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"$%&'()*+&,(%"As leaders in the banking industry, Al Rajhi Bank took the initiative of conducting a research study on consumers’ point of views towards the affluent banking proposition in Kuwait amongst leading banks. The study focused on understanding the mindset of the Kuwaiti market in terms of affluent banking services, assessing and analyzing the requirements of the consumer relative to what is being offered, with a view to developing customer centric Sharia compliant banking products and services.

With over 50 years of experience in banking and trading activities and as one of the leading Islamic banks worldwide, Al Rajhi Bank has taken its services to Kuwait to offer its proficiency and expertise to its existing and potential consumers.

Al Rajhi Bank

Founded in 1957, Al Rajhi Bank is one of the largest Islamic banks in the world with total assets of SR 184 billion (US$ 49 bn), a paid up capital of US$4 billion and an employee base of over 7,500 associates. With over 50 years of experience in banking and trading activities, the various individual establishments under the Al Rajhi name were merged into the umbrella 'Al Rajhi trading and exchange corporation' in 1978 and it was in 1988 that the bank was established as a Saudi share holding company. Deeply rooted in Islamic banking principles, the Sharia compliant banking group is instrumental in bridging the gap between modern financial demands and intrinsic values, whilst spearheading numerous industry standards and development. With an established base in Riyadh, Saudi Arabia, Al Rajhi Bank has a vast network of over 466 branches, over 100 dedicated ladies branches, more than 2,750 ATMs, 21,000 POS terminals installed with merchants and the largest customer base of any bank in the Kingdom, in addition to 130 remittance centers across the kingdom.

In addition to Kuwait, Al Rajhi Bank operates in Malaysia and Jordan.

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Research Overview

As part of Al Rajhi Bank’s commitment to understand the requirements of the Kuwait banking sector, Al Rajhi Bank commissioned TNS to conduct primary research into consumer attitudes towards the affluent banking proposition in Kuwait. The research focused on affluent banking customers banking with leading Kuwaiti banks (both conventional and Islamic).

Summary of Research

Research Objectives Understand needs of affluent banking customers

Research type

Face to Face Interviews

Target audience

Existing affluent banking customers belonging to banks in Kuwait. Several banks were included in the survey and for the purposes of data aggregation categorized as follows: Islamic Banks = Kuwait Finance House (KFH), Kuwait International Bank (KIB) and Boubyan Bank (BB) Conventional Banks = National Bank of Kuwait (NBK), Gulf Bank of Kuwait (GB) Entry Affluent = Current Account Balance: Less than KD 15,000 Mid Level Affluent = Current Account Balance” KD 15,000 to KD 30,000 Upper Affluent = More than KD 30,000

Sample size

200 respondents

Research timing

Quarter 4, 2009

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Report Compiled By:

Yusuf Jehangir

Al Rajhi Bank, Riyadh, Kingdom of Saudi Arabia

Head of Marketing & Corporate Communications

Contact: Jehangiry@alrajhibank.com.sa

Al Rajhi Bank Legal Disclaimer

This research report provides general information only. The information, including financial information, contained in this report is provided solely for information purposes only. It is furnished for your private understanding with the express understanding, which the recipient acknowledges, that it does not constitute an offer to sell any product or security, nor does it constitute investment advice and should not be relied upon in making any investment decision.

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Expectations & Benefits (By Grouping)

Benefits expected from affluent customers were considered in terms of core or hygiene level benefits, secondary benefits that would be expected and tertiary benefits with selective importance.

Core Benefits Secondary Benefits Tertiary Benefits

Dedicated Lounge access Emergency cash services

Family member banking services

Dedicated Relationship Managers and Tellers

International banking services

Discounts on money transfers

Special ATM/ Credit card High limit on personal loans

Safety boxes at special rated

Higher ATM cash withdrawal limit

Free premium credit card

Extended business hours

Time deposit accounts (multiple currencies)

Investment & financial planning advice

Discounted travel tickets and travel insurance

Personalized cheque books

Instance card cancellation & replacement

Reward programs

Expectations & Benefits (Affluence Level)

84% of affluent customers expect discounts on money transfers. 74% expect discounted travel related benefits. Advice on investment and financial products was mentioned by two thirds with importance increasing along with affluence level.

Current Account Balance Expectations & Benefits Overall Less than

15k KD

15k KD to 30k

KD

More than

30k KD Discounts on money transfers

84% 69% 70% 88%

Discounted travel tickets and travel insurance

74% 62% 86% 74%

Investment and financial planning advice

66% 55% 73% 71%

Advice on brokerage services

68% 55% 62% 88%

International banking services

60% 52% 62% 65%

Reward programs 40% 41% 46% 32% Emergency cash services 39% 34% 43% 44% Time deposit accounts (multiple currencies)

32% 28% 27% 41%

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Affluent Banking Customer Occupation

In terms of primary occupation, the vast majority of affluent banking customers were employed in the government sector. In addition to working for a government organisation, 1 in 3 respondents have their own business.

Occupation & Main Occupation

Occupation (multiple responses)

Main Occupation

Salaried in government employment 94% 89% Have own business 35% 9% Have partnership business 17% 1% Salaried private employment 5% 1%

Affluent Banking Relationship

49% of affluent customers report having one banking relationship, whilst 51% say they have multiple banking relationships. The multiple banking relationship increases together with the level of affluence.

Current Account Balance Banking Relationship Overall Less than

15k KD

15k to 30k KD

More than

30k KD With one bank 49% 70% 50% 38% With multiple banks 51% 30% 50% 62%

Intention to Continue With Existing Bank

When asked about overall satisfaction with their current and main bank, 84% of respondents said that they were satisfied overall, with 78% of respondents saying they intended to continue with their existing bank, with highest intention amongst Islamic Banking customers.

Intention to Continue (multiple answers)

Overall Conventional Islamic

Overall satisfaction 84% 83% 85% Intention to continue 78% 76% 88%

Intention to Try a New Bank

Affluent banking customers seem to be interested in trying the services of a new bank and comparing with their current bank, with 71% of respondents saying they might be interested in trying a new bank and comparing to their existing bank. 18% of respondents say they are definitely interested in moving to a new bank if their banking needs would be met.

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Intention to Try a New Bank

Overall

Not interested in trying/ moving to a new bank

11%

Might compare with current bank before making a decision

71%

Definitely interested in moving to a new bank

18%

Reasons For Choosing a Bank (Conventional Versus Islamic)

When asked about the main reason for using a particular bank, 56% of affluent customers mentioned superior customer service, whilst Islamic banking practices ranked highly amongst Islamic Banks. Other important reasons mentioned included: the banks’ financial strength, large network of branches, professional and knowledgeable Relationship Managers.

Reasons (multiple answers)

Overall Conventional Islamic

Superior customer service 56% 70% 45% Islamic banking practices 52% 0% 80% Financial strength 44% 48% 42% Large network of branches 42% 68% 30% Professional/ Knowledgeable relationship managers

41% 54% 35%

Leader in affluent banking 38% 48% 31% International presence 23% 44% 9%

Reasons For Choosing a Bank (Affluence Level)

When considering the level of customer affluence, the large network of branches was considered important. Being made to feel special with relationship managers who are knowledgeable and go the extra mile were key factors for all segments, but particularly highly rated by the upper affluent segment.

Current Account Balance Reasons (multiple answers)

Overall Less than

15k KD

15k to 30k KD

More than

30k KD Large network of branches 50% 41% 38% 71% Professional/ Knowledgeable relationship managers

39% 28% 41% 47%

Willing to go the extra mile 39% 21% 38% 56% Makes me feel taken care of 34% 21% 27% 53% Best investment products 19% 10% 16% 29% Gives good advisory service 13% 7% 14% 18%

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Affluent Proposition & Treatment

When considering the overall affluent proposition offered by their banks 88% of respondents said they needed advice from their bank on investment products. 78% of respondents said they were willing to take a risk to obtain higher financial returns. Face to face interaction is still an important part of the affluent proposition with 7 out of 10 respondents mentioning face to face interaction, this number varies from 86% for entry level customers compared to 62% for upper affluent customers. 66% of respondents mentioned the need for their bank to make them feel important.

Current Account Balance Affluent Proposition & Treatment

Overall Less than

15k KD

15k KD to 30k

KD

More than

30k KD Need advice from bank on investments

88% 90% 92% 82%

Willing to take a risk for higher return

78% 83% 86% 65%

Prefer face to face interaction

74% 86% 76% 62%

Prefer a bank that makes me feel important

66% 55% 59% 82%

Touch Point Interaction

All respondents mentioned the need for a dedicated teller when visiting their bank branch. An exclusive lounge was mentioned by 79% and the need for a relationship manager and investment advisor increases along with the level of affluence.

Current Account Balance Touch Point Interaction Overall Less than

15k KD

15k KD to 30k

KD

More than

30k KD Dedicated Teller 100% 100% 100% 100% Exclusive Lounge 79% 79% 84% 74% Relationship Manager 38% 24% 35% 53% Investment Advisor 21% 10% 14% 38%

Product Usage

Not surprisingly, upper affluent customers have a higher proportion of investment products usage, while entry level affluent customers have a higher usage of loans and financing products.

Current Account Balance Product Usage Overall Less than

15k KD

15k KD to 30k

KD

More than

30k KD Time Deposits 42% 14% 51% 56% Shares 35% 28% 27% 50% Personal Finance 20% 31% 16% 15% Auto Finance 9% 17% 8% 3% Mutual Funds 8% 3% 11% 9%