Arab News, Thu, May 09, 2024 | Dhu al-Qadah 1, 1445
stc Bank set to launch later this year, says group CEO
Saudi Arabia:
Saudi telecom giant stc Group has obtained official approval for the soft launch
of its new banking sector subsidiary, aiming to provide Shariah-compliant
fintech solutions.
The Saudi Central Bank has given the green light
for the beta launch of stc Bank, with a full rollout to all customers
anticipated later this year, revealed the company's CEO, Olayan Al-Wetaid, while
announcing the financial results of the first quarter.
The new entity will offer banking services and
financial solutions compliant with Islamic Shariah, prioritizing high security
and customer protection through advanced fintech. This aligns with the ambitious
goals of the Kingdom’s Vision 2030 for a prosperous diversified economy.
In its financial results announcement for the
period ending March 31, the CEO explained that stc Group has strengthened its
position in the telecommunications sector through a strategic partnership with
the Public Investment Fund.
Earlier in April, the two entities finalized
agreements for PIF to acquire a 51 percent stake in the Telecommunications
Towers Co., also known as Tawal, valuing the company at SR21.94 billion ($5.8
billion).
This transaction is part of a broader merger with
Golden Lattice Investment Co. to form a new entity that aims to lead the
national telecommunications infrastructure, with stc Group retaining a 43.06
percent stake.
These developments are part of stc’s DARE 2.0
strategy, which focuses on unconventional growth paths and leading digital
transformation in the region, Al-Wetaid stated.
The strategy has already yielded significant
results, with stc’s network experiencing its highest volume of voice calls
during the recent Ramadan, a 35 percent increase compared to the previous year,
supported by modern digital voice technologies.
Further embodying its growth strategy, stc Group
has engaged in numerous strategic partnerships and agreements, notably at the
LEAP 2024 conference with global tech giants such as Huawei, Ericsson, and
Samsung.
These collaborations are designed to enhance
innovation and speed up digital transformation across the region.
Additionally, the group’s subsidiary, Solutions,
signed a memorandum of understanding with the French Devoteam Group in February
to explore IT investment opportunities globally, following Solutions’
acquisition of a 40 percent stake in Devoteam Middle East.
In its financial report, stc Group highlighted a
notable growth in revenues for the first quarter of 2024, which increased by
7.76 percent compared to the previous quarter and by 5.07 percent compared to
the same quarter last year, totaling SR19.1 billion.
This revenue growth was primarily driven by a 1.2
percent increase in stc Saudi Arabia’s revenues, supported by a 6.7 percent rise
in commercial unit revenues and a 5.7 percent increase in carriers and wholesale
unit revenues, despite a decline in business unit revenues.
Additionally, revenues from stc’s subsidiaries saw
a significant rise of 13 percent.
The company also reported growth in gross profit,
which rose by 5.13 percent compared to the previous quarter and by 1.65 percent
compared to the same quarter last year, reaching SR9.3 billion.
Earnings before interest, taxes, zakat,
depreciation, and amortization similarly showed a robust increase, rising by
16.3 percent compared to the previous quarter and by 2.07 percent compared to
the same period last year, reaching SR6.4 billion.
Notably, net profit for the quarter surged by
44.50 percent compared to the previous quarter and increased by 5.69 percent
compared to the same quarter last year, totaling SR3.2 billion.