National Commercial Bank: Comprehensive Financial Performance Analysis

National Commercial Bank was established in 1953 as the first national joint-stock bank in Saudi Arabia, during a period that witnessed the beginning of the Kingdom's major economic renaissance. Its inception was linked to the need for a banking institution capable of supporting emerging housing and commercial projects, meeting the demands of rapid civil and commercial growth at that time. Since its establishment, the bank has played a pioneering role in financing both the public and private sectors, providing the first real estate financing products and commercial loan facilities for Saudi individuals and companies. Early government support contributed to the bank's stability and expansion of its operations, as the Ministry of Finance oversaw it and guided its investment policies in its early days.

Over time, the bank's administrative and financial structure evolved, with a royal decree issued in 1988 converting the bank into a public joint-stock company, allowing it to attract new capital and expand its shareholder base. Since then, the bank has seen significant expansion in its branch network, with branches spread across various regions of the Kingdom, in addition to opening representative offices in some regional and international markets. The bank has also entered into strategic partnerships with global financial institutions, allowing it to benefit from international expertise and adopt best practices in banking.

In the following decades, National Commercial Bank continued to update its systems and develop its products to meet changing customer expectations. The bank launched numerous digital services and enhanced its presence in Islamic banking by establishing departments and products compliant with Sharia law. In 2023, its merger with Samba Financial Group represented a major turning point in its history, resulting in the establishment of Saudi National Bank (SNB), which carries the legacy of National Commercial Bank and its leadership in the Saudi banking sector. This historical development embodies the bank's ability to adapt to economic changes, embrace innovation, and maintain its leading position in the Saudi financial system.

National Commercial Bank features an ownership structure that reflects a strong partnership with the Saudi state, as the government holds a strategic stake through the Public Investment Fund and several other government entities. This government support is one of the key components of the bank's stability and trust, contributing to enhancing its financial capabilities and ensuring the continuity of its operations in the face of economic fluctuations. The Public Investment Fund's stake in the bank represents a significant percentage, reflecting the government's desire to maintain the bank's strength and influence within the local and regional banking sector.

The government support for National Commercial Bank extends to various aspects, including the legislative and regulatory policies set by the Saudi Arabian Monetary Authority (SAMA), aimed at protecting the Saudi banking system and ensuring its financial soundness. During periods of crises or economic challenges, such as the COVID-19 pandemic or periods of declining oil prices, the bank has benefited from government initiatives aimed at supporting liquidity in the banking sector, encouraging lending to affected sectors, and enhancing commercial financing.

This intertwining of public and private sectors in the bank's ownership and management has granted National Commercial Bank exceptional capacity to participate in financing major government projects, especially infrastructure projects and economic transformation under Saudi Vision 2030. The bank has also played a pivotal role in implementing national initiatives, such as supporting housing financing, stimulating investment in strategic sectors, and expanding the financial inclusion base. At the same time, the bank has maintained a diverse shareholder structure that includes individual and institutional investors from within and outside the Kingdom, enhancing its transparency and governance. This mix of government support and openness to private investments provides National Commercial Bank with significant flexibility in financing growth and expansion, enhancing its ability to bear risks and achieve its strategic goals in the long term.

National Commercial Bank underwent a significant strategic transformation in 2023 with the completion of its merger with Samba Financial Group, resulting in the establishment of Saudi National Bank (SNB), which became the largest banking entity in the Kingdom in terms of assets and market value. The merger process was characterized by careful planning and phased integration between administrative and technical systems, allowing for the utilization of the expertise of both entities and maximizing operational efficiency. Share distribution and customer and employee bases were consolidated to form a single institution capable of facing increasing competitive challenges in the Saudi market.

This merger had widespread effects on the bank's institutional structure, as key departments were unified and sections were restructured to ensure optimal utilization of resources and expertise. The merger enabled National Commercial Bank to expand its customer base, increase the size of its loan and deposit portfolio, and improve its ability to finance major projects. It also enhanced the bank's position in key financial indicators on the Tadawul exchange, increasing its attractiveness to local and international investors.

Operationally, the merger provided opportunities to achieve economies of scale by reducing operational costs and integrating banking systems, positively reflecting on the bank's profitability and operational efficiency. The merger also allowed for the acceleration of digital transformation plans, development of innovative financial products, and utilization of diverse distribution channels from both entities. At the same time, the bank faced challenges related to integrating different corporate cultures and standardizing procedures, but senior management established clear strategies to overcome these challenges and ensure a smooth transition.

This transformation has solidified National Commercial Bank's position as the largest bank in the Kingdom, with greater ability to compete in the local and regional markets. It has also enhanced its status as a key partner in implementing national projects and contributed to raising the level of services and products offered to individual and corporate clients.

National Commercial Bank offers a comprehensive range of banking services that meet the needs of individuals, businesses, and institutions, with a focus on innovation and meeting the changing requirements of the Saudi market. Key products include opening current and savings accounts, issuing credit cards, providing consumer and real estate loans, and auto financing. The bank also offers specialized solutions for wealth management and investment, such as portfolio management, mutual funds, and financial brokerage services through its subsidiaries.

The bank places special emphasis on digital banking services, having launched advanced smartphone applications that enable customers to conduct most banking operations remotely, including transfers, bill payments, loan requests, and account inquiries. The bank has also expanded its electronic banking services for businesses, such as electronic payment solutions, cash management, and international trade services. This has allowed Saudi companies to manage their financial flows more efficiently and improve their growth and expansion capabilities.

National Commercial Bank also excels in providing Sharia-compliant banking services, having established specialized departments to develop Islamic products such as profit-sharing financing, Murabaha, and Ijarah, in addition to investing in Sharia-compliant securities. These products meet the needs of a wide segment of customers who prefer solutions aligned with religious values, enhancing the bank's competitiveness in the local market.

Additionally, the bank offers specialized services for major industrial and commercial sectors, including project financing, credit lines, and international trade financing services. It also provides solutions to secure financing for government projects and initiatives under Saudi Vision 2030, benefiting from its close relationships with government entities and institutional support. The diversity and evolution of these products reflect National Commercial Bank's ability to meet the changing market demands and enhance its position as a leading provider of financial solutions in the Kingdom.

Recent financial data for National Commercial Bank (SNB) shows remarkable resilience in financial performance, driven by the successful merger with Samba and increased demand for financing in the Kingdom. By the end of 2024, the bank's total assets reached approximately SAR 1.1 trillion, representing about 30% of the total assets of the Saudi banking sector. This figure reflects the bank's financial strength and its extensive presence in the local market, as well as its ability to finance major projects and government initiatives.

In terms of market capitalization, the bank's total value exceeded SAR 220–240 billion in early 2025, making it one of the leading Saudi banks in terms of market value. The paid-up capital is approximately SAR 23.2 billion, distributed over 2.32 billion shares with a nominal value of SAR 10 per share. The price of National Commercial Bank's stock (Tadawul symbol: 1180) fluctuated between SAR 30 and SAR 40 per share during 2024-2025, with an average close to SAR 37–38 at the end of 2024, slightly declining to SAR 34–35 in early 2025, affected by fluctuations in regional and global markets.

In terms of profitability, the bank's price-to-earnings (P/E) ratio was around 14–16 times, based on an annual net profit of approximately SAR 3 per share. This ratio is moderate compared to its peers in the region, indicating investor confidence in the bank's ability to achieve sustainable growth. Regarding cash distributions, the bank approved a dividend of SAR 5 per share for 2023 profits in 2024, representing a cash return of approximately 12–15% based on the stock price, reflecting a generous and sustainable dividend distribution policy.

The bank recorded annual net profits ranging between SAR 25–27 billion for 2024, with a growth rate of 15–20% compared to the previous year. The return on equity (ROE) increased to 15–18%, after being around 12–14% before the merger, indicating efficient capital utilization and effective operational management. These indicators highlight the financial strength of National Commercial Bank and its ability to enhance profits and provide rewarding returns to shareholders.

National Commercial Bank's stock (1180:TASI) is among the most traded and attractive stocks in the Saudi financial market, thanks to its large size and regular dividend policy. The stock experienced notable fluctuations during 2024 and 2025 within the range of SAR 30–40 per share, peaking at around SAR 38–39 in mid-2024, then declining back to SAR 34–35 at the beginning of 2025 due to global market fluctuations and dividend distributions. This price range reflects ongoing investor confidence in the bank, as well as the market's response to local and international economic events.

From a market capitalization perspective, the bank maintained its leading position with a market value of approximately SAR 230 billion at the beginning of 2025. This size gives the stock significant weight within the main indices of the Tadawul exchange, making it one of the leading stocks influencing the overall market movement. It is also noted that the stock enjoys high liquidity due to the broad and diverse shareholder base comprising individuals, institutions, and investment funds.

Regarding the dividend distribution policy, the bank is committed to distributing a significant percentage of its net profits, with distributions for 2024 amounting to SAR 5 per share (for 2023 profits), representing a high cash return compared to most regional banks. Estimates suggest that the bank will continue this policy in 2025, supported by rising profits and an improved operating environment. As for the P/E ratio, it ranged between 14 and 16 times during the period, reflecting a relatively moderate to high valuation, indicating expectations of sustainable future growth.

These financial policies demonstrate the bank's commitment to achieving a balance between growth and distributions while maintaining a strong capital base. Additionally, the stable performance of the stock and high liquidity enhance its attractiveness to investors seeking stability and rewarding cash returns in the Saudi market.

National Commercial Bank operates in a highly competitive and dynamic Saudi banking sector, where a limited number of major banks dominate most of the market share. The total assets of Saudi banks amounted to approximately SAR 3.7 trillion by the end of 2024, reflecting the sector's size and its pivotal role in supporting the national economy. Following its merger with Samba, National Commercial Bank became the largest among Saudi banks, followed by Al Rajhi Bank, Riyad Bank, and SAB, along with a number of specialized banks such as Alinma, Albilad, and Arab National Bank.

The main strengths of National Commercial Bank lie in its substantial capital, high liquidity, wide geographical reach, and diverse banking products that include both traditional and Islamic services. The bank also benefits from its close relationships with government entities, enabling it to provide direct financing for major national projects. On the other hand, the bank faces increasing challenges from the rise of digital banks and fintech companies that offer innovative electronic banking services at competitive prices.

Among the key competitors is Al Rajhi Bank, which focuses on Islamic banking services and has a large customer base, and Riyad Bank, which is distinguished by its support for major corporations, and SAB, which offers international banking services through its partnership with HSBC. Competition among major banks is based on service quality, digital innovation, interest rates, and the volume of credit facilities provided to individuals and businesses.

The dynamics of competition are also influenced by economic factors such as interest rates, liquidity levels in the market, asset quality (non-performing loans ratio), and regulatory frameworks aimed at enhancing transparency and financial soundness. In recent years, the Saudi banking sector has witnessed a wave of digital development and integration between banks and technology companies, alongside government initiatives to support financial inclusion and increase private sector participation in financing projects. Amid this changing environment, National Commercial Bank has demonstrated its ability to maintain its leading position through continuous expansion and the provision of innovative banking solutions that meet diverse customer needs.

National Commercial Bank places great importance on digital transformation and technological innovation as two key elements of its future strategy. The bank recognized early on the importance of technology in enhancing customer experience and improving operational efficiency, investing heavily in developing digital infrastructure and launching advanced banking solutions. Digital initiatives include sophisticated smartphone applications that allow customers to manage their accounts, make transfers, request financing, and pay bills electronically in a quick and easy manner without the need to visit branches.

The bank has also expanded its electronic banking services for businesses, such as digital payment solutions, online cash management, and international e-commerce services. These solutions have enabled Saudi companies to manage their financial flows more efficiently and reduce operational costs associated with traditional banking operations. The bank has also collaborated with fintech companies to provide innovative services, such as digital wallets, electronic payment solutions for stores, and rapid international transfer services.

The bank is keen to keep pace with the latest trends in cybersecurity, having organized numerous initiatives and workshops to raise awareness of information security and protect customer data. The bank has invested in an advanced cyber risk management system, contributing to reducing fraud attempts and digital breaches. Additionally, the bank launched an upgraded version of its electronic application in 2024, which included broader capabilities for managing investment portfolios and submitting financing requests electronically.

The digital transformation of National Commercial Bank is reflected in the increased percentage of banking operations conducted through digital channels and the reduced reliance on traditional branches, leading to improved operational efficiency and cost reduction. This transformation has also enabled the bank to attract a broader segment of young and digital-savvy customers, supporting its competitiveness in a rapidly growing electronic banking market. The bank continues to invest in technology as a key driver of future growth and excellence in banking service.

Offering Islamic banking services is one of the core pillars of National Commercial Bank's strategy, as the bank seeks to meet the needs of a wide segment of customers who prefer financial transactions compliant with Sharia law. The bank has established specialized departments to develop Islamic banking products, such as profit-sharing financing, Murabaha, and Ijarah, in addition to investing in sukuk and Sharia-compliant securities. These departments operate under strict regulatory standards to ensure full compliance with Sharia rules, in collaboration with independent Sharia supervisory bodies.

The bank offers a wide range of Islamic products for individuals, such as Sharia-compliant real estate loans, auto financing, personal financing, in addition to Islamic current and savings accounts. It also provides integrated solutions for companies, including project financing, Islamic credit lines, and commercial financing and international trade services in accordance with Sharia-compliant terms. These products provide customers with diverse options and enable them to achieve their financial goals while adhering to their religious values.

National Commercial Bank leverages its extensive experience in the Islamic banking sector to enhance its competitive position in the Saudi market, especially as demand for Islamic products continues to grow. The bank relies on specialized teams to develop and market Islamic products, continuously updating them to keep pace with changes in Sharia regulations and customer needs. This approach reflects the bank's commitment to financial inclusion and expanding its customer base by offering solutions that meet the requirements of all community segments.

Financially, Islamic products contribute significantly to the bank's income and profits, especially given the rising demand for Islamic real estate financing and government project financing. Additionally, adherence to Sharia standards enhances customer trust and reduces operational risks associated with traditional products. This diversity in products is one of the key strengths of National Commercial Bank in a market characterized by diverse needs and increasing demand for Sharia-compliant solutions.

National Commercial Bank plays a pivotal role in financing major projects linked to Saudi Vision 2030, serving as a strategic partner to the government in supporting economic transformation and implementing national initiatives. The bank has leveraged its leading position and network of relationships with both the public and private sectors to participate in financing massive infrastructure projects, such as the expansion of NEOM, Red Sea projects, and the development of renewable energy and housing sectors.

The bank contributes to providing credit lines and joint financing in collaboration with local, regional, and international banks, enhancing its ability to finance colossal projects that require substantial capital and long repayment periods. It also offers innovative financing solutions that include Islamic financing terms, credit lines, and risk management, in accordance with the requirements of government entities and project executing companies. This role positions National Commercial Bank as a key partner in achieving the goals of the national vision, particularly in diversifying income sources, enhancing sustainability, and increasing private sector contributions to the economy.

In terms of financial performance, the bank's participation in these projects has contributed to the growth of its loan portfolio and increased revenues from interests and fees. It has also allowed the bank to expand its customer base among large companies and institutions, raising its operational indicators. The bank is also keen to allocate specialized teams to manage financing for major projects, ensuring timely completion and effective execution.

The commitment to supporting Vision 2030 projects is part of the bank's long-term strategy, as it seeks to be a trusted partner in achieving the Kingdom's economic transformation. This role also reflects the bank's commitment to national responsibility and promoting sustainable development by financing vital infrastructure projects that create jobs and support long-term economic growth.

Risk management and regulatory compliance are fundamental pillars of National Commercial Bank's strategy, especially in light of the changing banking environment and increasing regulatory scrutiny. The bank relies on a comprehensive risk management framework that includes identifying, assessing, and monitoring various types of risks, such as credit, liquidity, market, operational, and cyber risks. The bank allocates specialized committees and trained teams to ensure the application of best international practices in risk management, benefiting from the expertise of its advisors and its network of relationships with local and international regulatory authorities.

Regarding regulatory policies, National Commercial Bank is committed to implementing the directives issued by the Saudi Arabian Monetary Authority (SAMA) and the Saudi Capital Market Authority, in addition to applying international accounting standards (IFRS 9, IFRS 17) and Basel III requirements for capital adequacy. In recent years, the bank has strengthened its internal compliance systems and activated intensive training programs for employees to ensure full compliance with new regulations and avoid operational and legal risks.

Recent indicators have shown that the bank maintained a high capital adequacy ratio (CAR) of approximately 22% in 2024, exceeding regulatory requirements and granting the bank the ability to withstand economic shocks. It has also successfully maintained low levels of non-performing loans (1–2% of total loans), reflecting the strength of its credit policies and the accuracy of its customer assessments. The bank also adopts periodic stress testing plans to ensure its readiness to face potential recession or financial crisis scenarios.

Enhancing compliance and risk management is a fundamental pillar of the bank's strategy to maintain its financial stability and the trust of shareholders and customers. It also contributes to enhancing the bank's position as a leading banking institution capable of adapting to international standards and local market requirements, ensuring sustainability and long-term success.

The performance of National Commercial Bank is influenced by several local and international economic factors that play a key role in determining its growth trajectory and profitability. Among the most prominent of these factors are interest rates, as the Saudi central bank's rate hikes lead to an increase in the bank's net interest income from loans granted, enhancing its operating profits. Conversely, rising interest rates may increase the repayment burden on individuals and companies, requiring the bank to tighten its credit policies and continuously monitor asset quality.

The bank's profitability also depends on the overall performance of the Saudi economy, including the level of economic activity, employment rates, and stability of oil prices. During periods of economic growth, demand for real estate and commercial financing increases, supporting the growth of the loan portfolio and rising bank revenues. However, during periods of slowdown or economic crises, the bank may face an increase in non-performing loans and higher provisions for doubtful debts.

Regulatory and legislative factors also directly affect the bank's performance, as compliance with international and local standards requires continuous investments in developing systems and procedures. Moreover, increasing competition from digital banks and fintech companies compels National Commercial Bank to invest in innovation and improve customer experience to maintain its market share.

Government initiatives play a positive role in supporting the bank, especially through housing support programs, stimulating financing for small and medium-sized enterprises, and financing major projects under Saudi Vision 2030. Additionally, the stability of the Saudi riyal and government financial policies enhance investor confidence and provide a conducive environment for the growth of the banking sector. Overall, National Commercial Bank possesses the ability to adapt to economic changes, leveraging its financial strength and pivotal role in the national economy.

Recently, National Commercial Bank has witnessed a series of significant institutional developments that have strengthened its position in the Saudi banking market. In 2023, the bank completed its merger with Samba Financial Group to become the new entity named Saudi National Bank (SNB), leading to a restructuring of departments, unification of operational systems, and rebranding. This merger was part of the bank's strategy to maximize operational efficiency and achieve economies of scale, in addition to enhancing its ability to finance major projects and support the national economy.

In terms of financial results, the bank recorded strong profit growth in 2024, with net profits exceeding SAR 25 billion, an increase of 15–20% compared to the previous year, supported by rising interest income and expansion of the loan portfolio, particularly in the housing and government project sectors. The quarterly data for the third quarter of 2024 showed a 30% growth in net income, confirming the strength of operational performance and effective cost management.

The bank continued to launch initiatives for digital transformation, updating its mobile applications and expanding online banking services to include investment portfolio management and electronic financing requests. The bank also announced partnerships with fintech companies to provide advanced electronic payment solutions for stores and customers, as part of enhancing digital innovation and improving customer experience.

In terms of investments, the bank entered into strategic partnerships with regional and international financial institutions and participated in financing massive infrastructure projects under Saudi Vision 2030. It also strengthened its risk management and regulatory compliance policies, raising its capital adequacy ratio to 22%, reflecting its commitment to international standards. Credit rating agencies such as Fitch and Standard & Poor's affirmed the bank's rating at A with a stable outlook, reflecting the strength of government support and the bank's financial robustness. These developments reflect National Commercial Bank's ability to keep pace with market changes and enhance its position as a leading banking institution in the Kingdom.

Despite its financial strength and leading position, National Commercial Bank faces several future challenges that require effective strategies to address. Among the most prominent of these challenges is the increasing competition from digital banks and fintech companies that offer innovative electronic banking services at competitive prices targeting youth and digital-savvy customers. This requires the bank to make continuous investments in digital innovation and improve customer experience to ensure the retention of its customer base and growth in market share.

Challenges also include regional and global economic fluctuations, such as volatility in oil prices, rising inflation rates, and changes in interest rates. These factors may affect customers' ability to repay loans, necessitating the bank to tighten credit policies and increase provisions for doubtful debts. Additionally, the increasing regulatory scrutiny, especially regarding capital adequacy and international accounting standards, requires the bank to enhance its internal systems and ensure full compliance with new standards.

Conversely, economic growth in the Kingdom, especially due to Saudi Vision 2030 projects, presents significant opportunities for National Commercial Bank to expand in financing major projects, support emerging sectors, and increase financial inclusion. The rising demand for Islamic banking products also represents an opportunity to enhance the bank's market share, leveraging its extensive experience in this field. Digital transformation also provides the bank with an opportunity to expand its customer base, improve operational efficiency, and reduce costs.

Regional and international expansion represents one of the future opportunities for the bank, especially in Gulf and Levant markets, through strategic partnerships and well-considered investments. Additionally, continued government support and financial stimulus policies enhance the bank's ability to face challenges and seize available opportunities. Overall, National Commercial Bank possesses the tools and capabilities necessary to achieve sustainable growth and enhance its position as a leading financial institution in the region.