SABB

SAUDI BRITISH BANK HSBC S SAUDI ARABIAN EXPERIENCE
Powerpoint Templates
TEAM MEMBERS ABIN JOMY MAYA MURALIDAREN SAMEER PATIL VINIT MISHRA VISHNU MOHAN
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CONTENTS
Introduction Saudi Arabia PESTLE Analysis Saudi Arabian Banking Industry Islamic Financing HSBC Saudi Arabia (SABB) Strategy Products & Services SABB SUCCESS??? Key Learnings
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SAUDI ARABIA
Largest Country in Western Asia, Second Largest in the Arab World in terms of land area. Second Largest Oil Exporter. Absolute Monarchy. Joined the WTO in 2005. Founder Member-Arab League. Literacy Rate:80% Ethnic Mix: Arabs :90% Afro-Asian:10%
Powerpoint Templates Page 3
PESTLE ANALYSIS POLITICAL SAUDI ARABIA

STRENGTHS WEAKNESS
Business friendly government regulations. The country is home to several violent extremists groups. The countrys ample oil reserves The crackdown on extremists has been Country is the world's largest oil exporter. used as an excuse for the ruling family to silence dissenters.
OPPORTUNITIES
THREATS
Democratization gradually implemented The political alliance with the US has in the country been a double-edged sword. The media are reportedly opening up to a wider range of political views. Ongoing struggle between modernizers and the conservatives .
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PESTLE ANALYSIS ECONOMIC SAUDI ARABIA

STRENGTHS Main OPEC swing producer WEAKNESS High dependence on oil sector
Recent oil price boom boosted growth Private sector dependent on expatriate in the non-oil sector labor. Growing local population means solid domestic demand for goods, services and infrastructure. OPPORTUNITIES A favorable business environment. THREATS Extreme reliance on oil sector.
Slower growth and lower liquidity will Perceptions of high security risk deter bring inflation down domestically. some investors as well as adding to the costs of insurance. Powerpoint Templates Page 5
PESTLE ANALYSIS
SOCIAL SAUDI ARABIA The country s population has increased. Imported talented individuals and non-Saudis - one-fourth of the population. Emphasis on technical education. Adherence to Islamic values and maintenance of social stability.
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PESTLE ANALYSIS
TECHNOLOGICAL SAUDI ARABIA Saudi Arabia is now becoming technological focused. The spending on connectivity and human resources has increased. Efforts are also being made to make IT an integral part of the Saudi Arabian educational system. Internet was introduced late in 1999 Internet has seen a significant growth
PESTLE ANALYSIS
LEGAL SAUDI ARABIA The Saudi civil legal system is based on the Share a. No exchange control regulations governing the repatriation of funds, profits or capital after corporate dissolution. Immigration:- Companies are required to register their employee s contracts with the Ministry of Interior Affairs. Employment Law:- Employment matters in the Kingdom of Saudi Arabia are governed by the Labor Law.
PESTLE ANALYSIS BUSINESS ENVIRONMENT SAUDI ARABIA

STRENGTHS WEAKNESS
Geographically, the country is well placed. Privatisation has been slow. Membership of the GCC -duty-free access The education system is not attuned to the to markets in Bahrain, Oman, Kuwait, Qatar needs of the private sector, with only . limited technical training. Membership of WTO.
OPPORTUNITIES
THREATS
Government investment in training for Perceptions of high political risk add to 'Saudisation' process. the costs of insurance and private security Joining the WTO and an FTA with the US mean liberalisation will continue. The 'Saudisation' process has been Regional petrodollars.. economy liquid with
guards.
slow.
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SWOT ANALYSIS SAUDI ARABIA
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Saudi -Banking Industry

Modern banking system in Saudi Arabia has its roots in Saudi Arabian Monetary Agency (SAMA) . The Capital Market Law, passed in 2003, eliminated barriers to foreign financial institutions. No bank has ever failed in Saudi Arabia.
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SAMA
Issuing the national currency, the Saudi Riyal Supervising commercial banks Managing foreign exchange reserves, promoting price and exchange rate stability Ensuring the growth and soundness of the financial system Operating a number of cross-bank electronic financial systems
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SAUDI BANKING POTENTIAL

Saudi Arabia has one of the largest and fastest growing banking markets in the Middle East. It is expected that the banking assets in the Kingdom will grow at a CAGR of around 18% during 2010-2013. Increased demand for consumer and corporate financing fuels growth. Islamic banking -an important aspect of the Saudi banking industry. The Kingdom, in terms of pool of funds, is the largest player in the global Islamic finance market. Private sector dominates the Kingdom s banking sector and accounts for the bulk of credit extended as well as deposits received.
Islamic Financing
Islamic finance is based on shariah, an Arabic term that means Islamic law. Shariah provides guidelines for aspects of Muslim life, including religion, politics, economics, banking, business, and law. Shariah-compliant financing (SCF) constitutes financial practices that conform to Islamic law. Saudi Arabian nationals follow Shariah.
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Shariah Principles
Ban on interest (Riba) Ban on uncertainty. Promote ethical investments that enhance society. Basic Principle: Sharing of Profit & Loss.
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TECHNIQUES
Profit sharing(Mudharabah) Joint venture (Musharakah) Cost plus (Murabahah)
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HSBC
Hong Kong and Shanghai Banking Corporation-started in the 17 th Century. World s local bank- 8,500 offices in over 88 different countries. Revenues (m)-88,002 (2011) Number of employees-331,458 Origin of ownership-Hong Kong HSBC Saudi Arabia-JV b/w HSBC & Saudi British Bank.
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ENTRY STRATEGY
HSBC's decision to enter the Gulf region- a part of the group's thrust on globalization in the 1950s. In 1959, the company commenced its operations in the Middle East by purchasing the British Bank of the Middle East.
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SABB
SABB-The Saudi British Bank-associate of HSBC JV -60% Saudi Nationals 40% HSBC Holdings Plc Capital-SAR 7500 Million Profit-SAR 1,883 million(2011) 111 Branches in SA 18 exclusive ladies branches.
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BANKING DIVISIONS
Personal Banking Division Investment Banking Division Private Banking Division Commercial Banking Division Amanah Islamic Banking Division
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MARKETING MIX
Place 99 branches across Saudi Arabia. 18 ladies only branches. Price Pricing of Islamic products govern the Shariah law for Islamic financing.
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PRODUCTS Products that are different from their other HSBC products worldwide are Takaful (Insurance),Credit Cards & Amanah Products
PROMOTION Organizing and sponsoring social events. Focus on the global image to create a positive brand equity. Word of Mouth Publicity
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SEGMENTATION
Demographic Segmentation Gender: Exclusive ladies branches Income: Wide variety of products caters to customers of different income groups Occupation: Personal & Commercial Religion: Amanah Banking Branches.
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SWOT ANALYSIS
Strengths Strong Domestic Market Presence Benefiting from Global Business Expertise Expertise in Islamic banking 86% of employees are Saudi nationals Weaknesses Decline in Net Interest Income
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Opportunities Growth Prospects in Saudi Arabian Banking Sector Growth Prospects in Takaful Market Promotion of Islamic banking by Saudi government
Threats Uncertain Market and Economic Conditions Sluggish credit growth rates Fluctuating Oil prices
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Amanah Islamic Banking

Islamic financial services division of the HSBC Group Responsible for the development of Islamic financial products. Headquartered in Dubai and with regional representations.
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SABB SUCCESS ???

Euromoney Awards for Excellence. Adjudged 'Best Bank' and the 'Best Equities House The company was lauded as the most innovative banking products and services provider in the kingdom of Saudi Arabia Bank's impressive financial performance- testimony to its success. Islamic banking products-received wide spread acceptance.
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SUCCESS FACTORS
Global Strategy-emphasis on globalization. Customer first policy. High Quality Service-given top priority. Customer centric product development policy. Emphasis on providing unique banking experience to customers.
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KEY LEARNINGS
Importance of understanding culture. Design products & services with emphasis on localization. Importance of local involvement. Creating a successful brand image in the minds of customers.
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SAUDI BRITISH BANK HSBC S SAUDI ARABIAN EXPERIENCE

PESTLE ANALYSIS POLITICAL SAUDI ARABIA

PESTLE ANALYSIS ECONOMIC SAUDI ARABIA

PESTLE ANALYSIS BUSINESS ENVIRONMENT SAUDI ARABIA

SWOT ANALYSIS SAUDI ARABIA

Saudi -Banking Industry

SAUDI BANKING POTENTIAL

Amanah Islamic Banking

SABB SUCCESS ???

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