Saudi British Bank: HSBC's Saudi Arabian Experience


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Case Details:

Case Code : BSTR076
Case Length : 22 Pages
Period : 1959 - 2003
Organization : HSBC, Saudi British Bank
Pub Date : 2003
Teaching Note :Not Available
Countries : Saudi Arabia
Industry : Banking

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"It is one of the most aggressive banks in retail banking and is perhaps the most innovative in terms of products and services."

- 'Market Starts Week on Negative Footing,' www.arabfinance.com, August 17, 2003.

Introduction

In July 2003, Saudi British Bank (SABB), the Saudi Arabian associate of global financial services and banking major HSBC, won two prestigious international awards at the annual Euromoney 1 'Awards for Excellence 2003' ceremony held in London. SABB was adjudged the 'Best Bank' and the 'Best Equities House' in recognition of its value added customer services and banking products.

The company was lauded as the most innovative banking products and services provider in the kingdom of Saudi Arabia. SABB Chairman Sheikh Abdullah Mohammed Al-Hugail was of the opinion that the award represented the recognition of the bank's customer-first policy, "The recognition conferred on SABB is a reflection of the emphasis placed on providing high quality service to its customers, which has always been its top priority."2 Geoff Calvert (Calvert), Managing Director, SABB said that the awards were, "A recognition of the bank's efforts across a broad spectrum of areas, including customer service, recruiting and training Saudis to use state-of-the-art technology that facilitates a wide range of financial products and services."3

SABB was also applauded for the successful execution of Saudi Telecommunication Company's (STC) initial public offering (IPO). Reportedly, SABB was entrusted with this task by the Public Investment Fund (PIF), the investment division of the Ministry of Finance, Saudi Arabia, because of its technical capabilities and industry expertise. SABB was also the top broker on the Saudi Stock Exchange in 2002. Many industry observers felt that no other bank in Saudi Arabia matched HSBC's expertise in offering localized financial services/products.

In fact, it was its customer-centric product development policy that helped HSBC establish itself firmly in the Saudi Arabian banking industry through SABB. The bank's impressive financial performance over the years stood as a testimony to its success (Refer Exhibit I for SABB's financial highlights for the period 1998-2002). SABB posted a net profit of SAR (Saudi Riyal4) 565 million during the six month period ended June 30, 2003. The bank recorded an increase of 16.1% over the income earned during the corresponding period in 2002 (SAR 487 million). Customer deposits at the bank also increased from SAR 33.1 billion on June 30, 2002 to SAR 36.5 billion on June 30, 2003 (Refer Exhibit II for details).

Saudi British Bank: HSBC's Saudi Arabian Experience - Next Page>>

1] Euromoney is a leading international financial services magazine. Since the early-1990s, it has organized several multi-category competitions for banks across the world. Euromoney awards recognize those banks that have consistently outperformed their peers in various capital market sectors and have proven themselves to be well-organized, professional, versatile and innovative. The winners need not necessarily be banks that have produced the best financial results or have the largest market share.

2] 'Two Prestigious Awards for Saudi British Bank,' http://www.sagia.gove.sa, August 15, 2003.

3] 'Two Prestigious Awards for Saudi British Bank,' http://www.sagia.gove.sa, August 15, 2003.

4] In October 2003, 3.75 SR equaled 1 US $.

 

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