Chairman's
statement

Despite the challenges posed by the global economy and the necessity of raising benchmark rates in 2023 to combat inflation, Alinma Bank has demonstrated remarkable performance. This success is attributed to the guidance of our insightful leadership and the objectives outlined in the Kingdom’s Vision 2030, which emphasize economic diversification beyond the oil industry. As the financial services sector becomes pivotal in achieving growth, banks are expected to play a central role in restoring financial equilibrium amidst the increase in oil revenues relative to the Kingdom’s GDP. This strategic positioning will enable banks to capitalize on the anticipated robust expansion in non-oil sectors, fostering mutual benefit and contributing to overall economic stability.

In the midst of these circumstances, Alinma Bank maintained its trajectory towards sustainable growth throughout 2023, in alignment with its strategic roadmap, “Strategy 2025” initiated in early 2021 to bolster its esteemed position within the banking sector. Steadfast implementation of this strategy saw 81% of its 77 initiatives completed by the year’s end. The Bank also made significant headway towards its ambitious objective of ascending to the forefront of Saudi Arabia’s banking elite. Additionally, the Bank achieved premier status in return on assets, securing the top position in this metric with a notable rate surging to 2.2%. Although ranking second among banks in return on Shareholders’ equity, the Bank closed the year with an impressive 17.2%, further solidifying its position in the market. Alinma Bank secured the top spot in the percentage of ownership by qualified foreign investors, with its ownership share reaching 15.7%.

Throughout 2023, we introduced a plethora of new products and services tailored to expedite and enrich banking transactions for our esteemed customers. Moreover, our relentless commitmentto digital transformation yielded a multitude of enhancements in customer journeys, notably enhancing the banking experience for individuals, corporations, and SMEs alike. This endeavor not only bolstered satisfaction among our current patrons but also drew a substantial influx of new customers to Alinma Bank

With strong contributions from other parts of the business, including Corporate and Treasury, Alinma Bank delivered a 34% increase in net income to SAR 4.8 Bn. this year. Total assets grew rapidly, climbing 18% to SAR 236.7 Bn., and the net financing was 18.5% higher at SAR 173.6 Bn. In the coming year, we will continue to pursue similarly robust growth by implementing the remaining initiatives of our Strategy 2025, which has proved so successful to date.

Our customer acquisition program was particularly effective in the youth segment. Attracting young customers when they first start needing banking products and services is an integral part of our long-term strategy, accordingly, Alinma Bank launched unique products and value propositions in 2023 to help establish enduring relationships with them. We will continue to pursue this segment vigorously in the years to come.

Another vital aspect of our current and future sustainable growth pertains to the MSME segment, and our heightened engagement in this area this year warrants special acknowledgment. Our MSME program-based financing portfolio more than doubled in size, significantly surpassing market growth rates. Furthermore, in 2023, we expanded our collaboration with the Government’s Public Authority for Small and Medium Enterprises (Monsha’at) and augmented our program-based financing under the Kafalah program, a Government initiative aimed at removing obstacles to financing MSMEs.

A socially responsible banking leader

As part of our Strategy 2025, we are dedicated to becoming the leading banking employer of choice. Central to achieving this goal is the recruitment of Saudi Nationals. In 2023, Saudization at Alinma Bank reached an impressive 96%. Similarly, opportunities for women play an essential role in assessing an organization’s employer brand, and Alinma Bank was pleased to report an increase in the percentage of female employees to 22% in 2023. We continued to prioritize the development of our employees’ knowledge and skills this year through training, achieving a participation rate of 75% and delivering over 96,744 hours of training.

As a socially responsible institution, Alinma Bank remains dedicated to enhancing the societal landscape within the Kingdom. The Bank steadfastly allocates 1% of its annual net profits towards social responsibility programs. We take immense pride in the efforts of our employees, who once again exhibited remarkable commitment in this realm. A total of 492 colleagues contributed 2,412 volunteer hours to assist 7,000 beneficiaries across 56 charitable causes and organizations.

The confidence of our Shareholders and other Stakeholders in our effective corporate governance, risk management oversight, internal control implementation, and statutory compliance was reaffirmed in 2023, with our Bank continuing to adhere to the highest standards laid down by the Saudi Central Bank, the Capital Market Authority, and of course, Shariah law.

In 2023, efforts were reinforced to bolster the confidence of Shareholders and Stakeholders in the Banks’ effective governance practices. This involved vigilant oversight of risk management, internal control procedures, and legal compliance, aligning with the stringent standards mandated by the Saudi Central Bank and the Capital Market Authority. Furthermore, the Bank remained steadfast in adhering to best practices and Shariah provisions, ensuring adherence to established norms and regulations

Acknowledgments

My sincere appreciation is owed to the Custodian of the Two Holy Mosques, King Salman Bin Abdulaziz Al Saud, and His Royal Highness, the Crown Prince and the Prime Minister, Mohammed Bin Salman Bin Abdulaziz Al Saud. Once again, their leadership of and support for the security and economic development helped propel us to new heights.

On behalf of all my colleagues at Alinma Bank, I thank the Ministry of Finance, the Ministry of Commerce, the Saudi Central Bank, the Capital Market Authority, and other regulatory and governmental authorities for maintaining a safe and regulated industry.

Finally, but not least, thanks are extended to my colleagues, members of the Board of Directors and its affiliated committees, the executive management, and all employees of the Bank for their sincere efforts and dedication in fulfilling their duties in gaining the trust of customers, enhancing their loyalty, maintaining them, and their valuable contributions to continuing to achieve outstanding accomplishments for the Bank’s business and enhancing its position, as well as increasing returns for its Shareholders and employees.