Al Rajhi Bank Enhances Investment Appeal with SAR 7 Billion Dividend Recommendation for H2 2025

Riyadh | EcoPulse24

Al Rajhi Bank's Board of Directors has recommended distributing a cash dividend of SAR 7 billion to shareholders for the second half of fiscal year 2025, highlighting the bank's strong financial standing and ability to generate sustainable cash flows. According to the official announcement on the Saudi Stock Exchange, each share will receive SAR 1.75 after zakat, equivalent to 17.5% of the nominal share value. Eligibility will be determined by shareholding at the close of trading on the day of the general assembly, with the date to be announced later.

With this recommendation, Al Rajhi's total proposed cash dividends for 2025 reach SAR 10 billion, or SAR 2.50 per share - 25% of nominal value - following a SAR 3 billion distribution for the first half of the year. The bank confirmed it has obtained the Saudi Central Bank's non-objection to the board's recommendation. Details regarding the payment date and mechanism will be disclosed after general assembly approval.

Dividends for non-resident foreign investors are subject to a 5% withholding tax under the income tax law, with potential exemptions for qualified investors who submit the required documents within the eligibility period.

EcoPulse24 Analysis:
Al Rajhi's sizable dividend recommendation demonstrates management's confidence in sustainable profitability and a strong balance sheet, especially in a banking environment marked by varying growth and margin levels. The dividend policy boosts the stock's appeal to income-seeking investors and may support the share price, given its significant weight in the TASI index. Distributing 25% of nominal value in one year signals the bank's ability to balance rewarding shareholders, maintaining comfortable capital adequacy ratios, and funding future growth without financial strain. This reinforces Al Rajhi's status as a leading dividend stock in the Saudi market and supports continued institutional investment flows, particularly from funds seeking stable cash returns amid shifting interest rate expectations.

Conclusion:
The current dividend policy reflects a mature business model and adds a defensive dimension to the stock, enhancing its medium- and long-term investment appeal within the Saudi banking sector.