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Contribution Of NCB In Saudi Arabia Development

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Introduce and give a Brief History (the chosen bank is National Commercial Bank NCB). Discuss the products and services offered with your evaluation of how each of the products contribute to the banks existence, profitability and liquidity.



Financial institutes with a license to accept deposits and offer loans are known as Bank (Wallach & Tattersall, 2011). It also offers financial services, like safe deposit boxes, currency exchange, and wealth management. Investments banks and commercial/retail banks are the two categories of banks (Betz, 2013). The purpose of this report is to provide an overview of National Commercial bank of Saudi Arabia, its products and services and their contribution towards the profitability of the bank. Along with this report will perform the competitor analysis and its comparison with other banks. Further, it will provide a brief discussion of its contribution towards the development of Saudi Arabia.

Overview of National Commercial Bank

The National Commercial Bank (NCB) is also called as AlAhli Bank. In terms of asset, it is the second largest bank in the Arab world and the initiator of the Islamic banking. The NCB is the Saudi’s first bank receives its license and the largest in the Kingdom and a principal financial institution in the area established by Abdallah Mousa Kaki (National Commercial Bank, 2018). The bank started its business in the name of “The National Commercial bank” succeeding the Royal Decree on 20 Rabi Thani 1373H. With the help of (PIF) i.e. Ministry of Finance’s Public Investment Fund in 1999 government acquired a maximum number of bank holding. 90.7% of NCB Capital is owned by the National Commercial Bank, its investment supports the Leading bank of investment in the Kingdom and possesses 67.03% of Türkiye Finans Kat?l?m Bankas? (TFKB), Turkey’s top participation bank (Alshetwi, 2013).


Products and Services offered by National Commercial Bank

The National Commercial Bank (NCB) offers several banking services and products. It provides banking products based on non-special commission in obedience to Shariah rules, which are permitted and managed by a self-governing Shariah Board (Bloomberg, 2018).The Bank activates through Capital Market, Retail, Treasury, International and Corporate segments.

The Retail segment offers services of a bank, comprising current accounts and lending, as well as products in obedience to Shariah rules to entities and customers of private banking.

The corporate segment provides several financing and conventional credit-related products to companies, large, medium and small sized establishments.

Treasury segment offers a variety of corresponding and treasury banking services and products including foreign exchange and money market; carries out trading and investment activities; and handles credit risks, market, and liquidity associated with the investments.

The capital Market segment provides asset management, shares and brokerage, investment banking and wealth management services.

International segment offers services of the bank outside the boundary of Saudi Arabia. It also promotes and distributes products of Islamic insurance, offers recruitment services and runs a private equity fund.


The existence of Bank- The National Commercial Bank exists because of its best services offered to the customers. It maintains good relations with the customers and business organizations operating in the country.

Liquidity of Bank- Liquidity of bank is the capability of a bank in retaining sufficient funds in order to meet its maturing requirements. How effortlessly bank can convert its asset into cash describes the asset’s liquidity (Elliott, 2014). National Commercial Bank is profitable because depositors lend money to the bank at a low rate of interest so that NCB can access the funds and manage at frequency intervals. It is the reason bank is able to protect its liquidity position and wealth. The deposit facility that the bank provides enables it to maintain a sufficient cash balance to meet the unexpected and other short-term obligations so that it can maintain sound liquidity position.

Profitability of Bank- Profitability reflects the capability of a firm in earning income on its assets. The profitability of NCB is defined by the factors which are management decisions and various policy measures established by the bank i.e. level of expenditure, amount of capital and level of liquidity. The products that the bank generally provides to its customers such as insurance and loan functions allow it to earn considerable interest and premium amounts so as to enhance its overall profitability.

Competitor Analysis

Market Share

In the banking sector of Saudi Arabia, there are 12 listed banks and non-listed banks. As per the size of balance sheet, the biggest bank of the Kingdom is National Commercial Bank with assets of more than SAR 441.4bn, which is 19.9% of the whole market, followed by Al Rajhi Bank with the SAR 339.7 bn asset base which is 15.3% part of the market. More than 9.5% of the total banking sector is with Riyadh Bank and Samba each (Aljazira Capital, 2017).

Considering the analysis related to market share of the banks of Saudi Arabia it can be said that National Commercial Bank have maximum market share as compared to its competitors.



The profitability position of the bank can be determined using various ratios such as return on equity, return on assets, net profit margin and operating income margin. In this report, a comparative study of profitability and liquidity position of the national commercial bank and its competitors is undertaken by the means of ratio analysis. From such analysis, it is observed that the percentages operating margin and net margin ratio of NCB have been declining since last 4 years but in 2017, it has increased considerably which indicates that the bank has made efforts to improve its profitability position. The profitability position of its major competitors i.e. Samba financial group is allow following declining trend whereas the other competitor i.e. Al Rajhi is successful to improve its profitability in 2016 only.

At the same, it is also observed that the percentage of return on equity is fluctuating since the concerned last five years. However, there is no significant fluctuation in the ROE of its above-discussed competitor banks. (Refer Appendix)


The growth rate in terms of sales revenue and net income has been analyzed by taking previous year's figures as the base figures. The growth rate of all the banks in fluctuating and there is no particular trend followed by the concerned bank and its competitors. However, in terms of revenue from sales NCB is not very successful to enhance its growth rate which is achieved by its prime competitor Al Rajhi. But, it can be said that NCB is quite successful in improving its growth rate than the Samba financial groups.

Also in terms of net income, NCB has experienced higher positive growth rate since 2016 whereas prior to 2016, the growth rate was declining for NCB. Samba Groups, on the other hand, is not very successful to attain a constant growth rate and also in 2016 it has faced a significant decline in the net income. However, Al Rajhi Bank has tremendously improved its profitability position by achieving a successful growth rate. (Refer Appendix)


Contribution of NCB in Saudi Arabia Development

  • National Commercial Bank (NCB) regularly offers job opportunities for youth by investing in the career development plan of Government. A set of training programs prepare young Saudi women and men with the knowledge and skills necessary for becoming the leaders of future. The Bank also promotes and hires people to do the job in their own area or region, by supporting the economic development (Alahli, 2016).
  • The Bank continued its success by fulfilling its corporate responsibility. It has provided an investment of SAR 11.4 million in the ‘Ahalina’ programs which are formed to empower children, youth, and women. The Bank also offers funds by microfinance of SAR 6.85 million to the woman receivers and contributed SAR 11.4 million in numerous initiatives that have a direct influence on the society (Alahli, 2016).
  • NCB continuously developing the IT infrastructure, assembling high growth in the direction of completing the project of NextGen Technology. In 2017, transactions conducted by the digital channels will reach 96%, contributing to the leadership of NCB in the region’s Digital Banking and accomplishment of its strategic goal of becoming the Best Digital Bank (Alahli, 2016).
  • National Commercial Bank has always been the big lender for the SME sector and in 2012 bank was responsible for 31% of all Kafala loans. Since 2006, 1381 loans were extended by the bank with the value of SR 921 million (Alahli, 2012).


In the conclusion, it can be said that National Commercial bank is working hard to improve its profitability which is reflected by its five-year trend. On the other hand, Samba has reflected some downturns in its performance whereas Al Rajhi has successfully improved its profitability in 2016. The above report has provided detail information of National Commercial Bank and its services. The bank has also contributed a lot to the development of Saudi Arabia.  



Alahli. (2016). The National Commercial Bank Annual Report 2016. Retrieved from:

Alahli.(2012). Sustainability Report 2012. Retrieved from:

Aljazira Capital. (2017). Saudi Banking Sector. Retrieved from:

Alshetwi, A.S. (2013). Study on the Marketing Strategies of NCB in Saudi Arabia. Global Journal of Management and Business Studies, 3(2), 75-80.

Bloomberg. (2018). Company Overview of The National Commercial Bank. Retrieved from:

Betz, F. (2013).Why Bank Panics Matter: Cross-Disciplinary Economic Theory. Germany: Springer Science & Business Media. 

Elliott, D.J. (2014). Bank Liquidity Requirements: An Introduction and Overview. Retrieved from:

Martynova, N. (2015). Bank Profitability and Risk-Taking. U.S: International Monetary Fund.

Morning Star. (2018). Al Rajhi Bank. Retrieved from:

Morning Star. (2018). The National Commercial Bank. Retrieved from:

National Commercial Bank. (2018).The First Saudi Bank. Retrieved from:

Wallach, J.M., & Tattersall, C. (2011).Money and Banking. U.S: The Rosen Publishing Group.

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