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Riyad Bank's new CEO, Tariq Al-Sadhan, is tasked with taking the company into a digital future ahead of Vision 2030. It's no small feat

Renaissance man: Riyad Bank's Tariq Al-Sadhan

CEO Tariq Al-Sadhan says Riyad Bank is working towards being the number one bank in the kingdom

The appointment of Riyad bank’s newest CEO could not have come at a more critical time.

As the kingdom gears up for its colossal economic transformation by 2030, Tariq Al-Sadhan is tasked with supporting the country’s radical privatisation drive.

In many ways, this kingdom’s ambitious plan is good news for Riyad Bank because local economic confidence is buoyed by the nation’s massive government support initiative.

In an exclusive interview, Sadhan tells CEO he is confident of what the future will bring.

“We are locally aligning ourselves with Vision 2030. The fast progress of the economy of Saudi Arabia needs a lot from the banking industry,” he says.

A man of no small ambition, the CEO adds, “We are working towards being the number one bank in the kingdom. We are positioning Riyad to be among the top players in the market across corporates, SMEs, and financial technology.”

As well as joining Riyad at the cusp of the kingdom’s economic revolution, Al-Sadhan arrived amid the bank’s discussions to merge with the National Commercial Bank (NCB).

He joined in 2017 in December as CFO. On April 1st, 2019, he was announced as Riyad Bank CEO officially, just a few months after Riyad Bank’s decision to enter talks with NCB.

Riyad Bank and NCB, which counts Saudi Arabia’s sovereign wealth fund the Public Investment Fund among its shareholders, announced intentions to merge in December last year. If the proposed union goes ahead, it will create a financial institution with 748bn riyals in assets.

The potential deal would be the second major bank merger in the kingdom, following that of Saudi British Bank and Alawwal Bank. Riyad Bank is currently the third-biggest retail bank in the kingdom in revenue terms, with a 7.6 per cent market share. NCB is the second-biggest, with a share of 22.2 per cent, while Al Rajhi Bank leads the retail market with a 30.6 per cent share.

Profit boom

But Al-Sadhan’s immediate concern has been steering the bank towards optimum profits – a goal which he has achieved by some margin this year.

Riyad reported a 59 per cent year-on-year jump in its third-quarter net profit as operating income rose.

Net profit for the three-month period ending September 30 climbed to 1.51 billion Saudi riyals (Dh1.47bn), the lender said in a regulatory statement to the Tadawul stock exchange, where its shares trade.

"Our strong performance reflects the dedication and focus of our management team to make every effort to achieve the bank’s strategic objectives," Al-Sadhan said.

In the nine-month period ending September 30, the bank’s net profit climbed 63 per cent year-on-year to 4.49bn riyals, mainly driven by higher net commission income and fee income.

Riyad Bank’s loans and advances grew to 166.27bn riyals, a 14 per cent year-on-year rise, while customer deposits advanced 11.5 per cent to 177.67bn riyals.

Given the bank’s strong performance this year, the CEO said he is positive about continued exemplary results in 2019. “Because of the results we’ve had so far, I feel confident this will be continued in the coming year,” he says.

Digital drive

Al-Sadhan says one of the biggest challenges weighing on his shoulders is the rapid evolution of digital banking, both globally and regionally.

“To stay in the lead, we need to keep up with what’s going on around us,” he says. “There’s no doubt that digital banking is the future.”

The CEO says Riyad is working around-the-clock to advance its services to suit the needs of Saudi’s fast-moving environment and digitally savvy customers. And these words are not just lip service: Riyad was the first bank in the country to launch the contactless card and the first to activate Apple Pay.

The bank has even launched an innovative wristband payment system. The bracelets are linked to the user's existing debit or credit account and offer the freedom to make swift 'tap and go' payments with wearables. Riyad has also launched a contactless sticker which can be fixed to the back of any cell phone to turn it into a secure contactless payment device.

According to Al-Sadhan, the launch of Saudi Arabia's first contactless payment wristband is a prime example of Riyad Bank’s commitment to “an enhanced and distinctive customer experience”.

But digital banking is not just about consumers; it requires deep digital thinking that permeates the heart of banking culture and innovation. Al-Sadhan is aware that making such a huge digital leap requires tech-savvy partners combined with fresh, disruptive thinking.

One of the initiatives closest to the innovative CEO’s heart is the Digital Partnership Programme (DPP) that he launched in October this year.  The DPP is linked to a venture capital fund of SAR 100 million ($26.6 million).

Announced on the sidelines of the Future Investment Initiative 2019 (FII) in Riyadh, the fund aims to forge strategic partnerships with entrepreneurs and technology companies, and provide solutions and support in the field of financial technology. It also targets creating new industries and innovative business models.

Al-Sadhan says Riyad will be partnering with digital startups and entrepreneurs to enhance digital services and expedite the process of launching new products. The CEO also points out that the fund aims to empower innovation and support entrepreneurs through Research and Development (R&D), in addition to the funds.

The Fintech Fund will look to defining a proper mechanism for the country’s fintech ‘sandbox’ experimental environment and further support entrepreneurship. Al-Sadhan says the establishment of such a fund is critical because of “the movement of the kingdom towards a new economy that is spurred by the digital world.”

Facing the future

As Al-Sadhan takes Riyad bank into the future, he constantly has his eye on the needs of the market. “It’s all about understanding what people want and having clear visions and ambitions for the team,” he says. “Ultimately, it is about the right leadership.”

Going forward, Al-Sadhan says that the opening up of Saudi Arabia will present its own challenges as well as boons. As the kingdom opens up for international business, the CEO is mindful of the many challenges that globalisation will bring, such as increased competition and fast-moving innovation.

The CEO says he is always on the lookout for lessons from abroad that can help Saudi Arabia on its digital journey. “We have to take the world around us into consideration by looking at their experiments and experience. We have to keep our business.”

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