Al-Rayan Bank H1 2025: Significant Drop in Financing Income, but Other Drivers Led to Modest Net Profit Growth

• Al-Rayan Bank experienced a significant drop in net income from financing activities, declining by 15% year over year. Net income from investing activities showed healthy growth, rising by a solid 18% compared to the previous year.

• Shareholders of Al-Rayan Bank witnessed a sharp decrease in the company's share price in H1 2025, with a decline of 5%.

• Profits continued on a growing trajectory despite a drop in financing income, thanks to an increase in other income sources and reduced impairment adjustments.

Throughout H1 2025, Al-Rayan Bank's stock experienced a notable 5% decline, starting at 2.46 riyals per share and ending the year at 2.33 riyals per share. Notably, insider activity was remarkable during this period, with total purchases amounting to 6 million QAR.

Here are the key numbers:

● Net income from financing activities: 3,121 million QAR vs. 3,666 million QAR in H1 2024 (a 15% YoY decrease).

● Net income from investment activities: 1,073 million QAR vs. 1,015 million QAR in H1 2024 (a 6% YoY increase).

● Net Profit: 832 million QAR vs. 802 million QAR in H1 2024 (a 4% YoY increase).

● Earnings per Share: 0.088 QAR/share vs. 0.085 QAR/share in H1 2024 (a 4% YoY increase).

In a significant turn of events, Al-Rayan Bank's performance in H1 2054 revealed a slight increase in the ratio between operating income and the combined returns to unrestricted investment account holders and finance expenses. This key ratio increased from 1.57 in the preceding year to 1.59.

The bank's financial performance was significantly impacted by a sharp decline in income from financing activities, which was the primary contributor to a drop in net profit, bringing it down to 545 million QAR. In contrast, income from investing activities recorded a notable improvement, adding 58 million QAR to the bottom line and partially offsetting the decline. Additionally, the bank benefited from a reduction in investment account distributions and finance expenses, which provided further support to profitability by 246 million QAR and 58 million QAR, respectively. Despite these mitigating factors, the overall results reflect the bank’s ongoing struggle to maintain profitability amid shifting market dynamics and broader economic pressures.

In addition to gains from financing and investing activities, net profit was further supported by a 45 million QAR increase in income from commissions and fees—reflecting stronger transactional activity or service-based revenue—and a 132 million QAR reduction in impairment adjustments, indicating improved asset quality or lower credit risk provisions.

For more comprehensive information, please refer to the reliable financial information source, http://sahmik.com.