Saudi Arabia's SABB and Alawwal bank today created banking history in the kingdom by legally combining their businesses. The combined bank has SR257 billion ($68.68 billion) of total assets, SR168 billion of customer loans and SR195 billion of customer deposits.
Following regulatory and shareholder approvals, the banks have now become a single listed company, creating the third largest bank by assets in Saudi Arabia.
The transaction has been executed through a share swap, with Alawwal bank shareholders receiving 0.48535396 SABB shares for each Alawwal bank share. This increases SABB’s paid up capital to SR20,547,945,220 from SR15,000,000,000.
The two banks will continue to operate a normal service while work continues to fully integrate their products and services, said a statement.
Lubna S Olayan, chair of SABB, said: “We have combined two great banks, each with a rich history and legacy of playing key roles in the kingdom’s development. Now our size, enhanced capabilities and fantastic talent will help us build on that history and legacy to become the bank of choice for a modern Saudi Arabia. We will be the best place to bank and the best place to work in the Kingdom, for a new generation of Saudi men and women and for the new era of development under Vision 2030.”
The combined bank will cement its position as a top tier Saudi financial institution, with total revenue of SR10.9 billion (as at end of financial year 2018), more than one million retail customers and the second largest corporate bank by assets. Joining the two banks creates a significant retail and wealth management business, with greater resource to innovate and connect a young, tech savvy population to a leading digital banking experience. Customers will also have access to an international banking network that is unrivalled in the kingdom, the statement said.
David Dew, managing director, SABB, said: “The combination of SABB and Alawwal bank creates huge potential for our customers and staff. The increased scale and capacity will allow us to support the growing needs of our diverse customer base, while also providing unrivalled international connectivity for retail, corporate and institutional clients. Our focus now is on our customers while at the same time completing the integration process and executing our vision of being the leading international bank in the kingdom.”
It will deliver long-term shareholder value by combining the best of SABB and Alawwal bank, while capitalising on its long-term strategic partnership with HSBC Holdings to provide the most international banking offering available in Saudi Arabia, it said.
For now, SABB and Alawwal bank will offer a normal service to customers, who should continue to bank in the usual way. A new board and leadership team are in place, overseeing the integration of the two banks, which is expected to take between 18 and 24 months. -TradeArabia News Service