SABB would own 51 percent of the new entity, to be known as HSBC Saudi Arabia, but HSBC would retain full management control, HSBC said in a statement posted on the Hong Kong stock exchange.
The merger was subject to regulatory approval and was expected to complete by the end of this year, HSBC added.
“This announcement underscores HSBC’s commitment to its business in the Kingdom of Saudi Arabia, and to its joint venture partnership with SABB,” Simon Cooper, chief executive of HSBC Middle East and North Africa said.
The partnership will be a full service investment bank in Saudi Arabia undertaking asset management, advisory and debt capital market activities among other services, HSBC said.
Several regional and international firms have set up shop in the Kingdom lured by rapid economic growth.
No financial details of the transaction were provided.
Separately, HSBC Saudi Arabia has received approval from market regulator Capital Market Authority (CMA) to double its capital to SR500 million ($133.3 million), a bourse statement said.
HSBC also received CMA approval to amend its business profile in the region and is now authorized to conduct dealing as principal, agent and underwriter and offer custody services, the statement said.
