Saudi Awwal Bank (SAB; ) is a

Riyadh Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of the Riyadh Province and the centre of the Riyadh Governorate. Located on the eastern bank of Wadi Hanifa, the current form of the metropolis largely emerged in th ...

-based Saudi joint stock company in which global

banking A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...

group

HSBC HSBC Holdings plc ( zh, t_hk=滙豐; initialism from its founding member The Hongkong and Shanghai Banking Corporation) is a British universal bank and financial services group headquartered in London, England, with historical and business li ...

owns a minority stake. The bank traces its origins to the British Bank of the Middle East which was acquired by HSBC in 1959. In response to restrictions on

foreign ownership Foreign ownership refers to the ownership of a portion of a country's assets (businesses, natural resources, property, bonds, equity etc.) by individuals who are not citizens of that country or by companies whose headquarters are not in that count ...

of banks in

Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in West Asia. Located in the centre of the Middle East, it covers the bulk of the Arabian Peninsula and has a land area of about , making it the List of Asian countries ...

, Saudi Arab British Bank (SABB) was created in 1978 to manage HSBC branches and assets in the country. In May 2018, prompted by recent changes to Vision 2030 economic reforms, SABB announced its intention to

acquire ''Acquire'' is a board game published by 3M in 1964 that involves multi-player mergers and acquisitions. It was one of the most popular games in the 3M Bookshelf games series published in the 1960s, and the only one still published in the Uni ...

Alawwal Bank The Alawwal Bank (), previously known as Saudi Hollandi Bank, was a Saudi Arabian bank based in Riyadh, Saudi Arabia. It was the first operating bank in the Kingdom of Saudi Arabia and was founded in 1926 as a branch of the Netherlands Trading ...

in the Saudi banking sector's first merger in twenty years. On June 16, 2019, the official legal merger of Saudi British Bank and Alawwal Bank was completed, making the two banks one legal entity. The bank adopted its current name following the completion of the merger. SAB is one of the five largest Saudi banks by deposits, and has over eighty branches across Saudi Arabia and one branch in

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

England England is a Countries of the United Kingdom, country that is part of the United Kingdom. It is located on the island of Great Britain, of which it covers about 62%, and List of islands of England, more than 100 smaller adjacent islands. It ...

History

British Bank of Iran and the Middle East (1950)

The British Bank of Iran and the

Middle East The Middle East (term originally coined in English language) is a geopolitical region encompassing the Arabian Peninsula, the Levant, Turkey, Egypt, Iran, and Iraq. The term came into widespread usage by the United Kingdom and western Eur ...

, which became British Bank of the Middle East (BBME), opened branches in

Jeddah Jeddah ( ), alternatively transliterated as Jedda, Jiddah or Jidda ( ; , ), is a List of governorates of Saudi Arabia, governorate and the largest city in Mecca Province, Saudi Arabia, and the country's second largest city after Riyadh, located ...

and Khobar in 1950. The Jeddah branch in particular depended for its profits on the

Hajj Hajj (; ; also spelled Hadj, Haj or Haji) is an annual Islamic pilgrimage to Mecca, Saudi Arabia, the holiest city for Muslims. Hajj is a mandatory religious duty for capable Muslims that must be carried out at least once in their lifetim ...

, the

Muslim Muslims () are people who adhere to Islam, a Monotheism, monotheistic religion belonging to the Abrahamic religions, Abrahamic tradition. They consider the Quran, the foundational religious text of Islam, to be the verbatim word of the God ...

pilgrimage to

Makkah Mecca, officially Makkah al-Mukarramah, is the capital of Mecca Province in the Hejaz region of western Saudi Arabia; it is the holiest city in Islam. It is inland from Jeddah on the Red Sea, in a narrow valley above sea level. Its metropo ...

(Mecca). Hongkong and Shanghai Banking Corporation (

) acquired BBME in 1959.

Saudi Arab British Bank (1978)

In 1976 the

central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

enacted its sweeping policy of banking sector Saudization to address foreign banks' domination of the sector and its impact on the

Saudi economy The economy of Saudi Arabia is highly reliant on its petroleum sector. Oil accounts for approximately 30% of Saudi GDP and 55% of government revenue, with substantial fluctuations depending on oil prices each year. The kingdom has the seco ...

. Consequently, it directed all foreign bank branches to

incorporate Incorporation may refer to: * Incorporation (business), the creation of a business or corporation * Incorporation of a place, the creation of municipal corporation such as a city or county * Incorporation (academic), awarding a degree based on the ...

in Saudi Arabia (i.e., become Saudi companies with Saudi capital) and limited their parent companies to ownership of forty percent of these new entities. As a result,

was incorporated in

in 1978 and opened up to local ownership, renaming itself the Saudi Arab British Bank (SABB). Ownership became 60% Saudi and 40% HSBC, and HSBC has a technical services agreement with the bank. HSBC Holdings of Britain held a 49% stake in the joint venture with SABB holding 51% until October 2019 when HSBC Group acquired shares from SABB to become the major shareholder with a 51% stake.

Merger with Alawwal Bank (2019)

On May 16, 2018, SAB, formerly known as SABB, and

(formerly Saudi Hollandi Bank) entered into a non-binding agreement on a deal for SABB to acquire Alawwal. The agreement concluded nearly one year of negotiations, and SABB was represented by U.S. investment bank

Goldman Sachs The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...

in the transaction. Alawwal Bank, as per agreement,ceased to exist as a legal entity and was absorbed into SABB, creating Saudi Arabia's third largest bank with a

market cap Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

of $17.2 billion. SABB shareholders owned 73 percent of the new bank, which is chaired by Saudi businesswoman Lubna Al Olayan. The final agreement on the merger deal was announced one week after the Saudi government launched the Financial Sector Development Program, an executive program aimed at overhauling the Saudi financial sector to create an effective capital market capable of supporting the goals of the Vision 2030 economic reform plans. The merger of the two banks was completed on 16 June 2019. The integration of the two banks was planned to be completed in about 18 months. The integration was completed in 18 months, which resulted in the retention of the brand name "

Saudi British Bank Saudi Awwal Bank (SAB; ) is a Riyadh-based Saudi joint stock company in which global banking group HSBC owns a minority stake. The bank traces its origins to the British Bank of the Middle East which was acquired by HSBC in 1959. In response ...

". On 14 March 2021, Alawwal & SABB fully integrated in historic bank merger. The combined bank uses HSBC's familiar hexagon logo and typeface in its branding.

Services

SAB offers services in

investment banking Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by und ...

commercial banking A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...

private banking Private banking is a general description for banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs) – those with very high income or substantial asset ...

and

Islamic banking Islamic banking, Islamic finance ( ''masrifiyya 'islamia''), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economics. Some ...

. SAB Islamic Financial Solutions (Arabic: الحلول المالية الإسلامية), which are part of SAB services, are regulated by the

Saudi Arabian Monetary Agency The Saudi Central Bank (), previously known as the Saudi Arabian Monetary Authority (SAMA; ), established in 1952, is the central bank of the Kingdom of Saudi Arabia. Despite the name change in 2020, the Saudi Central Bank has continued to use t ...

and a

Sharia Sharia, Sharī'ah, Shari'a, or Shariah () is a body of religious law that forms a part of the Islamic tradition based on Islamic holy books, scriptures of Islam, particularly the Quran, Qur'an and hadith. In Islamic terminology ''sharīʿah'' ...

Supervisory Committee. This ensures that SAB Islamic Financial Solutions conforms to strict adherence to the principles of Sharia.

Credit rating

In August 2011,

Fitch Ratings Fitch Ratings Inc. is an American credit rating agency. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission and is considered as being one of the " Bi ...

gave SAB's long-term issuer default rating (IDR) at “A” with a stable outlook as well as The Viability Rating (VR) has also been affirmed at “A”. In October 2018, in anticipation of its pending merger with Alawwal Bank,

Moody’s Moody's Ratings, previously and still legally known as Moody's Investors Service and often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its histori ...

reaffirmed local and foreign currency deposit ratings of SAB at A1/P-1 and Alawwal Bank at A3/P-2, respectively.

References

External links

*
HSBC Peru
{{DEFAULTSORT:Sabb Companies listed on Tadawul Companies in the MSCI Tadawul 30 Index Companies based in Riyadh Banks of Saudi Arabia HSBC 1978 establishments in Saudi Arabia Banks established in 1978 Saudi Arabia–United Kingdom relations