As an Islamic bank, the values of integrity, ethics, responsibility and altruism are intertwined with Alinma Bank’s corporate culture. These foundations form the bedrock of the Bank’s values, behaviors and beliefs. It is for this reason that Alinma welcomes the growing focus on Environmental, Social and Governance (ESG) factors in determining the valuation of banks, and this section of our Annual Report seeks to summarize the Bank’s ESG achievements that we started measuring in 2021.
Environment
The Bank adopted the following measures to reduce its environmental impact during the year under review:
- Investments in digital channels to reduce use of paper; encouraging employees to use digital signatures, avoid printing of emails and use less paper in daily operations
- Using energy efficient lighting in branches that contribute to lower energy consumption
- Maximizing the use of natural lighting by fixing special windows to branches to reduce electricity consumption
- Recycling of paper
- Planned expansion for the use renewable energy sources (solar) across branches (installed in two branches to date)
- Planned expansion of air conditioning timers to reduce electricity consumption in across branches (installed in three branches to date)
Electricity Consumption of the Gadeer Branch
| December 2019 | January 2020 | December 2020 | January 2021 | December 2021 | January 2022 | |
| Electric consumption (SAR) | 13,198.50 | 11,403.00 | 13,731.00 | 11,454.00 | 11,764.50 | 9,855.50 |
Electricity Saving of the Gadeer Branch
|
Comparison from
December 2019 to January 2020 |
Comparison from
December 2020 to January 2021 |
|
| Electricity saved (%) | 10.8% – 13.5 % | 14.3% – 13.9% |
Number of branches where regular lights were fully replaced with LED lights
|
Installed since the start of
the operating period |
Replaced in 2020 | Replaced in 2021 | Total | |
| Number of branches with only LED lights | 18 | 38 | 48 | 104 |
Social Our people
Our people are the most important resource available to the Bank to ensure the execution of its strategy and the provision of excellent service to our customers. An engaged and committed workforce is therefore a critical element in the success of the Bank.
In 2021, the Bank improved its employee engagement score through the provision of flexible working hours, enabling employees to work-from-home and encouraging interaction and communication among employees.
We also launched a new incentive scheme for employees in retail banking. The scheme covers branches, sales, bancassurance and retention, and is designed to increase motivation and satisfaction among employees. The “Employee Housing Program” was introduced and added to the roster of staff benefits this year.
Another positive people development in 2021 saw the establishment of a “Women Empowering Department” to increase the number of female hires and to embed female support structures in the workplace.
Achievements:
- Conducted six town halls across the Kingdom, around 1,500 employees participated, and 32 employees were awarded for their achievements
- Launched a women empowerment program and 16% of new hires were women
- 94% Saudization Rate
Learning and Development
Learning and development is how Alinma grows and develops its people, preparing the business leaders of tomorrow from the cohorts of today. Alinma Academy for Education and Development has been set up for this purpose. It conducts analyzes to uncover any gaps in both leadership and core capabilities. It also provides updated product training to all branches and conducts awareness training to cover SAMA and other regulations. A professional certification program has been introduced for all employees, along with Board member training courses.
Hours of training undertaken by employees in 2021
Hours of Training Undertaken by Employees in 2021
| Type |
Number of colleagues trained |
Hours of training
delivered |
| Technical skills | 213 | 1,278 |
| Soft skills | 1,352 | 8,112 |
| Total | 1,565 | 9,390 |
Total hours training delivered per employee amounted to 18.8 based on a total employee count of 2,944 and the total E-courses and leadership trainings delivered were over 500.
| Program name |
Total number of
trainees in 2021 |
| COOP trainees | 227 |
| Orphans special needs training courses | 48 |
| * Tamheer | 9 |
| Future Bankers Program (Fresh Graduate Program) | 45 |
| Hire employees with special needs | 28 |
* Tamheer is an on-the-job training program for tertiary education graduates, aimed at providing practical training and experience.
Our business in numbers:
During the year under review, Alinma Bank took several steps to promote employee engagement and well-being considering the impact of the COVID-19 pandemic. These include extending utmost priority and care for our employees and implementing safety protocols for the well-being of our employees and their families. We also introduced a work-from-home policy in compliance with the Regulatory requirements and the Bank’s business continuity needs. Furthermore, the Bank provides special incentives to its women employees such as competitive benefits and continuously striving to create a differentiation.
The main challenges faced by Alinma Bank pertains to talent attraction and talent retention. There is an increasing challenge with the heightened competition to attract and retain women employees at a time when the KSA market is attracting talented women employees to take on bigger and challenging roles to drive the 2030 Vision. Furthermore, getting talented women employees to support and drive the Bank’s new strategic direction including digitalization ambitions and the establishment of the Digital Factory is also a challenge. To address this, the Bank is redesigning its talent management practices to attract women employees.
In order to address talent retention, the Bank is creating a value proposition that appeals to women employees. The Bank is also developing a robust leadership pipeline with significant inclusion of women employees and redesigning its talent management practices to strengthen the retention of women employees.
Participation in "Empowerment of Saudi Women in the Era of King Salman Conference"
Women empowerment
With the vision of inspiring and empowering women to pioneer excellence in-line with the KSA 2030 Vision, Alinma Bank set up the Women Empowerment Department. Its mission is to champion women in driving the progressive agenda of the Bank through influencing policies, sharing knowledge, leading initiatives and enhancing representation in decision-making positions to contribute towards the KSA 2030 Vision pertaining to Women Empowerment.
The key objectives of the Women Empowerment Department
- Enhance the working environment for women
- Establish end-to-end governance related to women at the workplace
- Measure and improve women effectiveness (engagement and enablement)
The key developments and achievements of the department in 2021
- Increasing women employment across Alinma by 40% YoY
- Increasing women employment in Head Office by 400% YoY
- Increasing women employment in branches by 14% YoY
- Increasing women employment ratio by 3% YoY
- Increasing hiring of women by 404% YoY
| 2020 | 2021 | |||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| Number of female employees hired | 11 | 13 | 17 | 21 | 24 | 12 | 14 | 82 |
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Total number of female employees | 250 | 285 | 307 | 309 | 441 |
Outlook
Drastic changes have happened in the past two years following the COVID-19 pandemic for businesses, leaders and for the employees. As a sense on normalcy is setting in, one fact becomes clear – the power has shifted from organizations to people, from profit to mutual prosperity and from “me” to “we”.
In such context, we need to strive hard to create a robust and dynamic employee value proposition which caters the needs of the Bank’s strategic direction, for both our current and future employees. Our focus will be more on “performance and incentivization” of employees.
Small business banking
Alinma Bank recognizes the importance of the Micro, Small and Medium Enterprise (MSME) sectors to the Kingdom’s economy and works to advance these sectors through financing and banking services. The Bank’s financing of SMEs grew by 12% in 2021, demonstrating the Bank’s commitment to this segment.
Kafalah programme
The government led Kafalah financing programme provides a direct financial benefit to small businesses. Alinma was an enthusiastic participant in the program, and Bank’s financing via Kafalah increased by 64% in 2021. Point of sale financing, another direct and important service to SMEs, increased by 160%.
Digital
The Bank’s digital strategy aims to drive financial inclusion and promote a cashless society through the delivery of the most innovative banking products and services. The digital strategy and road map of the Bank include major initiatives to be undertaken by 2025.
2021 recorded a significant increase in customer engagement via digital channels: 60% for financial transactions and 70% for non-financial transactions.
Our customers continued their migration to digital channels through 2021: we welcomed 575,000 new digital users, an increase of 74% from 2020. In addition, more than three million customers connected with the Bank on its digital platforms nearly 150 million times, resulting in some 3 billion hits relating to financial and non-financial transactions across our platforms.
The Bank’s 1.2 million active Smart App users performed approximately 46 million fund transfers in 2021, 98% of the total individual and small business customers using all digital channels.
The Bank employs state-of-the-art technology and IT in its business operations to ensure that all the Bank’s services are operating in a 24/7 environment. As it stands, all of Alinma’s business operations is available through its core banking systems.
Alinma’s digital story in statistics (FY2021)
Transactions
| STP transactions | 47,452,822 |
| Digital payment transactions (POS and E-comm transactions on Alinma cards) | 350,275,966 |
| Digital account opening transactions | 399,839 |
| Total financial transactions | 135,816,079 |
| Branch financial transactions | 1,438,099 |
| Digital financial transactions | 134,377,980 |
| Digital financial transactions (% of total) | 98.94% |
| Branch financial transactions (% of total) | 1.06% |
Financial transactions
| Digital financial transactions | 134,377,980 |
| Digital financial transactions (% of total) | 98.94% |
| Branch financial transactions (% of total) | 1.06% |
Customers
| Active digital retail users | 1,400,219 |
| Total active retail customers | 3,073,731 |
| Active digital corporate users | 97,624 |
| Total active corporate customers | 88,218 |
Mobile app
| Mobile banking app: average monthly users (AMU) (PDD) | 12,096,847 |
| Mobile banking app: average daily users (ADU) (PDD) | 403,228 |
| Mobile banking app: IOS rating | 4.7 |
Other achievements:
- Finalized the digital factory operating model
- Created a digital function, hired a Chief Digital Officer, and capacity building is underway
- 41% Agile IT Projects delivered; Operations, Eight Advanced Analytics use cases and productivity models established
- Deployed 70 digital zones in branches and established 13 new branches and 55 new ATMs
Cyber Security
The Cyber Security Department (CSD) has introduced initiatives, which cover data governance and protection covering confidentiality, availability and integrity. The initiatives include:
- Cyber security risk assessments
- Enhanced security monitoring activities, processes and technologies
- Forensic process and lab
- Certifications for PCI DSS, ISO27001 and SWIFT
- Enhanced Incident Response and Monitoring Management
- Alinma cyber security policies
- A comprehensive cyber security awareness program
Corporate Social Responsibility
Community service is one of the pillars of Alinma Bank. Not only does our CSR program reflect the role we play in the communities in which we operate, it also enhances the engagement and professionalism of employees. As the Bank is an integral part of Saudi society, we take high responsibility towards the communities we serve.
Alinma Bank allocates 1% of its annual profits for corporate social responsibility (CSR) projects.
2021 Community programs included:
- Extended donations to public charities (SAR 2,200,000 for the Autism Centre in Riyadh)
- Donated SAR 1 Mn. to the Ehsan platform (This is a contribution from Alinma Bank as part of a public support campaign)
- Conducted three blood donation campaigns
- Extended support and gave gifts to children with cancer in collaboration with the Sanad Charitable (SAR 150,000)
- Supported the Ataa program of the Association of Children with Disabilities, which facilitates Bank customers to purchase an hour of medical, educational, or rehabilitative service for a child in need (This is not a fund support, it is a solution from Alinma Bank to enable our customers to pay their contribution to the charity through their account at Alinma using www.alinma.com)
Governance
The Saudi Central Bank (SAMA), our regulator, sets the regulatory framework in which we operate, and it is the responsibility of all employees to ensure this framework is adhered to – the “first line of defence”.
The Senior Management of the Bank is responsible for establishing, maintaining an adequate and effective internal control system. This internal control system includes the policies, procedures and processes, which are designed to underpin and to achieve the strategic objectives of the Bank. The Bank’s internal control system has been designed to provide assurance to the Board that management of risks are adequate to achieve the Bank’s strategic objectives.
The Shariah Secretariat is responsible for all matters of Shariah-compliance, including managing risks of non-compliance with Shariah Committee decisions, internal Shariah auditing of the Bank’s business activity to verify its compliance with Shariah Committee decisions and submitting the results and observations of the internal Shariah audit to both the Shariah Committee and the Review Committee.
Management has adopted the internal controls integrated framework, as recommended by SAMA, through its guidelines on internal controls.
Investor Relations
In 2021, Alinma began to institutionalize its investor relations (IR) capabilities. It set an ambition for its IR program to be aligned with the Bank’s vision to “be recognized and celebrated as the most digitally advanced, fastest and convenient bank in KSA”. To achieve this ambition, Alinma is already in the process of transforming from a basic IR capability to a proactive, institutionalized, and advanced IR program that adheres to international best practices.
Furthermore, Alinma strives to not only be loved by its customers, but also by the local, regional and international investment community, by achieving the following strategic IR objectives:
- Alignment of Alinma’s vision, mission, values and purpose
- Corporate strategy that is clearly defined
- Financial performance that is well-understood
- Sustainability and ESG embedded into corporate strategy
- Proactive engagement with analysts and investors
- Digital, Fast, Convenient; becoming Alinma’s IR motto
As part of the above bank’s strategic IR objectives, ESG is an area that will be reported and presented as part of the bank’s DNA and all ESG materials and disclosures will be part of Alinma Bank’s overall investment thesis and reporting process, which will require to not only collating and presenting data but also developing a coherent narrative for Alinma Bank’s current and future ESG/sustainability framework and strategy.
2021 IR Achievements
Team staffing and onboarding
An experienced new IR team was officially staffed and onboarded in the second half of 2021 with an IR Manager and IR Analyst under the imperative of raising IR excellence and enhancing the current IR function for the Bank in line with its peers globally.
IR strategy and operating model
The IR team under the guidance of the executive leadership have developed and implemented an overarching IR strategy and operating model which included aspects of governance including policies, procedures and terms of reference and sets forth the scope of strategic IR activities that will help the Bank achieve its objective of becoming best in practice in the region.
Institutionalized Quarterly Earnings Process
Earnings Calls and Webcasts
- In November 2021, Alinma successfully held its inaugural earnings call with the global investment community. During the call, the CEO along with the CFO, presented an overview of the Bank, discussed strategy and strategic objectives and presented the 3Q financial performance. Over 75 global investors and analysts dialed into the call and very positive feedback was received from the investment community.
Quarterly Disclosures
- Enhanced earnings presentations, more detailed investor presentations and financial data supplements are now made available to the investment community through the Company’s website and are used for engaging with investors through conferences and meetings. This process has been institutionalized through the IR function.
Interactive IR Website
- The IR team successfully overhauled the IR section of the Bank’s website and developed an IR website with significantly more content including shareholder information, financial disclosures and interactive data that is up to date and made available to the investment community.
Investor Engagement
- The Alinma team together took part in over
35 investor meetings and three investor conferences in 2021 and coupled these engagements with the enhanced set of presentations and disclosures.