Al Rajhi’s share jump isn’t just another TASI rally

Al Rajhi’s share jump isn’t just another TASI rally

MOSCOW/RIYADH/CAIRO: When the Saudi stock market index sees a rally, usually most shares get an increase in value. However, this isn't the case for Al Rajhi Bank. Al Rajhi Bank, whose shares on Sunday recorded their highest level since April 2006 at SR135.20 ($36.05), is in a league of its own among all Gulf Cooperation Council Islamic or Shariah-compliant banks. "Al Rajhi Bank has been showing significant earning growth (double digit) despite the negative impact of economic lockdown last year, and many analysts still see the double digit growth continuing this year which explains the rise of the stock price ahead of the third quarter earnings announcement,” Mohammed Al-Suwayed, CEO of Razeen Capital told Arab News. Islamic banks and conventional banks usually have almost the same quality of assets in the GCC; non-performing loans (NPL) ratio in Islamic banks was 3.5 percent in 2020 compared to the slightly higher 3.8 percent for conventional ones according to S&P Global. This also applies to the coverage ratio. Thus, differences between the two types of banks as a whole are sometimes brushed off. However, the Islamic Al Rajhi Bank has been experiencing a solid and steady performance compared to other banks in the