Saudi Awwal Bank

Overview

Saudi Awwal Bank (SAB)

type	Public
founded	January 21, 1978‡R1R‡
traded as	saudi stock exchange: 1060
location	Riyadh, Saudi Arabia
native name	البنك السعودي الأول
native name lang	ar
key people	Lubna Olayan (Chairman) Tony Cripps (Managing Director)
num employees	5,000+
revenue	$1.88 billion
revenue year	2017‡R2R‡
assets	$90.79 billion
assets year	2021‡R2R‡
num locations	81
industry	Finance
products	Financial services
area served	Saudi Arabia United Kingdom
owners	HSBC Holdings (31%) Public shares (69%)
homepage	https://www.sab.com
profit	▲$1.05 billion (2017)
rating	A1/P-1‡R3R‡
subsid	HSBC Saudi Arabia SAB Insurance Agency Limited SAB Insurance Services Limited SAB Securities Limited SAB Takaful

Saudi Awwal Bank (SAB; ) is a Riyadh-based Saudi joint stock company in which global banking group HSBC owns a minority stake.[4] 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 of banks in Saudi Arabia, 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 Alawwal Bank in the Saudi banking sector's first merger in twenty years.[5][6] On June 16, 2019, the official legal merger of Saudi British Bank and Alawwal Bank was completed, making the two banks one legal entity.[7]

History

British Bank of Iran and the Middle East (1950)

The British Bank of Iran and the Middle East (which in 1952 became British Bank of the Middle East - BBME) opened branches in Jeddah and Khobar in 1950. The Jeddah branch in particular depended for its profits on the Hajj, the Muslim pilgrimage to Makkah (Mecca). HSBC acquired BBME in 1959.[10]

Saudi Arab British Bank (1978)

In 1976 the central bank enacted its sweeping policy of banking sector Saudization to address foreign banks' domination of the sector and its impact on the Saudi economy. Consequently, it directed all foreign bank branches to incorporate 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. [11]

As a result, HSBC was incorporated in Saudi Arabia 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.[12][13]

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. [14]

Merger with Alawwal Bank (2019)

On May 16, 2018, SAB, formerly known as SABB, and Alawwal Bank (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 in the transaction.[15] 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 of $17.2 billion.[16]

SABB shareholders owned 73 percent of the new bank, which is chaired by Saudi businesswoman Lubna Al Olayan.[17][18] 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

Saudi Awwal Bank

History

British Bank of Iran and the Middle East (1950)

Saudi Arab British Bank (1978)

Merger with Alawwal Bank (2019)

Services

Credit rating

See also

External links

References