Al Rajhi Bank's stock saw a notable increase of 0.9% during morning trading on the Saudi Stock Exchange (Tadawul), reaching SAR 103.3, compared to the previous day's closing price of SAR 102.5. This positive performance coincides with the bank's disclosure of significant developments related to its financial position and capital structure, which has boosted investor confidence in the bank's future performance.
Stock performance and trading activity
According to data from the Saudi Stock Exchange (Tadawul), Al Rajhi Bank's stock opened trading at SAR 103.2, reaching a high of SAR 103.8 and a low of SAR 102.2. Morning trading was brisk, with 4,052 transactions executed, averaging 721 shares per transaction, for a total volume of approximately 2.9 million shares. These figures reflect the high liquidity of the stock, given its status as one of the leading stocks in the Saudi market.
Details of the historic capital increase
The most significant event positively impacting the stock is Al Rajhi Bank's board of directors' recommendation to the extraordinary general assembly to increase the bank's capital by a substantial 50%. This recommendation aims to raise the capital from SAR 40 billion to SAR 60 billion by capitalizing SAR 20 billion from retained earnings. This will be achieved by distributing bonus shares to shareholders at a rate of one share for every two shares held.
Economic importance and strategic context
This move is of paramount importance, extending far beyond mere accounting figures. Al Rajhi Bank is one of the world's largest Islamic banks by market capitalization and a key component of the Saudi Stock Exchange (TASI) index. This substantial capital increase signifies:
- Strong financial solvency: The bank’s ability to capitalize 20 billion riyals of retained earnings reflects the strength of its financial position and the accumulation of its operating profits over the past years.
- Supporting expansion and growth: Strengthening the capital base gives the bank more room to expand its lending and financing operations, whether to the individual or corporate sector, in line with the economic growth that the Kingdom is witnessing within Vision 2030, and the major projects that require huge financing.
- Boosting liquidity: Increasing the number of issued shares from 4 billion to 6 billion shares will contribute to deepening the market and increasing the number of shares available for trading, which may attract new segments of local and international investors.
Eligibility date and annual performance
The bank clarified that the entitlement date for the bonus shares will be for shareholders who own shares at the close of trading on the day of the Extraordinary General Assembly meeting (which will be determined later), and who are registered in the Securities Depository Center's records at the end of the second trading day following the meeting date. It is worth noting that the bank has already obtained approval from the Saudi Central Bank (SAMA) for this increase.
Historically, Al Rajhi Bank's stock has risen by 6.3% since the beginning of this year. Over the past 52 weeks, the stock has fluctuated between a low of SAR 87.8 and a high of SAR 113, demonstrating its resilience and ability to recover and grow despite global market volatility.
