SoFi shares rise as record revenue, member growth drive strong Q3 results
Introduction & Market Context
Al Rajhi Bank, Saudi Arabia’s largest Islamic lender, presented its third-quarter 2025 results on October 27, showcasing robust financial performance across key metrics. The bank’s shares rose 1.77% to 107.1 riyals following the announcement, reflecting positive investor sentiment despite broader market challenges.
The results come amid expectations of interest rate cuts by the end of 2025, with the bank noting that Saudi real GDP improved by 3.9% in Q2 2025, driven by 4.6% higher non-oil activities. According to the presentation, the Saudi banking sector continues to show strength, with deposit growth aligning with loan expansion.
Quarterly Performance Highlights
Al Rajhi Bank reported impressive growth across all major financial indicators for the third quarter of 2025. Net income for the period after Zakat increased by 24.6% year-over-year, reaching SAR 6,360 million compared to SAR 5,103 million in Q3 2024.
As shown in the following chart of quarterly net income trends:
Total assets grew by 17.4% year-over-year and 8.7% year-to-date, reaching SAR 1,059 billion by the end of Q3 2025. This growth was primarily driven by a 9.0% year-to-date increase in the financing portfolio, which reached SAR 756.0 billion, up from SAR 693.4 billion at the end of 2024.
The bank’s balance sheet expansion is illustrated in this chart:
Operating income showed strong momentum, increasing by 17.1% year-over-year to SAR 9,882 million for Q3 2025, compared to SAR 8,439 million in the same period last year. For the first nine months of 2025, operating income reached SAR 28,685 million, representing a 23.1% increase from the previous year.
The components driving this growth are detailed in the following chart:
Strategic Initiatives
Al Rajhi Bank’s "Harmonize the Group" strategy continues to show tangible results across four key business areas. The percentage of customers with more than one product increased from 38.0% in FY 2023 to 44.6% in Q3 2025, demonstrating success in cross-selling efforts. Meanwhile, the bank’s Corporate Banking market share expanded from 12.3% to 14.1%.
The bank’s strategic progress is illustrated in this overview:
Digital transformation remains a priority, with the digital-to-manual ratio improving to 96:4 in Q3 2025 from 94:6 in FY 2023. This focus on digitalization has contributed to the bank’s industry-leading cost-to-income ratio of 22.5% for the first nine months of 2025, down from 25.4% in the same period last year.
Al Rajhi Bank has also made significant strides in its ESG initiatives, with USD 5.7 billion in green syndicated loans and USD 2.0 billion in sustainable sukuk. The bank reported 24% growth in female employees in 2024, highlighting its commitment to diversity and inclusion.
The ESG highlights are summarized in this overview:
Detailed Financial Analysis
Al Rajhi Bank maintained strong asset quality, with the non-performing loan (NPL) ratio holding steady at 0.76% in Q3 2025, unchanged from the end of 2024. The cost of risk decreased slightly to 0.31% for the first nine months of 2025, compared to 0.33% in the same period last year.
The bank’s return metrics remain industry-leading, with return on equity (ROE) improving to 23.55% for the first nine months of 2025, up from 20.47% in the same period last year. Earnings per share increased to SAR 1.48 in Q3 2025 from SAR 1.22 in Q3 2024.
These impressive return metrics are highlighted in the following chart:
Capital adequacy remains robust, with the total capital ratio at 21.1% in Q3 2025, well above regulatory requirements. The bank’s liquidity position is also strong, with the Liquidity Coverage Ratio (LCR) at 154.4% and the Net Stable Funding Ratio (NSFR) at 110.3%.
The bank’s capitalization trends are illustrated here:
Forward-Looking Statements
Looking ahead to the remainder of 2025, Al Rajhi Bank maintained its guidance for high single-digit financing growth. The bank expects its net profit margin to range between 0 and +10 basis points, while the cost-to-income ratio is projected to remain below 23.5%.
Return on equity is expected to stay above 22.5%, and the cost of risk is anticipated to be between 0.30% and 0.40%. The bank’s Tier 1 capital ratio is projected to remain above 19.5%.
These forward-looking projections are summarized in the following guidance chart:
Management noted that interest rates are expected to decrease by the end of 2025, which could impact both credit demand and deposit mix. However, the bank’s strategic focus on value rather than volume, as emphasized by Group CFO Abdulrahman Abdullah Al-Fadda, positions it well to navigate potential macroeconomic challenges.
With Saudi Arabia’s GDP forecasted to grow by 4.0% in both 2025 and 2026 according to IMF estimates, Al Rajhi Bank appears well-positioned to maintain its growth trajectory and industry-leading performance metrics in the coming quarters.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.