Al Rajhi Dividend Distribution: A Comprehensive Guide to Policy, Procedures,

Dividend distribution is the process by which listed companies, such as Al Rajhi Bank, decide to pay part of their financial profits to shareholders in cash or as bonus shares. In the Saudi banking sector, this process is overseen by the Saudi Central Bank (SAMA) and the Capital Market Authority, ensuring the sector remains financially stable and robust. Dividend distribution requires approval from the company’s board of directors, followed by regulatory approval. Distributions are usually announced annually or semi-annually after the approval of financial statements, followed by a general assembly meeting of shareholders. In banks, zakat is deducted from dividends before they are paid to shareholders, as is the case with Al Rajhi Bank. Dividend distribution is seen as an important factor in attracting investors, especially in emerging markets where regular cash returns are preferred. Al Rajhi is a prominent example, maintaining a regular and transparent dividend policy that reflects its strong financial position.

Al Rajhi’s dividend policy is based on balancing the return of part of the profit to shareholders with strengthening capital to fund future growth and expansion. The board of directors typically recommends semi-annual or annual dividends after reviewing financial performance and ensuring compliance with the solvency standards set by regulators. The bank considers factors such as net profits, capital requirements, future outlook, and zakat obligations. In recent years, Al Rajhi’s management has maintained a competitive dividend policy, with the annual payout ratio reaching around 27.1% of capital in 2024. Distributions are announced through official channels such as the Saudi Stock Exchange (Tadawul) and the bank’s website, ensuring transparency and clarity for investors.

Official figures and data show that Al Rajhi Bank maintains consistent dividend distributions, with notable increases in some periods in line with profit growth. In 2024, the bank announced a cash dividend of SAR 5,000 million (12.5% of capital) for the first half, followed by SAR 5,840 million (14.6% of capital) for the second half of the same year. The total annual distribution amounted to SAR 10,840 million. In 2023, annual distributions were lower (around SAR 9,200 million). The following table details the distributions:

| Period | Payout Ratio | Dividend per Share (SAR) | Total Distribution (SAR million) |
|-----------|--------------|--------------------------|----------------------------------|
| 2H 2023 | 11.5% | 1.15 | 4,600 |
| 1H 2024 | 12.5% | 1.25 | 5,000 |
| 2H 2024 | 14.6% | 1.46 | 5,840 |

These figures demonstrate Al Rajhi’s commitment to a regular and growing dividend policy, reflecting its strong financial performance and strategy to enhance investor satisfaction.

The dividend distribution process goes through several regulatory and administrative stages, starting with a board recommendation based on a review of financial statements and assessment of distributable profits, followed by approval from the Saudi Central Bank (SAMA) and the Capital Market Authority to ensure sector stability. Distributions are then announced through official channels, with the entitlement and payment dates specified. The zakat amount due under local regulations is deducted from the total distributions before payment to shareholders. Eligible shareholders receive dividends through their investment accounts linked to their portfolios in the financial market, or their registered bank accounts. These procedures aim to ensure fairness, transparency, and compliance with regulatory laws and instructions.

Al Rajhi Bank shares are among the most traded and attractive in the Saudi market, linked to several key financial indicators:
- Share price: Ranged between SAR 80 and 90 during 2024 and 2025.
- Market capitalization: Over SAR 320 billion.
- Price-to-earnings ratio (P/E): Ranged between 9 and 11 in the past two years.
- Dividend yield: Approached 6% in some periods, among the highest in the Saudi banking sector.

Regular dividend distributions boost investor confidence in the share and support its appeal for long-term investment. The increasing pace of distributions is also seen as evidence of the bank’s strong cash flows and ability to generate sustainable profits.

Al Rajhi Bank’s profits saw significant growth in 2024 and 2025. Net profits for the first half of 2025 reached around SAR 12.1 billion, an increase of over 30% compared to the same period the previous year. Second quarter 2025 profits alone amounted to about SAR 6.2 billion. This strong profit growth enabled the bank to increase its cash distributions and strengthened its competitive position in the Saudi banking sector. These results are based on the bank’s expanding activities, increased loan portfolio, improved asset quality, as well as efficient financial management and innovation in digital banking services.

Dividend distribution is a core element of Al Rajhi Bank’s strategy, aiming to balance rewarding shareholders and strengthening its capital base. Management adopts a flexible dividend policy aligned with annual performance and economic conditions, with a focus on financial sustainability. Regular dividends help boost investor confidence and attract new capital, reflecting the bank’s commitment to fair returns. Dividend distribution also strengthens the bank’s reputation locally and regionally, especially amid strong competition among Saudi banks.

Al Rajhi Bank faces competition from major banks such as Saudi National Bank, Alinma Bank, Arab National Bank, and others. When comparing payout ratios, Al Rajhi maintains a relatively high distribution rate (23% in 2023, 27.1% in 2024), while competitors’ ratios range from 18–36% annually depending on the bank and yearly performance. Al Rajhi enjoys a relative advantage in regular cash returns and financial stability, as well as a broad customer base and advanced digital banking services. This strengthens its position as a preferred choice for investors seeking stability and sustainable returns.

Al Rajhi’s dividend policy fully adheres to Sharia principles, with zakat deducted from total cash distributions before payment to shareholders, in accordance with local regulations. The net distribution (after zakat) is clearly disclosed to shareholders, with the deduction rate and entitlement/payment dates specified. The bank ensures all procedures are reviewed by the Sharia Supervisory Board to guarantee compliance with Islamic finance principles. This commitment enhances investor trust, especially among those seeking Sharia-compliant investments.

Regular and growing dividend distributions reflect the strong financial position of Al Rajhi Bank and the success of its strategy in delivering rewarding returns to shareholders. Regular cash returns are a key incentive for attracting both individual and institutional investors, as many prefer to invest in shares that provide periodic income. Transparent distribution policies also help stabilize the share price and reduce volatility, supporting its appeal for long-term investment. Moreover, the bank’s ability to maintain distributions even during economic challenges demonstrates management’s risk control and financial balance.

Al Rajhi Bank’s management is committed to transparency and full disclosure when announcing dividend distributions. All details are published on the Saudi Stock Exchange (Tadawul) website, as well as the bank’s official channels and reputable financial media. Announcements include distribution details, entitlement date, payment date, zakat rate, and total distributed amount. This approach enhances the bank’s credibility with investors and helps build long-term trust in the share. Investors can easily follow all updates through official sources and financial analysis platforms.

Al Rajhi’s dividend policy is influenced by several economic factors, including local and global interest rates, inflation rates, monetary policies, and the overall performance of the Saudi economy. Despite challenges from global market fluctuations, the bank has maintained a high pace of dividend distribution, benefiting from the strength of the local economy and supportive banking sector policies. Saudi Vision 2030 and government initiatives have also boosted the financial sector’s growth, positively impacting bank profitability and their ability to continue rewarding distributions to shareholders.

To follow the latest news and details on Al Rajhi Bank’s dividend distributions, it is always recommended to refer to official and accredited sources, such as the Saudi Exchange platform (www.saudiexchange.sa), Al Rajhi Bank’s website, and Argaam Financial News (www.argaam.com). These sources provide accurate tables and disclosure protocols for each distribution, including payment and entitlement dates, as well as financial analyses and periodic reports on the Saudi banking sector’s performance.