Are Saudi banks tending to raise their capital during the coming period?
The director of the Zad Consulting Center, Hussein Al-Raqeeb, said that banks in the Saudi market need to increase their capital, especially Al-Rajhi Bank.
Al-Raqeeb added, in an interview with Al-Arabiya, that Al-Rajhi Bank is the highest bank in terms of loan portfolio at 558 billion riyals, while the National Bank comes second with loans of 536 billion riyals.
He pointed out that the National Bank raised its capital to 60 billion riyals, while Al-Rajhi is supposed to raise its capital in order to comply with Basel 3 standards.
The sergeant said that the majority of the loan portfolio in Al-Rajhi Bank, at a rate of 70%, is granted in favor of individuals, and therefore according to Basel 3 standards, individual loans are calculated at 100%.
He explained that “Al-Rajhi” is required to comply with these standards in order to continue increasing its lending portfolio, by raising its capital.
Al-Raqeeb continued: “Al-Rajhi Bank balanced between the two matters, as it increased its capital in the first half of the previous year by 15 billion riyals, then followed it with distributions in the second half.”
He expected Al Rajhi Bank to increase its capital in the second half of 2023.
The sergeant revealed that after recommending cash dividends of 5 billion riyals for the year 2022, Al Rajhi Bank will have 10 billion riyals in retained profits, with the exception of profits for the fourth quarter of 2022, which may reach 4 billion riyals.
