Saudi Awwal Bank
| Company type | Joint stock company |
|---|---|
| Industry | Banking and financial services |
| Founded | 1978 |
| Headquarters | Riyadh , Saudi Arabia |
Key people | Lubna Al Olayan (Chairperson) |
| Products | Investment banking, commercial banking, private banking, Islamic banking |
| Owner | HSBC (majority shareholder since October 2019) |
| Parent | HSBC (minority ownership before 2019, majority ownership after 2019) |
Saudi Awwal Bank (SAB; ) is a Saudi joint stock company headquartered in Riyadh, with minority ownership held by the international banking group HSBC. Its roots trace back to the British Bank of the Middle East, which HSBC acquired in 1959. Due to Saudi Arabia's regulations limiting foreign ownership, Saudi Arab British Bank (SABB) was founded in 1978 to oversee HSBC’s local branches and assets.
In May 2018, in line with the reforms under Vision 2030, SABB revealed its intention to acquire Alawwal Bank, marking the first significant consolidation in Saudi Arabia’s banking industry in twenty years. The formal merger took place on June 16, 2019, combining both institutions into one entity. Following this union, the bank adopted its present name.
SAB is ranked among the top five Saudi banks by deposit volume, operating more than eighty branches throughout Saudi Arabia, along with a branch in London, United Kingdom.
British Bank of Iran and the Middle East (1950)
The British Bank of Iran and the Middle East, renamed British Bank of the Middle East (BBME) in 1952, inaugurated branches in Jeddah and Khobar in 1950. The profitability of the Jeddah branch was closely tied to the annual Hajj pilgrimage to Makkah (Mecca). HSBC acquired BBME in 1959.
Saudi Arab British Bank (1978)
In 1976, the central bank introduced a Saudization policy for banking aimed at reducing foreign control and boosting the national economy. This policy required foreign banks to establish local incorporation with foreign ownership capped at 40%.
As a result, HSBC established itself locally in 1978 as Saudi Arab British Bank (SABB), with ownership divided as 60% Saudi and 40% HSBC. A technical services agreement was maintained between HSBC and SABB. HSBC Holdings owned a 49% stake until October 2019, when it increased its shareholding to 51%, becoming the majority stakeholder.
Merger with Alawwal Bank (2019)
On May 16, 2018, SABB (previously SAB) entered into a non-binding agreement to acquire Alawwal Bank (formerly Saudi Hollandi Bank), following nearly a year of negotiations. The transaction was advised by U.S. investment bank Goldman Sachs.
The merger resulted in Saudi Arabia’s third-largest bank by market capitalization, valued at $17.2 billion. Shareholders of SABB held a 73% stake in the merged entity, which was chaired by prominent Saudi businesswoman Lubna Al Olayan. This deal supported the Saudi government’s Financial Sector Development Program and aligned with objectives set out in Saudi Vision 2030.
The merger finalized on June 16, 2019, with an integration period projected at about eighteen months. The consolidation process was completed by early 2021, maintaining the brand name "Saudi British Bank" while adopting HSBC’s hexagon logo and corporate typeface for its branding identity.
Services
SAB offers a range of services including investment banking, commercial banking, private banking, and Islamic banking. Its Islamic Financial Solutions operate under the supervision of the Saudi Arabian Monetary Agency and a Sharia Supervisory Committee, ensuring full adherence to Sharia law.
Credit rating
In August 2011, Fitch Ratings awarded SAB a long-term issuer default rating (IDR) of “A” with a stable outlook and confirmed its Viability Rating (VR) as “A”. Prior to its merger with Alawwal Bank in October 2018, Moody’s maintained SAB’s local and foreign currency deposit ratings at A1/P-1, while Alawwal Bank held ratings of A3/P-2.
See also
- HSBC Bank Middle East
- British Arab Commercial Bank
- Abdullah Mohammed Al-Hugail
- List of companies of Saudi Arabia
- List of banks in Saudi Arabia