The Saudi British Bank (SABB) ( ar, البنك السعودي البريطاني (ساب)) is a

Riyadh Riyadh (, ar, الرياض, 'ar-Riyāḍ, lit.: 'The Gardens' Najdi pronunciation: ), formerly known as Hajr al-Yamamah, is the capital and largest city of Saudi Arabia. It is also the capital of the Riyadh Province and the centre of the R ...

-based Saudi joint stock company in which

British British may refer to: Peoples, culture, and language * British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies. ** Britishness, the British identity and common culture * British English, ...

banking firm

HSBC Holdings PLC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tril ...

owns a minority stake. The bank traces its origins to the

British Bank of the Middle East HSBC Bank Middle East Limited is the largest and most widely represented international bank in the Middle East. History The Imperial Bank of Persia (Persian: بانک شاهنشاهی ایران; Bank-e Šâhanšâhi-ye Irân) was a British ban ...

which was acquired by HSBC in 1959. In response to restrictions on foreign ownership of banks in

Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...

, SABB was created in 1978 to manage HSBC branches and assets in the country. SABB is one of the five largest Saudi banks by deposits and has over eighty branches across Saudi Arabia and one branch in

London, England London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a major s ...

. In May 2018, prompted by recent changes to Vision 2030 economic reforms, SABB announced its intention to

acquire ''Acquire'' is a multi-player mergers and acquisitions themed board game. It is played with tiles representing hotels that are arranged on the board, play money and stock certificates. The object of the game is to earn the most money by developi ...

Alawwal Bank The Alawwal Bank ( ar, البنك الأول), 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 ...

in the Saudi banking sector's first merger in twenty years.

History

British Bank of Iran and the Middle East (1950)

The British Bank of Iran and the Middle East, which became

(BBME), opened branches in

Jeddah Jeddah ( ), also spelled Jedda, Jiddah or Jidda ( ; ar, , Jidda, ), is a city in the Hejaz region of the Kingdom of Saudi Arabia (KSA) and the country's commercial center. Established in the 6th century BC as a fishing village, Jeddah's pro ...

and

Al Khobar Khobar ( ar, ٱلْخُبَر, translit=al-Khobar) is a city and List of governorates of Saudi Arabia, governorate in the Eastern Province, Saudi Arabia, Eastern Province of the Saudi Arabia, Kingdom of Saudi Arabia, situated on the coast of the Pe ...

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

Hajj The Hajj (; ar, حَجّ '; sometimes also spelled Hadj, Hadji or Haj in English) is an annual Islamic pilgrimage to Mecca, Saudi Arabia, the holiest city for Muslims. Hajj is a mandatory religious duty for Muslims that must be carried ...

, the

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

pilgrimage to

Makkah Mecca (; officially Makkah al-Mukarramah, commonly shortened to Makkah ()) is a city and administrative center of the Mecca Province of Saudi Arabia, and the holiest city in Islam. It is inland from Jeddah on the Red Sea, in a narrow va ...

(Mecca).

Hongkong and Shanghai Banking Corporation The Hongkong and Shanghai Banking Corporation Limited (), commonly known as HSBC (), was the parent entity of the multinational HSBC banking group until 1991, and is now its Hong Kong-based Asia-Pacific subsidiary. The largest bank in Hong K ...

(

HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...

) acquired BBME in 1959.

Saudi British Bank (1976)

In 1976 the

central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...

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 the largest in the Middle East and the eighteenth largest in the world. A permanent and founding member of the OPEC, Saudi Arabia is also a member of the G20 forum as one of the world's largest economies. Saud ...

. Consequently, it directed all foreign bank branches to

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

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, HSBC incorporated in Saudi Arabia in 1978 and opened up to local ownership, renaming itself the Saudi British Bank. Ownership became 60% Saudi and 40% HSBC, and HSBC has a technical services agreement with the bank. HSBC Holdings of Britain held 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 51% stake.

Merger with Alawwal Bank (2019)

On May 16, 2018, 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 will be represented by U.S. investment bank

Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...

in the transaction. Alawwal Bank will cease to exist as a legal entity and will be 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 t ...

of $17.2 billion. SABB shareholders will own 73 percent of the new bank, which is expected to be chaired by Saudi businesswoman Lubna Al Olayan. Final agreement on a 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 completed in about 18 months. The integration was planned to completely took place in about 18 months, which will result in retention of the brand name "

Saudi British Bank The Saudi British Bank (SABB) ( ar, البنك السعودي البريطاني (ساب)) is a Riyadh-based Saudi joint stock company in which British banking firm HSBC Holdings PLC owns a minority stake. The bank traces its origins to the ...

" only. On 14 March 2021, Alawwal & SABB fully integrated in historic bank merger.

Services

SABB offers services in

investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...

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

private banking Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...

and

Islamic banking Islamic banking, Islamic finance ( ar, مصرفية إسلامية), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economic ...

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

Saudi Arabian Monetary Agency The Saudi Central Bank ( ar, البنك المركزي السعودي), previously known as the Saudi Arabian Monetary Authority (SAMA; ar, link=no, مؤسسة النقد العربي السعودي), established in 1952, is the central bank of ...

and a

Sharia Sharia (; ar, شريعة, sharīʿa ) is a body of religious law that forms a part of the Islamic tradition. It is derived from the religious precepts of Islam and is based on the sacred scriptures of Islam, particularly the Quran and the H ...

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

Credit rating

In August 2011, Fitch Ratings gave SABB'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 Investors Service, 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 historical name. Moody's Investors Service provides international ...

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

References

External links

Saudi British Bank websiteHSBC Peru
{{DEFAULTSORT:Sabb Companies listed on Tadawul Companies based in Riyadh Banks of Saudi Arabia HSBC 1978 establishments in Saudi Arabia Banks established in 1978 Saudi Arabia–United Kingdom relations