Alinma Bank is a relatively new bank with substantial capital. It was founded in 2006 and began public work in 2008. Currently, it has 146 branches and four divisions: Alinma Investment Company, Al-Tanweer, Alinma, and Alinma Tokio Marine.
Alinma Bank’s shareholders include the Saudi Arabian Government Investment Fund (PIF), the Saudi Government Pension Agency (PPA), and the Saudi General Insurance Organization (GOSI). They make up 30% of the bank’s share capital, all with equal shares.
The bank provides various types of retail, corporate banking, and investment services. Serves its clients through a nationwide network of branches and ATMs, as well as through its alternative channels: Alinma Internet, Alinma Phone, Alinma Mobile. Some services provided by Alinma Bank:
Murabaha is an Islamic financial structure that avoids interest rate transactions. The intermediary and the potential buyer agree on the sale price, including the agreed profit for the intermediary.
Bai Al-Ajel – facilitates the financing of working capital when a partner agrees to pay off the principal amount plus the amount of profit on time.
Forward Ijara – the sale of a specific underlying asset that is currently being manufactured or built for future delivery.
The strategic goals of the bank are consistent growth. Business plans are aimed at achieving the financial success of partners and shareholders.
Alinma Bank Principles
The service and financial system of the bank are based on Sharia rules or the so-called Islamic banking. This distinguishes Alinma Bank from its competitors and makes it attractive for partners who see this as steady income growth.
Islamic banking law prohibits mortgage interest, speculation and futures transactions. Alinma Bank is engaged in project investment: does not receive interest, studies a client, offers a business strategy, and analyzes risks.
The Bank believes that Islamic values should form the basis of relations with partners. Alinma Bank’s guiding principles are also innovation and excellence.
The company’s policy is aimed at combating money laundering and terrorist financing. The bank focuses its work on risk assessment; therefore, any negative aspects associated with the client are carefully evaluated and analyzed.
Alinma Bank Advantages for Traders
The main advantage of the bank is the ability to buy shares without risk.
There are many reasons to think so:
- For the first half of 2019, Alinma Bank’s net profit grew by 21% and reached RR 1,459 million.
- Dividends on shares increase. Now they are equal to 22.3%.
- The bank is on the 4th line of the rating of the largest IPOs. It is USD 2,8 billion. Since the public offering, the value of the shares has increased by 81%.
- The return on equity is increasing. It remains to wait for the bank to report profit growth of about 14% in the next couple of years.
- Alinma Bank’s loan portfolio is growing. As of June 30, 2019, it amounted to 87,7 billion riyals, an increase of 7%. Until 2020, it can reach 10% of the total average annual growth rate.
- Earnings per share during the six months of 2019 rose to SAR 0.98, before sunset and 0.88 after.
- Client’s deposits in 2019 amounted to 92,8 billion, an increase of 4%.
- In 2017, the bank’s net interest margin improved, and the ratio of costs to income decreased to 42%.
- In 2019, the shares of Alinma Bank rose by 18.4 %.
- The exchange Bank achieves 3rd place in the rating purchase 4th place for sale and 6th place on hold.
Over the past decade, the bank has been awarded national and international awards more than once. Only in 2019, there were four of them: “The best digital banking service for clients” (World Union of Arab Banks, 2019), “Excellent Islamic Banking” (Finnovex, 2019), “Islamic Bank of the Year KSA” (The Banker, 2019), “CEO of the Year” (Global Islamic Finance Awards, 2019).
In July 2019, Alinma Bank’s CEO, Abdulmohsen Al-Fares, delivered a speech at IFLP, the Cambridge Islamic Finance Leadership Program.
As you can see, in Alinma Bank, there is steady financial growth, which corresponds to its strategy and plan, and for traders is an excellent opportunity to invest and make a profit.
