SAB: Comprehensive Analysis of Saudi First Bank in Financial Market

The Saudi First Bank, or SAB (SAB), is known as one of the pillars of the banking sector in Saudi Arabia. SAB emerged in its current form in 2019 after a historic merger between Saudi British Bank (SAB) and Alawwal Bank (formerly Saudi American Bank). This merger came in the context of the Saudi financial market's trends to enhance efficiency and competitiveness among national banks. The bank's foundational roots extend to a long-standing partnership between SAB and the global HSBC Group, while Alawwal Bank was part of the Citigroup international network. By combining local and international expertise, SAB has become a comprehensive banking platform that meets the needs of individuals, companies, and large institutions. This transformation is one of the most significant shifts in the Saudi financial sector over the past decade. Since the merger, the bank has expanded its customer base and updated its digital infrastructure, enhancing its position among the top three banks in the Kingdom in terms of assets. Today, SAB has a strong banking legacy and renewed traditions in providing diverse services, with a clear emphasis on commitment to international governance and transparency standards.

SAB is listed under the 'Banking and Investment Services' sector in the Saudi financial market (Tadawul), enjoying a market capitalization that places it among the top 15 listed companies in the market. SAB's stock is one of the leading stocks that contribute to the formation of the main index (TASI), giving it a direct impact on the overall market movement. The high liquidity of SAB's stock reflects the interest of local and international investors, and the bank's large capital (15 billion SAR) ensures its sustainable presence in Tadawul. All of the bank's operations and shares are monitored by the Saudi Capital Market Authority, enhancing transparency and investor protection. Investors track SAB's stock prices through official trading platforms, where prices ranged between 50 and 55 SAR at the end of 2024 and the beginning of 2025, with periodic changes linked to the bank's results and local and global economic developments. SAB's inclusion in the main indices gives it a relative weight in investment fund decisions, making its movements a focal point for analysts and market followers.

By the end of 2023, SAB's assets exceeded 600 billion SAR, supported by the expansion of its financing portfolio and an increase in customer deposits. The continued growth of assets in 2024 and 2025 reflects the bank's ability to attract new customer segments amid challenges posed by global economic fluctuations. The bank's operating revenues for the third quarter of 2024 exceeded 10 billion SAR, with profits before zakat nearing 500 million SAR. This performance is attributed to increased interest income resulting from loan growth, particularly in the housing, energy, and Vision 2030 sectors. In the first quarter of 2025, financial results showed a slight increase in quarterly profits, with a noticeable improvement in interest income and a decline in operating expenses. This balanced growth has bolstered market confidence in SAB's ability to achieve stable results even amid rising interest rates and changes in the economic environment. The ongoing expansion of digital services and innovation in banking products contribute to enhancing the bank's portfolio and attracting new customer segments, especially in the small and medium-sized enterprise sector.

At the beginning of 2024, SAB's stock price was around 40 SAR, gradually rising to the range of 50–55 SAR by the end of 2024 and the beginning of 2025. This increase reflects improved bank results and market confidence in the Saudi banking sector. The bank's market capitalization exceeded 75 billion SAR by mid-2025, placing it among the top 15 listed companies in Tadawul. The price-to-earnings (P/E) ratio for SAB's stock ranges between 10 and 12 times, a level consistent with other major Saudi banks and reflecting stable profits and moderate growth expectations. The annual dividend yield for shareholders averaged 5–6% in 2024 and 2025, with regular semi-annual and annual distributions. SAB's stock is characterized by high liquidity, making it a preferred choice for investors seeking relative stability and periodic distributions. These financial indicators are continuously updated on the official Tadawul website, allowing investors to track stock performance accurately in each trading session.

SAB maintains a regular cash dividend distribution policy, aiming to achieve an attractive return for shareholders without compromising capital adequacy levels. Dividend distributions for 2024 amounted to approximately 0.60 SAR per share, equivalent to 6% of the nominal value of the share. This yield is among the highest in the Saudi banking sector and reflects the bank's ability to achieve strong operating profits. In addition to periodic distributions, the bank has implemented long-term incentive programs for employees, including share buybacks or granting stock options at specified rates, aimed at enhancing talent loyalty and performance motivation. The board of directors occasionally approves capital reductions to support incentive programs without affecting the core capital structure. Distribution policies are reviewed annually based on quarterly results and the bank's capital plans, considering the guidelines of the Saudi Monetary Authority and the Capital Market Authority to ensure sustainability and efficiency.

SAB offers a wide range of banking services, covering individuals, companies, and investment institutions. Individual services include current and savings accounts, mortgage and auto financing, and various credit cards. Corporate services include major project financing, cash management, treasury services, and credit facilities. In the investment field, the bank provides asset management, investment funds, financial brokerage, and Islamic financing solutions through a specialized window. The bank benefits from its international expertise, especially through its partnership with HSBC, in facilitating foreign transactions and international trade. SAB's digital services have significantly evolved, with advanced platforms like 'SAB Online' and mobile applications launched, providing customers with a comprehensive digital banking experience that meets the needs of the new generation and supports startups and small businesses.

SAB ranks third or fourth among Saudi banks in terms of size and influence, facing strong competition from the National Commercial Bank (SNB), Al Rajhi Bank, Riyad Bank, and Banque Saudi Fransi. SAB is distinguished by its diversified portfolio between conventional and Islamic financing, its wide geographical spread, and its ability to manage international operations thanks to its legacy with HSBC. While SNB dominates the largest market share and Al Rajhi Bank is known for Islamic financing, SAB excels in providing advanced digital services and innovative solutions for companies. Additionally, SAB has a relatively low non-performing loan rate, reflecting asset quality and efficient risk management. Competition among these banks continues in areas such as mortgage financing, supporting Vision 2030 projects, and offering digital services, with each bank focusing on meeting the needs of specific customer segments and expanding its market share.

SAB has invested heavily in digital transformation, launching advanced electronic banking platforms and mobile applications that support remote banking operations. 'SAB Online' is one of the first platforms to provide integrated digital services for individuals and companies, with ongoing support for artificial intelligence technologies in customer service. Through this transformation, the bank aims to enhance operational efficiency, reduce costs, and provide secure and fast banking experiences for customers, especially in a competitive environment where demand for internet and mobile services is rising. The bank is also working on developing open banking services and linking them to emerging business platforms. Technology plays a crucial role in attracting the younger generation and facilitating e-commerce and international transfers, further enhancing SAB's position in the Saudi digital banking landscape.

SAB actively participates in financing Vision 2030 projects, whether in supported housing or energy, tourism, and infrastructure projects. The bank occupies an important position in financing small and medium-sized enterprises and supporting economic transformation initiatives promoted by the Saudi government. SAB also funds national housing programs and contributes to financing major projects like NEOM and Amalia, offering tailored financing solutions for companies involved in these projects. On the social and environmental front, the bank has launched initiatives to support green financing and environmentally friendly projects, in line with global trends towards sustainability. This participation plays a role in enhancing the bank's position as a strategic partner in national development and achieving the ambitious goals of Vision 2030.

SAB's management maintains high levels of capital adequacy, with the capital adequacy ratio (CAR) exceeding 18% in 2025, surpassing the regulatory requirements of the Saudi Monetary Authority. This strong reserve enhances the bank's ability to withstand economic shocks and fluctuations in interest and credit rates. The bank follows conservative policies in granting loans, with a particular focus on low-risk sectors and efficient management of non-performing loans. The bank also establishes financial provisions to cover potential risks and employs advanced methods in operational and credit risk management. Internal risk teams continuously monitor developments in local and global markets, focusing on sensitive sectors such as tourism, aviation, and commercial real estate. The Saudi Monetary Authority requires banks, including SAB, to update risk management plans annually to ensure financial stability and protect the rights of depositors and investors.

SAB recorded a stable net profit of nearly 2 billion SAR in the third quarter of 2024, supported by an increase in mortgage loans and new financing, despite a contraction in the net interest margin due to rising global interest rates. Recent periods have seen management restructuring and the transfer of some investment activities to Alawwal Investment, a subsidiary of the group. The bank also launched a share buyback program to support long-term employee incentive plans. SAB benefited from increased interest revenues, while borrowing costs rose slightly due to SAMA's policies in transferring US interest rates. The bank's financial indicators remained stable, with enhanced liquidity and capital adequacy, while the new strategy was directed towards seeking unconventional investment opportunities in commercial real estate and Gulf partnerships. The bank's general assembly also discussed the possibility of adopting full digital transformation in some branches, enhancing the bank's competitive position in technology.

SAB faces a range of risks associated with fluctuations in oil prices, changes in interest rates, and financial market regulations. Rising interest rates impact deposit costs and compress interest profit margins, while a decline in loan demand or economic slowdown can lead to reduced revenues. Intense competition from other banks also poses a challenge for the bank in maintaining its market share. In response, the bank enhances its financial reserves and diversifies its income sources to mitigate the effects of these risks. The risk management relies on monitoring sensitive sectors and creating additional provisions when necessary, following conservative investment policies. The bank also monitors regulatory and technological developments to ensure compliance and product development that meets shifts in the market and society.

SAB enjoys high credit ratings from Fitch, Moody's, and Standard & Poor's, maintaining an AA+ rating in 2025. These ratings reflect the bank's strong financial position, asset quality, and efficient capital and risk management. The political and economic stability in Saudi Arabia, along with strong regulatory support from the Saudi Monetary Authority, contributes to the positive outlook for the bank. Additionally, transparency in financial disclosures and annual reports enhances the confidence of both institutional and individual investors. The bank benefits from investor confidence in the Saudi financial market, which is reflected in stable stock prices and strong liquidity, helping to attract new foreign and local investments.

SAB's stock performance can be monitored in real-time through the official website of the Saudi financial market (Tadawul) via the dedicated stock page: /stocks/1111/. This platform provides updated information on stock price, trading volume, liquidity indicators, and daily price movements. It also offers periodic reports on financial results and regulatory disclosures. In addition to Tadawul, applications like Argaam Live and Tadawul App provide instant data and in-depth analyses of stock performance and technical indicators. It is always advisable to rely on official sources to track stock movements and assess financial indicators, with a necessity to consult a licensed financial advisor before making any investment decisions.