Rating boost for Bank AlJazira

Updated 02 July 2013

Rating boost for Bank AlJazira

Islamic International Rating Agency (IIRA) has assigned a national scale rating of A+/A-1 (SR) (A plus/A-One) to Bank AlJazira.
On the international scale, IIRA has assigned a foreign currency and local currency rating of A-/A-2 (A minus/A-Two).
Outlook on the rating is ‘stable’.
The fiduciary score has been assessed in the range of ‘71-75’, reflecting adequate fiduciary standards.
The fiduciary score is an aggregation of scores assigned to its three sub-sections, namely corporate and Shariah governance, and asset manager quality.
Founded in 1975, Bank AlJazira is one of the four Islamic banks in Saudi Arabia with a growing market share which stood at 3 percent at year-end 2012.
Shareholding of the bank is diversified with significant stakeholders representing prominent business groups and families in Saudi Arabia.
The assigned credit ratings incorporate the bank’s improving asset quality and standalone profitability as well as an adequate liquidity profile and capitalization levels.
Business diversification both in terms of fund sourcing and asset selection will add to the institution’s resilience.
BAJ has grown at a CAGR of 19 percent in terms of asset size over the last three years through continuous expansion in branches and business acquisition.
Following a shift in business focus in 2008, Bank AlJazira has since broadened its business base with an enhanced presence in the corporate segment and a growing exposure toward the retail market.
BAJ, like other banks in the country, remains sensitive to concentration related risks.
While large single exposures are likely to persist in the portfolio, segment-wise broadening will overtime reduce its possible impact, in case of impairment in large financings.
Deposits remain the key funding source of the bank representing around four-fifth of the bank’s funding base, of which, a sizable portion comprises non-remunerative deposits.
Asset growth is expected to propel profitability levels going forward, which are likely to increase in quantum terms over the foreseeable future.


SAGIA, Xylem ink $50m MoU to advance water security

Updated 05 December 2019

SAGIA, Xylem ink $50m MoU to advance water security

Water technology firm Xylem has signed an MoU with the Saudi Arabian General Investment Authority (SAGIA), representing an investment of $50 million. The agreement aims to expand Xylem’s manufacturing footprint into the Kingdom, and to better serve its portfolio of customers in Saudi Arabia and across the region.

Under the MoU, Xylem will work with SAGIA to develop and localize advanced water and wastewater products and technologies to address water challenges in Saudi Arabia, as well as increase its footprint of service points and rental fleets across the Kingdom. A core objective of the MoU is to accelerate adoption of digital water solutions and optimize utility networks across the Kingdom.

The proposed multimillion-dollar investment will not only help build a vibrant local supply chain, but also see Xylem bringing additional commercial opportunities into the Kingdom, with the wider aim of improving water solutions locally. The agreement is in line with the goals of Saudi Vision 2030 to promote economic diversification through investments in localization that will also contribute to the export of “Made in Saudi” products across the world.

The MoU was signed on the sidelines of the Future Investment Initiative (FII), commonly known as the “Davos in the Desert,” by Ibrahim A. Al-Omar, governor of SAGIA, and Steven Leung, senior vice president and president, emerging markets of Xylem, in the presence of senior officials of both entities and Frank Ackland, managing director Xylem Middle East.

Al-Omar said: “As Saudi Arabia welcomes investors and decision-makers from across the globe to this annual global investment platform, the agreements exchanged here reflect the strength and diversity of the economy. Under Saudi Vision 2030, Saudi Arabia is undergoing an ambitious program of economic reform, and the world is taking notice. This month, Saudi Arabia climbed 30 places in the World Bank’s Doing Business 2020 report, becoming the most improved economy globally. The indicators are
clear: Saudi Arabia is not only open for business, it’s the economy of the future.”

Leung added: “As Xylem continues to lead the water sector’s digital transformation globally, this MoU presents an opportunity to leverage our market-leading portfolio and application expertise to advance water security in Saudi Arabia. Through our investment of $50 million, and with our strong presence in Saudi Arabia, backed by our dedicated office and team, we are committed to creating in-Kingdom value through our investments and partnerships. We are thankful to SAGIA for the opportunity to directly contribute our expertise to the development vision of the leadership, as the Kingdom embarks on its ambitious transformation program.”