Who Owns Al Rajhi Bank Company?

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Who Owns Al Rajhi Bank?

Understanding Al Rajhi Bank's ownership is key to its strategy and influence. Its 1987 transformation into a joint-stock company broadened ownership, yet the founding family's influence remains substantial.

Founded in 1957 by the Al Rajhi family, the bank unified its operations in 1978. It has since grown into the world's largest Islamic bank by capital, serving millions of customers with a wide array of financial services.

Who owns Al Rajhi Bank?

The ownership of Al Rajhi Bank is primarily held by a combination of the founding Al Rajhi family, institutional investors, and the public through its listing on the Saudi Stock Exchange (Tadawul). While the founding family retains significant stakes, institutional investors and public shareholders also play a crucial role in its governance and direction. For a deeper dive into its market position, consider an Al Rajhi Bank Porter's Five Forces Analysis.

Al Rajhi Bank's origins trace back to 1957, founded by the four Al Rajhi brothers: Saleh, Sulaiman, Mohamed, and Abdullah. These brothers, recognized among Saudi Arabia's most affluent families, laid the groundwork for what would become a leading Islamic financial institution. Their early ventures in currency exchange and gold trading established a strong foundation for future banking operations.

Founding Vision

The Al Rajhi brothers envisioned a bank operating strictly according to Sharia principles. This commitment to Islamic finance has remained a core tenet of the bank's identity since its inception.

Early Consolidation

Initially operating as a group of individual banking and commercial entities, these operations were consolidated under the Al Rajhi Trading and Exchange Company in 1978. This marked a significant step towards formalizing their business structure.

Impact of Economic Growth

The 1970s oil boom and the subsequent influx of migrant workers significantly fueled the brothers' business growth. Their exchange services facilitated remittances, playing a crucial role in the financial lives of many.

Formalization as an Islamic Bank

In 1983, the brothers obtained approval to establish Saudi Arabia's first Islamic bank. This move formalized their adherence to Sharia-compliant practices, including the prohibition of interest, solidifying their unique market position.

Initial Ownership Structure

During its formative years, the Al Rajhi brothers held complete ownership and control of the burgeoning financial enterprise. While specific initial equity splits are not publicly documented, their collective leadership guided the bank's early development.

Pioneering Sharia Compliance

The establishment of the bank as an Islamic entity in 1983 was a landmark event. It underscored the founders' dedication to providing financial services that strictly adhere to Islamic law, setting a precedent for future Islamic banking initiatives.

The Al Rajhi brothers were the sole owners during the bank's foundational period. Their collective vision and business acumen were the driving forces behind its establishment and early success. The bank's subsequent growth strategy has been a key factor in its sustained market leadership.

Early Ownership and Development

The Al Rajhi brothers, Saleh, Sulaiman, Mohamed, and Abdullah, were the original founders and sole owners of the bank. Their early ventures in currency exchange and gold trading provided the capital and expertise to establish a formal banking institution.

• Founded in 1957 by the four Al Rajhi brothers.
• Saleh Al Rajhi initiated currency exchange operations in 1947.
• Operations consolidated under Al Rajhi Trading and Exchange Company in 1978.
• Secured permission to operate as Saudi Arabia's first Islamic bank in 1983.
• The Al Rajhi family is recognized as one of the wealthiest families in Saudi Arabia.

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Al Rajhi Bank's ownership structure has evolved significantly since its establishment. The transition to a joint-stock company in 1987 marked a pivotal moment, leading to its rebranding and subsequent public trading on the Saudi Arabian Stock Exchange (Tadawul). This transformation has shaped who owns Al Rajhi Bank today.

While approximately 75% of Al Rajhi Bank's shares are publicly owned and traded on the Tadawul, the Al Rajhi family continues to be the bank's largest shareholders. Sulaiman Al Rajhi, one of the co-founders, holds the most significant individual stake within the family. Although precise percentages for individual family members' holdings are not consistently disclosed, their collective ownership is substantial, influencing the bank's direction. The bank's financial health, as indicated by its total shareholders' equity reaching SAR 123 billion in 2024, a 15% increase from SAR 107 billion in 2023, and total assets growing to SAR 974 billion (a 21% increase), is a key factor for all Al Rajhi Bank shareholders, including institutional investors. The bank's net income for 2024 also saw a record high, increasing by 18.7% to $5.3 billion, underscoring its strong performance. Understanding these financial metrics is crucial for assessing the value and stability of Al Rajhi Bank ownership.

Key Ownership Aspects of Al Rajhi Bank

Al Rajhi Bank's ownership structure is a blend of family control and public investment. The family's influence remains significant despite a large public float.

• Al Rajhi family is the largest shareholder group.
• Approximately 75% of shares are publicly owned.
• Sulaiman Al Rajhi holds the largest individual stake among family members.
• The bank is traded on the Saudi Arabian Stock Exchange (Tadawul).
• Financial performance, like the 2024 net income of $5.3 billion, impacts shareholder value.

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As of 2024, the Board of Directors at Al Rajhi Bank is instrumental in guiding the institution's strategic path and governance. Abdullah bin Sulaiman Al Rajhi holds the position of Chairman, with Waleed A. Al-Mogbel serving as the CEO and Managing Director.

The voting power within Al Rajhi Bank, a publicly traded entity on the Tadawul, typically follows a one-share-one-vote principle for its public shareholders. However, the Al Rajhi family stands as the bank's most significant shareholders, which inherently grants them substantial voting influence over critical decisions. While specific details on dual-class shares or golden shares are not provided, the founding family's considerable ownership ensures their continued control and alignment with their long-term vision for the bank. The bank operates under a corporate governance framework that prioritizes transparency, accountability, and ethical practices, supported by strong board oversight and robust risk management protocols. The Board Risk Management Committee (BRMC) plays a key role in assisting the Board of Directors in monitoring the bank's performance against its risk appetite, adhering to the guidelines set forth in the bank's Corporate Governance Manual. Shareholders approved a cash dividend of 14.6%, amounting to SAR 1.46 per share, for the second half of 2024 during an ordinary general meeting held on April 13, 2025.

Al Rajhi Bank's Governance and Shareholder Influence

Understanding the board structure and voting power is key to grasping Al Rajhi Bank's ownership dynamics. The Al Rajhi family's significant stake underscores their influence.

• The Board of Directors comprises eleven members as of 2024.
• Four members of the Al Rajhi family are part of the current board.
• The bank operates on a one-share-one-vote system for public shareholders.
• The Al Rajhi family's substantial ownership translates to significant voting power.
• The bank's governance framework emphasizes transparency and accountability.
• Shareholders approved a 14.6% cash dividend for H2 2024.
• For a deeper dive into the bank's operations, explore the Revenue Streams & Business Model of Al Rajhi Bank.

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Recent years have seen significant financial growth and strategic moves for Al Rajhi Bank, impacting its ownership landscape. The bank's commitment to digital expansion and diversification is reshaping its operational focus and potential future ownership trends.

Al Rajhi Bank has been actively pursuing strategic acquisitions and investments. In September 2024, the bank acquired a 65% stake in the Saudi financial app Drahim. Furthermore, its subsidiary, Ejada Systems Ltd., in which Al Rajhi Bank holds an 86% stake, is reportedly considering an IPO. This potential offering, valued at an estimated $1.5 billion, could involve Al Rajhi Bank divesting at least 30% of its holding in Ejada. Demonstrating its financial strength and market confidence, the bank also successfully issued a $1.5 billion USD-denominated additional Tier 1 capital sustainable sukuk in January 2025.

Digital Transformation Initiatives

In 2024, Al Rajhi Bank saw over one billion logins to its applications. The bank experienced a 22% increase in new customers acquired via mobile phones and a 29% rise in online account openings, highlighting its successful digital strategy.

Strategic Business Focus Adjustment

The bank is adapting its business model to diversify revenue streams. This involves shifting focus towards mid-corporate and SME segments, aligning with Saudi Arabia's broader economic reform agenda.

Founding Family Influence and Public Float

While founder dilution is a natural progression for publicly traded entities, the Al Rajhi family remains the largest shareholder group. This continued significant ownership underscores their substantial influence over the bank's strategic direction.

Commitment to Islamic Banking Principles

The core of Al Rajhi Bank's operations and expansion remains firmly rooted in Islamic banking principles. This adherence is a key element in its ongoing growth and market positioning, as further detailed in the Competitors Landscape of Al Rajhi Bank.

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