Al Rajhi Bank shares surged to a record after the second-biggest Saudi Arabian lender rolled out a $4 billion plan to grow its business.
The Riyadh-based bank will offer 3 bonus shares for every 5 held, according to a statement. That will raise its capital to 40 billion riyals ($10.7 billion) from 25 billion riyals and will “contribute to good growth ratios in the upcoming years,” it said.
Al Rajhi rivals include Saudi National Bank, which snatched the top spot as the kingdom’s biggest lender by assets after a combination with Samba Financial Group. Last week, Al Rajhi reported full-year profit that beat analysts’ estimates, citing a rise in income from financing and investments, and fees from banking services.
The shares climbed as much as 7.1% to 169.8 riyals, the highest on record. That helped push the benchmark Tadawul All Share Index to a gain of about 1% on Sunday.
Al Rajhi has a market capitalization of about $110 billion, higher than that of Saudi National Bank. But it trails the latter with assets of $155 billion compared with $243 billion of its rival.
Al Rajhi Bank market insights:
- Al Rajhi Bank trades at 24 times its estimated earnings per share for the coming year
- The company’s dividend yield is 1.4% on a trailing 12-month basis and 1.9% based on Bloomberg Dividend Forecasts for the next 12 months
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