LEADING THROUGH
INNOVATION
AND CUSTOMER EXPERIENCE
2020 Annual Report
Net Profit before Zakat amounted to SAR 1,502 million, while Operating Income was SAR 4,262 million
Increase in customer registration on online channels
Increase in Mobile Banking transactions volume
Increase in account opened digitally over the same period last year
Training seats
Hours of training delivered
Customer complaints addressed
This year’s Annual Report shows how our digital drive and heavy investment in employees and customer service is paying dividends – as we enjoyed growth and solid performance across all our business lines in 2020.
Our dynamic structure supports robust and efficient operations as well as effective compliance and risk management. It is the framework within which we have boosted and diversified our revenue streams through initiative and innovation.
Our engaged and motivated employees are our biggest asset – and the key to our sustained success. Our knowledge transfer culture, focus on employee wellbeing and career development programs are developing the Bank’s future leaders, and we have rapidly become an employer of choice.
Greater emphasis on delivering excellence in customer service has positioned us well to take further market share. Our steady progress towards these strategic objectives and goals has made us a genuine force in the market and has placed us firmly on the road to solid and sustainable growth.
All praise due to Allah, and peace and blessing be upon the Prophet of Allah, his family and all his companions.
On behalf of my colleagues, the members of the Board of Directors and its committees, our executive management, and our ambassadors, we mourn the passing of His Excellency the former Chairman of the Bank’s Board of Directors, Abdulrahman Bin Ibrahim Alhumaid, who passed away before the issuance of this report. We extend our deepest and most sincere condolences to his family and loved ones and wish them the fortitude to bear this great loss. We ask God to bless him for all his contributions to the Bank, the financial and banking sector, with his abundant knowledge and experienced management during his term as Chairman of the Board of Directors, which had positive effects on the Bank’s family, its growth and the distinction of its results.
On behalf of the Board of Directors, I am pleased to present the Annual Report and audited Financial Statements for Bank Albilad for the year ended 31 December 2020. Our financial results illustrate what the Bank has achieved, once again recording a strong annual performance. It has further distinguished its market position as a leading Islamic bank, through innovation, improving customer experience, and meeting their aspirations. The total operating income increased by 8% compared to 2019 to reach SAR 4,262 million, with net profits before Zakat of SAR 1,502 million.
There is a continuing, strong trend towards digitalizing the financial services sector in the Kingdom and the world, accompanied by evolving customer demands and increased competition from Fintech. We are embracing the challenge to continue, as we have been proactive in the field of digitizing banking operations and products and to stay ahead of the curve and capture further market share. This required enhancing and accelerating the process of digital transformation and developing the skills of our ambassadors to deliver the highest levels of customer experience. It lies at the heart of our strategy and has gained significant momentum in the financial year 2020. We continued to build value for our shareholders and investors with a steady focus on gaining more market share across various activities and businesses by creating new revenue streams, complemented by strong digital capabilities, highly qualified and trained employees, and exemplary customer service.
Operating conditions in 2020 were challenging, with the COVID-19 lockdown, lower oil prices and the VAT increase. The Saudi Central Bank, to overcome the economic challenges of the pandemic, provided strong support to the Kingdom’s SME sector through effective stimulus packages.
As we head into a new year, we look forward to postpandemic recovery, especially with the launch of the vaccination campaign, and we hope that the various sectors of the economy will head towards a full recovery.
Bank Albilad is a deep rooted, agile banking entity that adopts the latest digital solutions. The Bank seeks to achieve sustainability and sustainable development through its strong participation in supporting the government’s social and economic development programs under the framework of Vision 2030. These programs stimulate the development of the national economy and improve the quality of life across the Kingdom, allowing the Bank to tap into available opportunities and gain competitive advantages. As such, we continue to strengthen our relationships with government agencies to develop high quality products that support SMEs and serve housing initiatives through mortgage financing, while supporting government efforts in raising awareness around financial literacy. We are also working to improve our social responsibility by focusing on environmental and social factors through various initiatives across our activities, services, facilities, branches and departments.
Our performance and results have proven that the circumstances of the COVID-19 pandemic did not prevent us from continuing the path towards achieving our goals. The Bank worked to challenge these difficult circumstances and turn them into opportunities for excellence and proficiency, and this has reflected positively in our financial results. Our resources and human capital have been able to perform banking operations remotely at a rate that sometimes exceeds 90%, which is a promising indicator that we have been successful in furthering our digital transformation strategy in business and operations.
It was with immense pride that we witnessed how the Bank successfully responded to the consequences of the COVID-19 pandemic. It not only stood firm but exceeded expectations and continued to grow during this difficult period. This was a true test for the major investment we have made in our human capital and our digital technology infrastructure in the past few years. Thanks to the efforts of our executive management, our ambassadors, their commitment to excellence, their continuous dedication, and their strong contribution to the distinguished position that the Bank is in today. At the end of 2020, we worked to update the Bank’s mission and goals in line with its vision to achieve our ambitions and the aspirations of our customers, shareholders, and all stakeholders. We strive to be “the bank of choice in providing innovative Islamic banking solutions.”
The Bank seeks to achieve sustainability and push further development through its strong participation in supporting the government’s social and economic development programs under the framework of Vision 2030.
On behalf of the members of the Board of Directors, and all ambassadors of the Bank, I raise to the position of the Custodian of the Two Holy Mosques and his faithful Crown Prince – may Allah protect them – many thanks and gratitude for the support, guidance, and wise care of the financial and banking sector, and all political, economic, and social activities to achieve growth and prosperity of the Kingdom, its citizens and its residents.
Further, I would like to express my gratitude to the Ministry of Finance, the Saudi Central Bank, the Ministry of Commerce, and the Capital Market Authority, for their support in the financial and banking sector in the Kingdom through regulation, legislation and oversight, in a way that guarantees its stability.
I extend my sincere thanks and gratitude to all the Bank’s shareholders, investors, partners and customers for their further strengthening loyalty and support. I look forward to the continuation and growth of this relationship by providing banking services with peace of mind through a package of integrated products and services that meet the needs and desires of our customers.
Ladies and Gentlemen, Bank Albilad Shareholders, Peace be upon you.
The global COVID-19 crisis brought severe disruption to business operations in 2020. Bank Albilad met these challenges head on. Backed by a robust digital infrastructure, we successfully navigated the sudden acceleration and upsurge in the usage of e-channels. Moreover, the Bank’s continued training and development of its agile and highly competent workforce, ensured we swiftly adapted to remote working, achieving excellent operational and financial results.
The government initiatives, policies, and support and together with the guidance from the Saudi Central Bank were crucial in helping us tackle the challenges brought about by the pandemic.
Change is ingrained in our culture. This mindset enabled us to adapt quickly to immediate challenges and threats brought about by the pandemic. More importantly, we did not lose sight of our vision to be the preferred choice of innovative Islamic banking solutions.
This was a year of continued digital transformation. Bank Albilad solidified its position as an Islamic bank that is breaking new ground through innovation and customer experience while further advancing employee satisfaction.
We steadily gained market share during the year and our business lines performed very well across the board. We successfully captured market opportunities in Treasury and project finance – and our involvement in large transactions helped grow our corporate banking portfolio. The Bank’s Net Income grew 8% to SAR 1,502 million before Zakat, compared to SAR 1,387 million before Zakat the previous year. This was achieved on the back of the growth in Total Operating Income, which improved by 8% to SAR 4,262 million, resulting primarily from the increase in Investing and Financing Income of 17%. The Bank’s Total Assets grew by 11% to SAR 95,744 million, as Investments and Financing expanded by 35% and 18%, respectively while Deposits were up by 7%. We continue to create value for our shareholders, and this is reflected in our Return on Equity after zakat, which reached 13.4%.
Our customer experience delivery is excellent. Customer experience is a key differentiator for Bank Albilad – and has positioned us well for sustainable success. To continue to deliver on this over the long term, we remain focused on enhancing our customers’ experience. We have done tremendous work in terms of improving the customer journey, which has acquired more business and increased our market share. To this end, we carried out extensive training programs with branch staff in 2020, focusing heavily on augmenting our after-sales service. We committed extra resources to increase capacity in customer social engagement and at our call centers.
Our substantial investment in technology is delivering major benefits to our stakeholders and customers. This has led to a significant improvement in our brand perception. We are delighted to be recognized among the 10 best improved brands in Saudi Arabia in the YouGov Brand Index. Our brand positioning was further cemented with the remarkable response to our special edition National Day Cards. We are reaping the benefits of migrating our business to digital, strengthening our brand and allowing us to capture more market share.
In the process, the Bank has received several awards in the field technology like the Excellence in Innovative Banking Award and Best Mobile Banking Solution Saudi Arabia.
Our employees are the backbone of our business. Having the best and the brightest on board is a key driver of our continued growth. Our people play a critical role in delivering our digital transformation and in 2020 we made considerable progress in equipping them with the skills required for the workplace of the future – and to deliver change more effectively via dedicated technical training programs.
Employee experience and satisfaction is another key focus for the Bank. We have established a reputation for talent development and creating future leaders for the business. During the year, many of our people took advantage of the myriad of courses available at Albilad Academy. We are also embracing new ways of working – and the pandemic accelerated a remote working program that will allow us to tap talents across the Kingdom.
We care for our employees and we want to help them with their future, as much as we can. We provide childcare allowance to our female ambassadors in appreciation of the role they play in balancing children care while carrying out their job responsibilities. We have also launched the Employee Savings Plan (Hafedh) for all our ambassadors.
Our employees are the backbone of our business. Having the best and the brightest on board is a key driver of our continued growth.
We value our employees’ family connections. Prior to the pandemic, we held a very successful Albilad Family Day in February 2020 where around 1,500 family members attended.
Cyber threats and attacks are major issues for businesses. Cyber security and data protection are therefore of the utmost importance to the Bank – and on which there is no compromise. We take a highly rigid approach to cyber security with multiple resources employed in this area and the very latest in security software.
Another important element of our security is the stability of our digital infrastructure. During the year, we undertook multiple business continuity planning exercises. These involved successful comprehensive recovery tests on all mission-critical IT operations.
Our ability to create value for our stakeholders lies at the heart of our success. We will accomplish this through our strategy to increase market share through organic growth via diversification into new revenue streams. We will also create enhanced product offerings, for a wider choice of advanced and sophisticated Islamic banking solutions.
The regulatory support we receive from the Saudi Central Bank is paving the way for new banking sector opportunities. With solid government backing for SMEs and a major drive towards Saudi home ownership, the Bank is committed to supporting these initiatives. Our current product offerings are well positioned to take advantage of these opportunities. More importantly, the stimulus packages and programs extended by the Saudi Central Bank to the Bank and its customers helped overcome the challenges caused by the pandemic.
Looking further ahead, agent banking will allow us to complement our physical presence in certain locations thus giving the public greater access to banking services. We are poised for the next growth chapter and look forward to finding new opportunities in Treasury and syndication, further expanding our Enjaz remittance business and increasing market share.
On the ESG front, Bank Albilad continues its engagement in numerous social and environmental initiatives and programs under its Corporate Social Responsibility Program #Albilad_Mubadara supported by the Bank’s ambassadors’ volunteering work, which played a significant role in the success of these initiatives and programs.
Our Head Office building is now partially powered by renewable energy after equipping the building with solar panels, in a way, helping reduce carbon footprint.
A high-quality customer experience extends into the creation of personalized customer propositions. Financial literacy is a significant social responsibility, and in a market first, Bank Albilad initiated savings schemes for education and longterm healthcare for our customers. Our latest initiative with corporates is a savings scheme that will make a direct debit from employees’ salaries.
I would like to extend my gratitude to the Board of Directors for their guidance, counsel, and support in the pursuit of our strategic objectives.
My deepest thanks go to our employees for their hard work and contribution throughout the year. I would particularly like to commend the way in which our employees pulled together during the global pandemic; it is their dedication and commitment that ultimately enables us to succeed.
I express my sincerest gratitude to the Custodian of the Two Holy Mosques and the Crown Prince – may Allah protect them – and the Saudi Central Bank for their steadfast support to the national economy and the banking sector.
With a strong proposition around customized solutions, we have solidified our position as a key institution providing Islamic banking solutions.
Our continual efforts to stimulate growth and innovate has been a cornerstone of our success.
Customer centricity is in our DNA. Our continual investment in enhancing customer experience keeps.
Our most important asset are the people who make our growth path possible. Our training and development enable career progression and operational efficiency.
Our strategy is weaved around optimum efficiency across the business and decisions.
We continue to deliver returns to shareholders and long-term value for investors.
Our ongoing commitment to customers have made us a part of their personal and professional journey.
We have been able to engage with employees and create a highly motivated and capable workforce.
Bank Albilad’s strategy is centred on leveraging banking channels, network and expertise among the Bank’s employees to support our sustainable growth and boost our revenue streams.
To be the preferred choice of innovative Islamic banking solutions
To leverage digital transformation, network, and human capital to deliver the highest levels of customer experience and competitive value propositions in the best interests of our clients, employees, shareholders and the communities we serve
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