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Al-Rajhi shares jump 7% as it intends to distribute free shares

Al-Rajhi shares

Riyadh, (Business News Report)|| The Saudi Al-Rajhi Bank’s shares rose by 7% in Sunday trading to record the price of 169.6 riyals.

The recorded share price is the highest since it was listed on the Saudi Stock Exchange.

Last week, the Saudi market witnessed active transactions in the banking sector’s shares in general, led by Al-Rajhi shares.

The sector’s trading accounted for more than 40% of the total market trading value, while a number of the sector’s shares recorded historical levels.

The board of directors of the Saudi Al-Rajhi Bank aims to increase the bank’s capital by 60%, by distributing free shares to shareholders, amounting to 15 billion riyals.

The Board of Directors of Al-Rajhi recommended the extraordinary general assembly to approve the capital increase from 25 billion riyals to 40 billion riyals by capitalizing 15 billion riyals from the retained earnings by distributing three free shares for every five original shares.

The bank said in a statement on Sunday that the date of eligibility for the free shares will be at the end of trading on the day of the extraordinary general assembly, which will be determined later.

Al-Rajji Bank is considered the largest Saudi bank in terms of market value, which amounts to about 431 billion riyals. But it comes in second place in terms of the value of assets, with a value of 581 billion riyals, compared to assets of 911 billion riyals for the National Bank of Saudi Arabia.

Abdullah bin Sulaiman Al-Rajhi, Chairman of the Board of Directors of Al-Rajhi Bank, said in a statement that the capital increase aims to strengthen the capital base and its financial solvency, which contributes to supporting the bank’s strategic and expansion plans for the financing and investment portfolio.

The beginning of the bank was 750 million riyals, and the first doubling amounted to 1.5 billion riyals, while it witnessed an increase through bonus shares to 2.250 billion riyals.

The second doubling was to 4.5 billion riyals, and an increase through bonus shares to 6.750 billion riyals.

The third doubling raised the capital to 13.5 billion riyals. In 2008, the capital was increased to 15 billion riyals. In 2013, the capital increased to 16.250 billion riyals, and in 2019, the capital increased to 25 billion riyals.

Al-Rajhi Bank’s net profit increased by 39% in 2021, to reach 14.75 billion riyals, compared to approximately 10.6 billion riyals in 2020. This is  thanks to the increase in net income as a result of an increase in total operating income by 24.1% as a result of the increase in net income from financing and investment, and income from bank transaction fees, and income from other operations.

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