The Saudi Arabian Capital Market Authority (CMA), the newly established regulator of the stock exchange and capital markets in the kingdom, has given approval to HSBC and The Saudi British Bank (SABB) to establish the first full-service, independent investment bank licensed under the new capital market law.
HSBC, through a wholly-owned subsidiary, will hold 60% of equity in the new company and SABB, in which HSBC has a 40% shareholding, will hold the remaining 40%.
The joint venture, to be known as HSBC Saudi Arabia, will be established as a limited liability company headquartered in Riyadh, with a share capital of SR50mn (US$13.33mn).
Its formation is subject to obtaining an investment licence from the Saudi Arabian General Investment Authority and a commercial registration from the ministry of commerce and industry.
HSBC Saudi Arabia will provide corporate finance and asset management advisory services to corporations and institutions in Saudi Arabia as well as investment advisory services to individual investors.
In addition, the new company will manage SABB’s domestic and international equity brokerage and security service businesses.
Its corporate finance units will provide a wide range of services related to the issuance of initial public offerings, rights issues, private placements and Islamic and conventional debt securities. The joint venture will also provide project finance, privatisation, and merger and acquisition advice to a broad range of clients.
Stephen Green, group chief executive of HSBC Holdings, says: “This year marks the 55th year of HSBC’s continuous presence in the kingdom of Saudi Arabia, first through The British Bank of the Middle East and then through The Saudi British Bank. We are optimistic about the long-term prospects for growth in the Saudi Arabian economy and look forward to providing investment banking and asset management expertise and products to the local market.”