Al Rajhi Bank

Stock performance

History

Al Rajhi Bank grew out of a currency-exchange and money-transfer business founded by the Al Rajhi family, which expanded into full banking services as Saudi Arabia's financial sector developed alongside the kingdom's oil-driven economic growth from the mid-twentieth century onward. It was formally established as a bank operating strictly under Islamic Sharia principles, avoiding interest-based lending in favor of profit-sharing and fee-based financing structures, and grew into one of the largest Islamic banks in the world by assets.

Business model

Al Rajhi Bank provides retail, corporate, and investment banking services structured entirely around Sharia-compliant Islamic finance principles, using profit-sharing (murabaha, ijara, and similar structures) rather than conventional interest-based lending. This positioning has made it a preferred bank for religiously observant customers not just in Saudi Arabia but across other Islamic finance markets, while its underlying banking economics function similarly to conventional banks in terms of risk and return.

Market position

Al Rajhi Bank is the largest Islamic bank in the world by assets and one of the largest banks of any kind in Saudi Arabia and the broader Gulf region, competing domestically with Saudi National Bank and Riyad Bank. Its scale and specialization in Islamic finance give it a distinctive competitive position that has been increasingly emulated by conventional banks adding their own Islamic-finance product lines.

Country impact

Al Rajhi Bank is one of the largest and most important financial institutions in Saudi Arabia, central to consumer and business banking within the kingdom's Sharia-compliant financial system. Its scale has helped establish Saudi Arabia as a global center for Islamic banking and finance more broadly.