Al Rajhi Bank Saudi vs. Saudi National Bank - A Clash of Financial Powerhouses in KSA Lending Market – Ken Research

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When comparing Al Rajhi Bank Saudi and Saudi National Bank (also known as Samba Bank), there are several factors to consider.

Both banks are prominent financial institutions in Saudi Arabia, but they have different strengths and areas of focus.

Here's a comparison between Al Rajhi Bank Saudi and Saudi National Bank:

History and Reputation:

Al Rajhi Bank Saudi:

 Inception in 1957, Al Rajhi Bank is one of the most popular and largest Islamic bank in the world.

It is popular among the masses for its enormous branch network and clients, as well as for operating in Sharia-compliant banking services.

Saudi National Bank (Samba Bank):

Founded in 1978, Saudi National Bank (Samba Bank) is among the leading banks in Kingdom of Saudi Arabia.

It has a great reputation for providing people, corporations, and organisations with a comprehensive range of banking products and services.

Size and Market Presence:

Al Rajhi Bank Saudi

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Founded in 1957, Al Rajhi Bank is Saudi Arabia’s second-largest lender by assets (US$102.18bn) and the world’s largest Islamic bank by capital.

It claims to have the largest customer base in Saudi Arabia with more than 12 Mn customers, also almost 10,000 employees and a network of more than 521 branches and 212 remittance centres across the Kingdom.

Al Rajhi Bank is well-known for its comprehensive market presence, thanks to its big client base and extensive network of branches and ATMs throughout Saudi Arabia.

It has a sizable market share and serves a variety of consumer sectors.

Saudi National Bank

SNB has more than 11 million customers, 500+ branches and a significant private banking proposition.

Samba Bank is also one of the largest banks in Saudi Arabia, with a substantial market presence. It offers its services to a diverse customer base, including retail and corporate clients, both domestically and internationally.

Technological Innovation:

Al Rajhi Bank Saudi:

Al Rajhi Bank has invested in digital transformation and offers a range of online and mobile banking services to its customers. Some of the key achievements included:

• 7 million active digital banking customers for the year under review
• Aggressive 145% YoY growth in digital onboarding with 90% of all retail customer accounts opened during the year opened via digital channels
• Payroll solutions for e-business customers
• A high performing, rapidly evolving mobile ecosystem with both the best-rated retail and business banking mobile apps in the Kingdom
• Delivery and roll out of end-to-end digitised Mortgage and Auto Lease financing solutions
• A 275% increase in assets powered by digitised personal finance products, and a significant increase in liabilities fuelled by non-profit bearing liabilities

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Saudi National Bank:

ITC InfoTech successfully completes 10 years of strategic association with Saudi National Bank.

ITC InfoTech in these years has played a pivotal role in the Bank’s modernization, digital transformation, and growth journey

Samba Bank has also embraced technology and offers innovative digital banking solutions. It provides online banking platforms, mobile banking apps, and digital wallets to enhance customer convenience and accessibility.

ITC Infotech has leveraged its extensive domain understanding and skills over the last decade to create best-in-class technology consulting solutions that assist customers in overcoming problems and accelerating growth in the Kingdom.

The organization will remain focused and committed to assisting clients in meeting Saudi Arabia's Vision 2030.

According to Ken Research, the analysis both banks have a massive market share and popularity, while choosing banking services as per individual vary based on different preferences and needs.

When choosing between Al Rajhi Bank Saudi and Saudi National Bank, it's important to look into major factors some of which are - specific banking needs curating to personal needs, general customer support, fees and charges, interest rates, and the overall convenience of banking services.

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KSA lending market

KSA's Lending Market Expected to Reach PHP 67 Bn by 2027, Driven by 4 Key Catalysts: Ken Research

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Storyline

1. KSA's private consumption expenditure has risen, indicating improved living standards and reduced poverty.
2. Demographic factors influence lending preferences, with under-24 individuals seeking credit for education and ventures, while 25-54 age group seeks loans for homes and cars.
3. Islamic finance has gained popularity, catering to KSA's predominantly Muslim population.
4. Digital banking has reshaped the lending landscape, reducing the need for physical bank branches.

The KSA lending market has shown outstanding growth potential, driven by various catalysts that have fueled the financial landscape in the country.  From consumption expenditure trends to the preferences of different age groups, along with the increasing popularity of Islamic finance and the transformative impact of digital banking, these factors have propelled the lending market forward.

1. KSA Consumption Expenditure Trends

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• KSA’s private consumption expenditure has been following an increasing trend and rose by 26.7% from Oct 2020 to Oct 2022.
• An increase in private final consumption is usually indicative of a rise in standard of living of people in the society, and a decrease in levels of poverty.
• Consumption expenditure growth has been rising through the last decade.

As KSA’s personal expenditure is on rise, a need for short term and long term loans by individuals also increases. Therefore leading to growth in overall KSA Lending market.

2. Youth: Credit for knowledge and ventures. Adults: Loans for homes and wheels.

People under the age of 24 taking credit for education and starting businesses while those between 25-54 seeking loans to buy homes and cars

• KSA has 4% of its citizens under the age of 24 leading to increased demand for credit for education and starting businesses.
• The population within the age range of 25-54 covers more than half of the population and seeks loans to finance the purchase homes and cars.

These needs of starting a business or buying a new car/house, all of which requires loans to integrate it. Thereby fueling the lending market in KSA.

3. Islamic finance has gained popularity

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• Islamic finance has become increasingly popular in KSA, among the country's large Muslim population (2% of the total population).
• Islamic finances: Sharia-compliant mortgages, etc. have seen increased demand.
• To get a Sharia-compliant mortgages one needs -

To qualify for a Sharia mortgage, you'll typically need a deposit of between 10% and 35% of the property's value. That said, it might be possible to find home purchase plans that need as little as a 5% deposit.

5. Banking in KSA: More Credit, Fewer Branches - Digital Surge Rewrites the Rules

The increase use of digital banking and online services has diminished the need for physical bank branches.

Customers are increasingly using online and mobile banking services for day-to-day transactions like - transferring money to vendors, shopping, checking bank balance etc.

This trend has accelerated during the COVID-19 pandemic, with many customers avoiding in-person banking to reduce the risk of infection

According to Ken Research, the KSA Lending market continues to expand, four key catalysts have contributed to its rise.

Individual consumption trends, the borrowing trends in different age groups, the increasing popularity of Islamic finance, and the adoption of digital banking are all the major catalyst to the expanding in market.

Customers are increasingly turning away from traditional bank branches in favour of the ease and accessibility provided by digital platforms.

These forces are altering the lending market, opening up new opportunities and posing new problems for Saudi financial institutions.

For more insights on market intelligence, refer to the link below: –

KSA lending market