Operating Review - Riyad Bank Annual Report
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Retail Banking
Retail Banking has been central to the Bank’s success in 2021, anticipating and reacting to the revolutionary new directions and demands that COVID-19 made essential. The pandemic acted as a catalyst to drive our already ambitious commitment to digitization even further and even faster. The result has been an enormous stride forward in the quality and sophistication of the products and services we offer, which has benefitted our customers at every step of the retail value chain.
Throughout 2021, Retail Banking proved itself to be one of the most dynamic and agile business divisions, adapting and innovating in an environment restricted by movement and traditional banking practices. Our distinctive products and service, backed by flexible technological infrastructure and the advances we made in delivering the highest level of services, exceeded the standards our customers have come to expect. Our results for the year on all levels – from financial performance to customer satisfaction and digitization – have helped Retail Banking to create value for the Bank, our customers and all our stakeholders.
2021 Financial Highlights
The pandemic accelerated our digital journey and the highly impressive financial results have set us on a trajectory for further positive growth as a consequence.
Net Income
SAR 1.2 Bn
Total Deposits
SAR 91 Bn
Increase Consumer Lending
19%
Contribution to the Bank’s total net income in 2021
18%
2021 Retail Banking Digital Milestones
Increase customer base
+6%
New customer acquisition
+8%
Digital penetration
+900 bps
Sales productivity
+16%
Corporate BankingCorporate Banking continued to build on last year’s strong results, demonstrating extraordinary resilience in overcoming the disruptions and challenges brought on by the COVID-19 pandemic. Our investments in new technology have played a pivotal role in achieving net income growth and delivering enhanced services and a superior experience for our valued customers during 2021.
This year, Corporate Banking continued its drive towards innovation and digital banking, which are now fundamental to our growth and provision of expanded products. It is our ability to adapt to the crisis and adopt the most innovative practices which has helped us to not only navigate the pandemic but also explore and exploit new avenues of investment and funding. The expansion of our portfolio and pioneering financing into new territories has made 2021 an exceptional year for Riyad Bank’s Corporate Banking and its customers.
2021 Financial Highlights
During 2021, we continued to support Saudi Vision 2030 through a range of strategic initiatives, while delivering value for our clients through a variety of successful transactions.
Total Assets
SAR 144Bn
Net Income Growth
71%
Net Loans Growth
SAR 12Bn
Total Deposits Growth
SAR 3.2Bn
Treasury and InvestmentsIt was an exceptionally strong year for Treasury and Investments, which exceeded its financial targets for 2021. It was a year in which our successful tactical adjustment of our investment portfolio turned the pandemic-induced crisis into an opportunity. The speed, agility and effectiveness of implementing our strategies in the immediate aftermath of COVID-19 was exemplary and stood us in good stead for a remarkably successful 12 months, regardless of the financial environment.
Treasury and Investments’ commitment to innovation and digitization provided an ideal platform for us to offer a far more competitive service than our competitors in 2021. The pandemic acted as an accelerator for our technology policies as the demand for alternative services and practices increased, enabling us to adjust and confront the challenges of COVID-19. In a time of hardship for many businesses, we not only supported their survival and growth but we also recorded new milestones of our own.
2021 Financial Highlights
Net operating income
SAR 2.4Bn
Gross operating income 2021
SAR 2536Bn
Contribution to the Bank’s total
net income in 2021
SubsidiariesDivision
Capital
(SAR)Total Shares
Ownership %
Main
ActivityBase Country
Activity Country
Riyad Capital
500,000,000
50,000,000
100%
Carry out trading activities as principal and agent, undertake coverage, establish and manage investment funds and portfolios, in addition to arranging and providing consulting, stock keeping services, portfolio management and trading.
Saudi Arabia
Saudi Arabia
Ithra Al Riyad Real Estate
10,000,000
1,000,000
100%
Keep and manage assets provided by customers as collateral, and a guarantee, and the sale and purchase of real estate for financing purposes.
Saudi Arabia
Saudi Arabia
Riyad Company for Insurance Agency
500,000
50,000
100%
An insurance agent for selling insurance products, including their own and those managed by other main insurance companies.
Saudi Arabia
Saudi Arabia
Curzon Street Properties Limited
10,248
2,000
100%
Property ownership.
Isle of Man
UK
Riyad Financial Markets Limited
187,500
50,000
100%
Perform financial derivative transactions and repurchase agreements with international parties on behalf of Riyad Bank.
Cayman Islands
UK
Esnad Al-Riyad Company for Human Resources
500,000
1 cash share
100%
Provide operational human resources services exclusively for Riyad Bank and its subsidiaries.
Saudi Arabia
Saudi Arabia
Riyad Capital’s Riyad Saudi Equity Sharia Fund was awarded ‘Best Islamic Equity Fund 2021’ by the Global Islamic Finance Awards (GIFA)
Digital TransformationThe most universal themes for Riyad Bank’s successes in 2021 were innovation and digitization. While COVID-19 accelerated development and required redirection in many cases, the expansion of our investment in technology and digital models was already well and truly established. The rapid advances covered every aspect of the Bank’s operations and helped to realize the great potential of our employees and customers. Last year will be seen as one of the defining moments in the way we further grow our network and leverage greater value to our clients.
During 2021, the Bank instigated major structural changes across various divisions with the result that digital became the primary means of conducting business. The vast majority of customer transactions and services are now end-to-end online, a remarkable transformation which has effectively changed the face of traditional banking stretching back hundreds of years.
This was all possible due to the continuous efforts within the Bank to integrate important services, providing best-in-class convenience to our current as well as new-to-bank clients and allow them to take control of their finances digitally.
Our Transformation Roadmap:
1
Manage and deliver all data reporting
2
Govern digital projects in other units
3
Ensure strategic alignment between business units
4
Manage critical growth in resources and other talent pool
5
Manage fintechs collaboration
Personal Banking in 2021
Clients acquired through digital channels
73%
Transactions executed digitally
89%
COVID-19 had an effect on our customers’ finances and our advances have helped them to weather the storm to a large degree, enabling them to bank and transact online through faster and easier services.
Customer ExperienceOur customers have always been at the heart of everything we do at Riyad Bank through a relationship built on trust, loyalty and our ability to innovate and surpass our clients’ expectations. This year strongly supported that philosophy, as we drove even more progressive and proactive features to all aspects of our services, resulting in greater customer satisfaction and a better brand experience. Throughout 2021, we provided essential new banking products and met COVID-19 challenges with tremendous advances in new technology and outstanding support to our customers.
Last year was an extraordinary experience for the Bank, our customers and our employees. As well as the enhanced financial services we introduced, we also adopted a duty of care both internally and externally. While the restrictions of the pandemic may have eased in many aspects of our lives in 2021, the repercussions are still very evident. Through our policy and product innovations across the year we provided both banking and emotional support and we can take pride in ourselves on lending tremendous assistance to the community throughout these challenging times.
Increased all product leads
Increased affluent leads
Increased New to Bank customers
Increased brand value
Maintained brand position
Achieved ROI on bank sponsorships
25%NPS increase in 2021