Al Rajhi Bank SWOT Analysis, USP & Competitors

Posted in Banking & Financial Services, Total Reads: 2800
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SWOT Analysis of Al Rajhi Bank with USP, Competition, STP (Segmentation, Targeting, Positioning) - Marketing Analysis

Al Rajhi Bank

Parent Company

Al Rajhi Bank

Category

Regional Banks

Sector

Banking and Financial Services

Tagline/ Slogan

Local vision, international expertise

USP

Saudi Arabia’s largest sharia-compliant banking group offering sharia-compliant products

STP

Segment

Retail banking, corporate banking, treasury banking and investment and brokerage services

Target Group

Individuals, Small, medium & large enterprise looking for diverse financial solutions

Positioning

Saudi Arabia’s largest sharia-compliant banking group, instrumental in bridging the gap between modern financial demands and intrinsic values

SWOT Analysis

Strengths

1. It is one of the largest Islamic Bank of the World with total asset of USD 60 Billion
2. Al Rajhi is one of best-known family businesses with nearly 600 branches across the oil-rich kingdom, a sixth of which are dedicated to female customers in the gender-segregated society

3. The bank has also expanded into Malaysia, the world’s Islamic finance hub, as well as Kuwait and Jordan

4. It won the Asian banker of the year for Retail and Corporate Banking

5. It has the largest retail network and occupies nearly half of the retail sector’s profits and has over 7500 employees

6. The bank’s cheap cost of funds, which is a consequence of its large interest-free deposit base, has given it a place among the most attractive Saudi stocks

Weaknesses

1. The bank had been accused of being involved in funding illegal activities by a US Senate committee, thrashing its reputation
2. Rapid credit growth exerted excessive pressure on Al Rajhi's capital position
3. Given the limited use of variable components in compensation, costs tend to be sticky and of low flexibility across the cycle

Opportunities

1. Strong net profit growth on the back of a surging economy, fuelled by high oil prices, which has boosted lending, deposits and deal activity

2. Bank sector lending to private companies in Saudi Arabia still grew at a rate of 15 percent year-on-year
3. Increased retail lending can be a key driver of the Al Rajhi's overall loan growth

4. International expansion likely to bolster revenues, the bank should try to expand its presence in overseas markets

Threats

1. In the past quarters, the competition has increased significantly from both Islamic and conventional players
2. If the bank's reputation were to be damaged on account of allegations made by US Senate, it can lower down its ratings

3. The lending environment in Saudi Arabia intensely competitive between a small number of local banks, and means that while banks will be able to book new assets, margins will be tight

Competition

Competitors

1. The Saudi British Bank

2. Saudi Hollandi Bank

3. Riyad Bank

4. Arab National Bank



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