Riyad Bank, one of the largest financial institutions in Saudi Arabia, announced strong financial results for the fiscal year ending 2025, with net profits growing by 11.7% to reach SAR 10.41 billion, compared to SAR 9.32 billion in the previous year. These figures reflect the bank's robust performance and its ability to adapt to economic changes, benefiting from the Kingdom's thriving business environment.
General context and operational performance
This profit growth comes at a time when the Saudi economy is undergoing major structural transformations as part of Vision 2030, which aims to diversify income sources and strengthen the role of the financial sector. As a cornerstone of the Saudi banking sector with a history spanning decades, Riyad Bank plays a vital role in financing major projects and supporting the growth of the private sector. In its statement on the Saudi Stock Exchange (Tadawul), the bank attributed this positive performance primarily to the increase in total operating income, driven by growth in net fee and commission income, net trading income, and special commission income. Conversely, the bank successfully reduced total operating expenses, largely due to a 15.8% decrease in net provisions for expected credit losses, demonstrating prudent risk management and the quality of its loan portfolio.
Strategic recommendation to increase capital
In a strategic move aimed at strengthening its capital base and supporting its future expansion plans, Riyad Bank's Board of Directors has recommended a 33.3% capital increase. This increase will be achieved by capitalizing SAR 10 billion from the statutory reserve and retained earnings, through a bonus share distribution of one share for every three shares held by shareholders. Under this recommendation, the bank's capital will increase from SAR 30 billion to SAR 40 billion, raising the number of shares to 4 billion. The bank explained that this step, which has received approval from the Saudi Central Bank, aims to enhance its financial solvency and preserve its resources to support operational activities and achieve its long-term strategic objectives.
Impact of performance on shareholders and the market
The positive news wasn't limited to profit growth and capital increase; it extended to direct returns for shareholders. The Board of Directors also recommended a cash dividend of SAR 1.64 billion for the second half of 2025, equivalent to SAR 0.55 per share after deducting zakat. The combination of cash dividends and bonus share distributions reinforces investor confidence in the bank and reflects its strong commitment to delivering added value to its shareholders. These results and recommendations are expected to positively impact the bank's share performance on the Saudi Stock Exchange (Tadawul) and further solidify Riyad Bank's position as an attractive investment choice in the banking sector, both locally and regionally.
