Al Rajhi Bank SWOT Analysis, Competitors & USP

Published by MBA Skool Team, Last Updated: April 26, 2020

Al Rajhi Bank SWOT analysis evaluates the brand by its strengths, weaknesses, opportunities & threats. In SWOT Analysis of Al Rajhi Bank, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.

SWOT Analysis is a proven management framework which enables a brand like Al Rajhi Bank to benchmark its business & performance as compared to the competitors, and make strategic improvements. Al Rajhi Bank is one of the leading brands in the banking & financial services sector.

The article below lists the Al Rajhi Bank SWOT, competitors and includes its target market, segmentation, positioning & USP. Let us start the Al Rajhi Bank SWOT Analysis:

SWOT Analysis of Al Rajhi Bank

For Al Rajhi Bank, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position.

Al Rajhi Bank Strengths

The strengths of Al Rajhi Bank looks at the key aspects of its business which gives it competitive advantage in the market. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Below are the Strengths in the SWOT Analysis of Al Rajhi Bank :

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

Al Rajhi Bank Weaknesses

The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Here are the weaknesses in the Al Rajhi Bank SWOT Analysis:

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


Al Rajhi Bank Opportunities

The opportunities for any brand can include areas of improvement to increase its business. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. Following are the opportunities in Al Rajhi Bank SWOT Analysis:

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

Al Rajhi Bank Threats

The threats for any business can be factors which can negatively impact its business. Some factors like increased competitor activity, changing government policies, alternate products or services etc. can be threats. The threats in the SWOT Analysis of Al Rajhi Bank are as mentioned:

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


Al Rajhi Bank Competitors

There are several brands in the market which are competing for the same set of customers. Below are the top 4 competitors of Al Rajhi Bank:

1. The Saudi British Bank

2. Saudi Hollandi Bank

3. Riyad Bank

4. Arab National Bank

Hence this concludes the Al Rajhi Bank SWOT analysis.

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About Al Rajhi Bank

Al Rajhi Bank Overview
Parent Company

Al Rajhi Bank

Category

Regional Banks

Sector

Banking & Financial Services

Tagline/ Slogan

Local vision, international expertise

USP

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

Al Rajhi Bank STP
Segmentation

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

Target Market

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


This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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