent of total assets in 2003 compared to 13 percent in 2001 and to a sector's average of 10.2 percent.

Al-Rajhi Bank's net income increased at a CAGR of 15 percent during the period 2001-2003. For the year 2003, Al-Rajhi Bank reported a net income of SR2.03 billion compared to SR1.41 billion for 2002 representing a large increase of 44.2 percent.

The bank's ROAA has increased to 3.3 percent in 2003 as compared to 2.5 percent in 2002. The bank's ROAA is above the sector's average ROAA for year 2003, which was 2.3 percent. The ROAE of Al-Rajhi also increased to 28.9 percent in 2003 from 20.8 percent in 2002. In 2003, the average ROAE for Saudi banks was 22.3 percent.

Al-Rajhi reported a net income of SR2.14 billion for the first nine months of this year, a strong increase of 46.9 percent as compared to the SR1.45 billion net incomes reported for the corresponding period in 2003.

The bank's shareholders equity increased from SR7.24 billion in 2003 to SR9.38 billion at the end of September. Assets amounted to SR73.0 billion representing a 12.9 percent increase over the 2003 year-end figure of SR64.67 billion.

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