The Al Rajhi Bank

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1 The Al Rajhi Bank Student’s Name Institution Date

THE AL RAJHI BANK 2 The Al Rajhi Bank based in Saudi Arabia is ranked as the largest Islamic bank in the world by capital. The bank was initially established in 1957 as an exchange house and changed into a bank in 2006. The bank was founded by Mohammed Abdul-Aziz Al Rajhi and his brothers. The bank is a key stakeholder in Saudi Arabia’s businesses. Additionally, it is one of the biggest joint stock corporations in the Saudi Arabian kingdom. The Al Rajhi bank has over 600 outlets, with its head office situated in Riyadh. The bank also has branches in Jordan and Kuwait. The bank is traded on the Saudi Arabian Stock Exchange, with 75% of its stakes publicly owned. The bank launched in Malaysia in 2005, which signified its first venture into international banking. The bank offers its services through various channels at the convenience of its clients. The bank operates under its mission, to be the most prosperous bank revered for its innovative service, technology, people, and sharia compliant products both globally and locally. The bank’s vision is to be a trusted leader providing innovative financial solutions to improve the quality of people’s life everywhere. The bank aims to attain both its vision and mission as guided by its core values, which places the clients at the heart of all its activities (Ramady, 2021) . These values include; integrity and transparency, which entails being honest and open while upholding the highest principles of corporate and individual ethics. A passion to serve, the bank addresses its consumers’ needs to provide results that surpass expectations. The bank is solution oriented, helping its clientele attain their objectives through efficient resolutions. Innovativeness, by cultivating imagination and promoting creativity for better outcomes. Meritocracy, through outlining, differentiating and emphasizing excellence in individuals. Care for society, by contributing to a better tomorrow. Modesty and humility, being humble in word, thought and actions.

THE AL RAJHI BANK 3 The Saudi vision 2030 is a planned framework to minimize the country’s dependency on oil, expand its economy, and enhance public utility sectors like infrastructure, health, tourism, education, and recreation. The Al Rajhi bank has offered support by aligning with the Saudi vision 2030. Some of the ways the bank has aligned with the Kingdom’s vision 2030 include; setting its focus on the housing sector. One major goal of the vision 2030 is to ensure that 70% of the population owns their own homes. The Al Rajhi bank has therefore, offered its support by financing the development of new housing schemes in Jeddah and Riyadh, which aims to give 15,000 residential units (Alqahtany, 2020) . The bank introduced a real estate program in collaboration with the Real Estate Development Fund (REDF), and the Ministry of Housing (MOH), resulting in a positive influence on real estate financing. The fund, also created on the basis of the Murabaha standard, financially supports customers that meet the credit conditions of the bank. Thus, the bank will buy the property fully on the client’s behalf, REDF pays the bank a down payment, on the client’s behalf. Additionally, another goal of the vision 2030 is to unlock the full capability of the SME sector within the country by addressing the difficulties that SMEs face, and by concentrating on initiatives to increase SMEs’ size segment. The Al Rajhi banks aims to support in realizing this Vision 2030 goal by offering the SMEs any data and information they need to come up with strategic ideas for extensions across market has and client sectors, as well as offer guidance and support required to enhance and manage their businesses more efficiently (Hayat, & Khan, 2021) . Additionally, the bank aims increase its support for the growth of SMEs by facilitating several lending platforms, and offering more capital for the sector. Other changes that the bank should make to align with the objectives of the Saudi vision 2030 include; focusing on cash managing services for SMEs to meet the needs of businesses like retail and cash-heavy sellers.

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THE AL RAJHI BANK 4 Emphasizing automation in the banking service, through a digital forum for consumers to interact and meet their banking needs. In order to keep up the pace with the vision 2030, the Al Rajhi bank has launched a financing product for local supplies in the country through a forum for its clientele in the business sector. The product fulfils the desires of consumers to offer local supplies, which increases value to current local products. The product is also in line with the Kingdom’s Central Bank’s initiative to localize products and improve local material enclosed in the Financial Sector Development Document, one of the vision 2030 agendas. The product permits customers to directly sell through the medium or allow the bank to sell it on their behalf. The product is projected to contribute to the growth and organization of work tools in the local market, reducing threats and uncertainties of random problems in operations (Schulkes, 2021). As a result, the product aims to increase the effectiveness on performance and offer protection to the transacting parties. The platform is committed to the idea of an open market, which guarantees that there are no regulations. The platform is founded on a new and ground-breaking idea of, the allocation of products traded in the operations of bank Murabaha to the open market, without passing through intermediaries (Ramady, 2021) . Its aim is to be an actual market, which supports the economy, and attains legality in its operations, while reducing the risks of price increment, and embracing the idea of a market maker that buys products when there is no customer for them. Some of the things that the bank should do at the external level include; forming mergers with another financial lender, the Malaysian Industrial Development Finance (MIDF). The merger will result in a substantial gain to both the banks, and MIDF would convert into a developed Islamic bank. Additionally, it would be a great gain for the MIDF as it will be able to grow into new sectors like the digital banking and also promote new investment product. In so

THE AL RAJHI BANK 5 doing it will positively impact the less profitable banks in the country and result in more cash flow, ultimately discouraging the government to seek financial help from external lenders who are not in the kingdom of Saudi (Hayat, & Khan, 2021) . Additionally, the mergers of digital-only and e-banking banks will lead to the tapping in into the hard to reach places. Through mergers, the bank will be able to fund mega projects like the vision 2030 as well as increase costs and increase interaction, while also maintaining flexibility and stability of the financial system. Action plan refers to a list of all the necessary tasks required to be done in order to accomplish a certain goal. Some of the action plan tools that can be used by the Al Rajhi bank include; leverage analysis. This action plan entails the bank shaping methods of influencing the players in regards to the proposed changes of a merger . By merging with the Al Rajhi bank, the proposed banks stand to profit from economies of scale and enhanced capabilities to raise money at competitive rates ( Mondore, Douthitt, & Gentry, 2019). Thus being the major stakeholder, the Al Rajhi bank can leverage on the wide scope of its other stakeholder banks and in so doing it will be able to grow due to the large Muslim population. Additionally, by merging with the Al Rajhi bank, MIDF, would use the connected cost and revenue to increase its profitability. Another action planning tool used by the bank in its merger is the training and development tools. This refer to the tools linked to the design and delivery of educational creativities that enhance knowledge and capability of employees to effectively perform their duties given the changes encountered ( Moez, & Abdelheq, 2020) The bank aims to train its workers through initiatives that support the values and expanding goals due to processes change. Training ensures that the workers are up to date with the new changes and regulations imposed as well as their responsibilities in enhancing the success of the change processes. Additionally, training ensures that employees and customers are educated on their privacy and security

THE AL RAJHI BANK 6 responsibilities. Training keeps the workers up to date with the changes in the business sector and as such making the workers competent and capable to handle any challenges they may encounter. Communication plays a crucial role in the effective implementation and success of action planning tools. The bank encourages a culture of open communication with all its workers, especially during the change process. This is because through communication employees are able to engage and also recognize the areas within the changes that require further attention (Deszca, & Ingolis). Different communication methods are used including; focus discussion groups, pulse surveys, roadshows, and an online workers communication portal. Some of the roles communication plays in the change process include; it sets to sell top management, in the pre- approval stage. Through communication the major player, the Al Rajhi bank is able to make its agendas known to the other stakeholders. Hence they are able to effectively communicate and brainstorm and reach an amicable decision that is acceptable to all parties involved. During the developing the necessity for change stage, communication plays a crucial role for the major stakeholder to explain the importance of change, persuade the workers and also clarify the steps involved in the change process. The stakeholders and employees thus become aware and can raise questions in cases where they may need some further clarification (Deszca, & Ingolis). This ensures that before making a decision, all parties involved are aware of their roles and responsibilities towards making the change process a success. The mid-stream change phase entails communicating to inform the stakeholder and employees of the progress within the change processes, as well as to attain feedback on any issues. Additionally in this stage, major players use communication to challenge any misconceptions that workers may have regarding the change process. Questions that stakeholders may have are answered. The new organizational

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THE AL RAJHI BANK 7 structure and systems are also shared among the stakeholders and employees. The final stage in the change process is called the confirming the change stage. In this stage communication plays a vital role in informing the workers of the success in the change process, and the need to prepare for the next change. Communication is an important tool to the stakeholders and it impacts them in different ways including; it ensures a clear and greater understanding of their ideals and general goals. Thus with this knowledge one gets the proper insight that enables them to review their strategies and adapt new ones so they can be able to support and deliver in accordance to those goals by the stakeholders (Deszca, & Ingolis). Additionally, communication creates dialogue with shareholders. One is able to effectively engage with the shareholders and respond to any questions while also solving amicably any misunderstandings that may arise. Thus, communication with stakeholders is vital as it aids in creating a positive understanding which can be helpful in the long-run as they lead to establishments of valuable relationships with major players. In conclusion, communication plays a vital role in any business. Communication between all levels of staff and stakeholders should be maintained to ensure the smooth running of business operations. Though communication, shareholders can discuss business processes and ensure the effective implementation. The different stages involved in a change process are crucial. This is because they enable the stakeholders to discover areas that they can improve to ensure they get the best outcomes possible. Organizations embrace different action planning tools to help them to develop their approaches in order to realize their capabilities. Al Rajhi bank launched a financing product for local supplies in the country through a forum for its clientele in the business sector. The Al Rajhi bank uses training and leverage analysis as its action planning

THE AL RAJHI BANK 8 tools. The bank is one of the major lending Islamic corporations. It has worked to meet the Kingdom’s vision 2030 by aligning some changes such as merging with the MIDF bank, helping the SMEs and being a key player in the housing development. These changes are instrumental as they improve and make it easier for the kingdom to realize the vision 2030.

THE AL RAJHI BANK 9 References Alqahtany, A. (2020). Affordable housing in Saudi Arabia’s vision 2030: new developments and new challenges. International Journal of Housing Markets and Analysis . Deszca, G., & Ingolis, C. (n.d.). chapter 9: action planning and implementation . sage publications. Deszca, G., Ingols, C., & Cawsey, T. F. (2019). Organizational change: An action-oriented toolkit . SAGE Publications. Hayat, M., & Khan, M. (2021). CONSUMER TRUST EFFECTS ON E-BANKING IN SAUDI ARABIA. PalArch's Journal of Archaeology of Egypt/Egyptology , 18 (16), 239-246. Moez, D., & Abdelheq, L. (2020). DOES UNSYSTEMATIC RISK MANAGEMENT AFFECT THE RELATIONSHIP BETWEEN BANKS'PERFORMANCE AND THE OBJECTIVES OF SAUDI ARABIA ECONOMIC VISION 2030?. Academy of Accounting and Financial Studies Journal , 24 (4), 1-15. Mondore, S., Douthitt, S., & Gentry, W. A. (2019). Analyze this: Six steps to leveraging people investments. Leadership in Action: A Publication of the Center for Creative Leadership and Jossey‐Bass , 29 (2), 3-6. Orlando, G., & Bace, E. (2021). Challenging times for insurance, banking and financial supervision in Saudi Arabia (KSA). Administrative Sciences , 11 (3), 62.

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THE AL RAJHI BANK 10 Ramady, M. (2021). The Saudi Banking Sector: From Saudization to Liberalization and Its Role in Economy Development. In Financial Regulation and Liberation (pp. 21-42). Springer, Cham. Schulkes, P. (2021). The changing Saudi banking landscape . Middle East Institute. https://www.mei.edu/publications/changing-saudi-banking-landscape

The Al Rajhi Bank

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