Al Rajhi Bank, Saudi Arabia's largest Islamic lender, reported a significant increase in annual profits for 2024, with net income rising 18.6% to SAR19.7bn ($5.25bn), up from SAR 16.6bn in the previous year, the bank announced on January 29.

The strong performance was primarily driven by a 16.4% increase in total operating income, bolstered by growth in net financing and investment income, banking service fees, foreign exchange income and other operational revenues.

In detailed financial results, the bank reported that net special commission income from financing rose 15% to SAR22.1bn, while net investment income increased by 32.6% to SAR2.75bn.

These gains were attributed to higher gross income from financing and investment activities, despite corresponding increases in financing and investment returns.

Operating expenses, including credit loss provisions, increased by 12.1% due to higher depreciation costs and employee salaries and benefits, partially offset by lower general and administrative expenses.

Credit loss provisions rose 40.7% to SAR2.117bn from SAR1.504bn in the previous year.

The bank's board recommended a dividend distribution of SAR5.84bn for the second half of 2024, equivalent to SAR1.46 per share.

This follows a first-half dividend payment of SAR5bn (SAR1.25 per share), bringing the total dividend distribution for 2024 to SAR10.84bn, or SAR2.71 per share, representing 27.1% of the nominal share value.

Additionally, Al Rajhi Bank successfully raised $1.5bn through a dollar-denominated Additional Tier 1 Sukuk offering, featuring a sustainable annual yield of 6.250%. The issuance comprises 7,500 certificates with a nominal value of $200,000 each, redeemable after five years, and will be listed on the London Stock Exchange.