Riyad Bank has reported net income of SAR 5.3 billion for the second quarter of 2026, an increase of 4% on the same period a year earlier, according to results published on the Saudi lender's investor relations website. The bank generated a return on equity of 16% in the quarter and said it had strengthened its capital base following a Tier 1 sukuk issuance.
Alongside the results, the bank raised its full-year guidance on both loan growth and net special commission income to the mid-to-high single digits, citing what it described as solid balance sheet growth over the first half of the year.
EARNINGS AND CAPITAL
The 4% year-on-year increase in quarterly earnings extends a run of steady expansion at one of the kingdom's largest commercial lenders. A 16% return on equity places Riyad Bank in the upper tier of Saudi banks by profitability, in a market where sector returns have benefited from a prolonged period of elevated benchmark rates and healthy corporate credit demand tied to Vision 2030 project financing.
The bank said its capital position had been reinforced by the recent issuance of Additional Tier 1 sukuk, an instrument used by Gulf banks to bolster core capital ratios without diluting ordinary shareholders. The issuance provides Riyad Bank with additional headroom to support balance sheet expansion in the second half of the year, in line with the raised guidance. Additional Tier 1 sukuk are widely used across the Gulf banking sector as a shariah-compliant equivalent to perpetual bonds, and count towards the highest tier of regulatory capital under the Basel framework as implemented by the Saudi Central Bank.
Management pointed to solid balance sheet growth as a key driver of the quarter, encompassing both lending and deposit activity. The bank did not disclose segmental balance sheet figures in the release referenced on its earnings page, but the upgraded outlook implies management expects the momentum built up in the first half to carry through the remainder of the financial year.
GUIDANCE LIFTED FOR 2026
The decision to raise loan growth guidance to the mid-to-high single digits marks an upward revision on the earlier framework the bank had communicated to the market. The parallel upgrade to net special commission income guidance, the Islamic banking equivalent of net interest income, suggests management expects lending margins to hold up even as the Saudi Central Bank's policy stance continues to track the US Federal Reserve under the kingdom's currency peg.
Riyad Bank is one of the largest publicly listed banks on the Saudi Exchange and a significant financier of corporate and retail activity across the kingdom. The lender counts the Public Investment Fund and the General Organization for Social Insurance among its major shareholders, giving it a strategic role in the financing of national development priorities.
The Tier 1 sukuk placement referenced in the results release adds to a wave of capital raising by Gulf banks in 2026, with lenders across Saudi Arabia and the United Arab Emirates issuing dollar and local currency instruments to support project-driven credit expansion. Riyad Bank has scheduled further disclosures alongside its half-year regulatory filings in the coming weeks, according to its investor relations timetable published on the bank's website.
The 16% return on equity reported for the quarter, together with the 4% year-on-year lift in net income to SAR 5.3 billion, provides a base from which management has set the upgraded mid-to-high single digit trajectory for both loans and net special commission income for the full year. Investors will look for confirmation of the balance sheet growth trajectory when the bank publishes its next quarterly results and interim financial statements.