Barclays Bank SWOT Analysis

Keywords: swot barclays, barclay swot, bank swot

Barclays was started by the British Empire and it characterizes as the British banking from twentieth century. Barclays appeared as the most significant bank of Britain in 1950. Because of the ferocious competition in 1980 and due to its lending policies Barclays banking became imprudent. Later on Barclays built its empire in 50 countries.

Innovation and adoption of good marketing strategies leaded the Barclays as one of the largest banks all over the world. Main objective of Barclays is to give value to the clients and clients. Barclays has employed almost 135, 000 employees in 50 countries. It offers devoted services to small and medium businesses. Barclay's income before tax is approximately 7 billion. This profit returns shows the nice portfolio management of business. Services that are providing by bank are unique and innovative.

Ambition of Barclays is to be one of the leading banks in across the world and to provide the services to the financial industry globally. Meaning thereby, providing full and impressive retail and wholesale services to the clients. Barclay's strategy focuses on the identification of needs of customers and then providing them services accordingly. Barclays follows the principle of earning profit, investing that profit and therefore growing.

BARCLAYS SWOT ANALYSIS

Strengths

Strength of the company is taken as the inner element. The strength factor represents and focuses those elements within the company that become the strong points of that pertaining company. Barclays is founded in 1896 and it is enjoying benefits from the strong penetration exists in the banking industry. Barclays is providing its services in 50 different countries. Barclay's group is one of the leading and rapidly growing groups on the planet. Main strength of Barclays is the fact in banking sector and by asset base it is the third major bank. And in market capitalization perspective it is third most significant bank in United Kingdom. Barclays has the wide customer's base and strong growth base in every around the world.

Barclays networking for the distribution is very strong and it includes multi-channels available for distribution networking. Branches, automated teller machines, online banking services, on phone banking services and its own relationship managers are all regarded as its sources and channels of networking.

Barclay's personnel and employees tend to be more innovative and are more passionate towards their work. One of the strength factors of the lender is its operational efficiency. Physical and financial resources open to banks are very good. Its functions are well diversified. Barclays diversified operations are the retail banking, consumer lending, home financing, lending to small and medium enterprises, corporate banking, banking in investments and asset management.

Barclays was the first bank that launched and introduced the bank cards in United Kingdom and till then Barclays brand name has embedded in the minds of the customers. Strong brand is among the most strength of the Barclays bank now. Bank has completed its businesses in bank card line by making use of the sponsorship that was provided by the English premier league.

Financial performance of Barclays bank is very good. It takes help of technology for improving its banking services as it offers response electronically to the queries of clients. Barclays provides impressive financial services to the customers by using the information technology. It really is providing online security so that thefts and frauds will be prevented. Because of this security Barclays bank is using different software. Fraud cases will be avoided by using the software.

Barclays bank is geographically diversified bank and it performs its business operations in various countries. Branches of Barclays are widely spread in all on the worlds. Bank takes the power from the geographical diversification and it spreads its risks widely across the countries and gets advantage of the economies of scales.

Opening of new branches of Barclays bank and renovation of the branches in various countries will attract the customers and can enhance and raise the performance of Barclay's banks. Barclay applies different marketing tools like product mix and provides importance to the services that are given to clients and therefore focuses more on the customer relationship management.

Weaknesses

Weaknesses will be the internal factor of the business. Company is influenced adversely because of the presence of the elements. Company should try to eradicate these negative factors to be able to enhance its business performance. Impairment charges in Barclays bank are incredibly high. These charges occur because of the impairments of loans, more chances of bankruptcy and poor loan recovery management. Bank efforts for the recovery of loan from businesses and bank cards are not good.

Barclays brand image has afflicted a lot by the unethical activities and wrong promotion of bank through advertisement. Barclays was also fined for these unhealthy and adverse promotions. More controversies and questions arouse due to that brand image. Due to this deteriorating and bad brand image, Barclay's performance has affected a lot. Investors give more importance to the ethical issues and after these unhealthy activities many investors drew their investments back from the bank.

Bank's capital ratio is significantly less than the average industry ratio. Bank can face difficulty in the case of financial crises due to this low capital ratio. Because of the inefficiency of operations, bank has low return on assets and less income.

Moreover Barclays cost on income is more as compare to other banks. More cost income ratio of bank represents the inefficiency of the business enterprise operations of the lender. Barclays didn't cope up with the integration between information technology, business processes and brand. It didn't gain success in the planned synergies and outcomes.

Barclays has fewer branches around Asia. Banking industry is emerging and growing in Asia. Barclays didn't take these openings in account which is known as to be the strategic negligence of the lender. Bank can avail opportunity by opening the branches in Parts of asia. Bank is paying large bonuses and incentives to its directors and this is just about the way to obtain criticism.

Bank's dividend policy is less attractive to the investors and as Barclays is paying fewer dividends to its investors. Bank's marketing strategy is not sufficient and people are less alert to the bank due to the lack of marketing campaigns and promotions. Barclays are paying less consideration for the adoption of the present day technology and equipments. Sales promotions of Barclays are not striking the customer's attention they need to be improved.

Opportunities

Opportunities are external factor for the business. As the name indicates this factor identifies the opportunities available in the market for the business. Company can gain competitive edge on other companies by availing and utilizing the opportunities available to it. Numerous opportunities can be found to Barclays because of the increase trend of globalization. Banks are performing their operations globally and Barclays can take reap the benefits of this positive outlook of globalization. Using the growth of the global banking industry Barclays being the best and well positioned financial institution can exploit the financial market by expanding its deposit base.

Barclays can take advantage of emerging economies by strengthening its positions in the retail and commercial banking functions in those growing economies. Diverse opportunities for the growth of revenues are available in United Kingdom for Barclay. Trend of corporate lending is also increasing and Barclays can exploit this opportunities giving more loans to corporate sector. Operational efficiency of Barclays can be increased by applying the good asset management principles.

Increase in mergers, acquisitions and renovations in banking industry give the positive opening to banks. Barclays can utilize this opportunity as investment banking industry is likely to expand and it can increase its operating cash flows by causing acquisitions. Because of off shoring of financial institutions cost of investment has decreased. Banks are opening their branches in those countries that are less expensive to get the cost efficiencies. Barclays can fortify its employed in Asian banking industries like in Indian market in order to achieve the cost efficiencies and gain more profit and return margins.

Objective of Barclays is to supply the good services to customer worldwide. This objective provides lots of opportunities to Barclays like cross-selling its products across many countries. Barclays can exploit, expand its branches, avail opportunities and set its operation in the Asian banking industry. Barclays can use high tech-technology with the addition of more websites which has sufficient information of Barclays banking.

Provision of welfare is also ceased in those countries where the cost to the federal government has increased but Barclays can make use of the trend of provision alone. Barclays can attract more investors by formulating good dividend policies and by providing good returns to the shareholders. Use of good online marketing strategy like product mix enhances the efficiency of the business enterprise and Barclays can use the tools and techniques of good marketing strategies for grabbing the customer's attention. Barclay can also snatch other bank's customer by giving good services that conforms to the necessity of the customer.

Cost efficiencies can be gained by Barclays through the opening of branches in the low cost locations like in Asian countries. Integration of business processes with the info technology can offer more synergy and success to the lender. Barclays can strengthen its brand image by conducting more marketing campaigns, advertisements and promotions.

Threats

Threats are also the external element of the company. Threat factor in the SWOT analysis diverts the attention of the business towards the pertaining risks in market. Company must avoid these threats by firmly taking protective measures against them. Financial markets have become volatile in recent few years. This financial threat influences the investment opportunities in markets. Investors are hesitant to purchase financial institutions due to the financial volatility. Barclay's revenues from investments are also afflicted by this unstable market behavior.

Interest rates fluctuations discourage the consumer to have the services of credit cards. When interest fluctuates rapidly then consumer becomes conservative and does not take the charge card borrowings. Barclay's credit card facilities are also damaged by these fluctuations as many individuals are not availing the visa or mastercard borrowings now.

Barclays in addition has threat from other foreign banks as these banks can take high proportion and percentage of the total assets within the banking industry and can reduce the market shares of Barclays bank.

Barclays must face many challenges before acquiring the similar size bank or institution as it includes failed to acquire the Royal bank of Scotland and there are chances for this reason reason that personnel of Barclays bank will resist the integration and acquisition of bank.

Internet and online banking frauds are increasing with the increase in the knowing of the technology. These frauds are done through system hacking, emails and through telephonic calls. Barclays can suffer a lot out of this threat in future.

Barclays can be sued as it is famous of earning wrong investments from its deposits and from other investments. Barclays has to give proper consideration towards these decisions in future. Bank can go in the state of bankruptcy if these wrong investments decisions of Barclays will continue in the foreseeable future.

More threats are present to bank due to the vicious competition in the banking industry as customers can go to other banks for the same product because of the other banks specialized approach. Customers are demanding more innovative products and it has become difficult for the bank to deal up with these rapid innovations. Bank must go for online products and different products mix for gaining the clients attention towards its products.

Expansion of branches in Asian countries seems to be risky for Barclays which situation depicts that other finance institutions in banking industry are in more strong positions than Barclays. Barclays is also facing threats from investment as Barclay's dividend policy is least attractive to the investors which is not giving good dividends to investors on the shares. Barclays can face difficulty in gaining the investors' attention if you won't amend its dividend policy.

Barclays can face threat in conditions of its customer service from other rivals like if competitors are advertising their customer services and their care about the clients then Barclays can lose it customers and also to retain the customers Barclays has to provide more impressive range of services than its competitors.

CONCLUSIONS AND RECOMMENDATIONS

Barclays is one of the greatest financial service groups in United Kingdom. Barclay's image is becoming imprudent due to its ineffective policy structure. It was founded in 1896. In market capitalization perspectives and asset base it is third most significant bank in United Kingdom. Barclays has good availability of human and financial resources. Barclays has launched and introduced the credit cards first-time in UK. Launching of credit-based card has embedded the nice brand image of Barclays in all over the world.

Barclays networking of distribution channels are very strong. Banks branches, online banking services and its own customer relationship management are believed as its networking sources. Bank has branches in several countries so that it can take good thing about diversifications and can spread its risks widely across these countries. Barclays may take advantage from acquisitions and mergers and can increase its operating cash flows. By off shoring Barclays can gain and revel in the good thing about cost efficiencies. This cost efficiencies can be availed by opening branches in low priced locations like in Asian countries.

Barclays should improve its loan recovery management and really should reduce the chances for the loans impairments. Bank should pay heed on its advertisement as its brand image has afflicted a lot by adverse promotions. Banks should improve its asset management procedures and its profit margin ratio. Dividend policy of Barclays in not efficient and its dividend payout ratio is not good. Investors demand good return on the investments and if they do not get good dividends then you can find large probability that they can acquire their investments bank. Also sales promotions of Barclays are not grabbing the customer attentions.

Barclay's investment opportunities have adversely affected because of the high volatility in financial markets. Investors are taking right out their money from market due to rates of interest rapid fluctuations. Barclay's revenues are also afflicted by this market volatility. Barclays should employ high plus more innovative technologies as fraud cases in banking industry is increasing. Barclays should improve its strategic decisions because it is famous of earning wrong investments. Bank can suffer a great loss due to these wrong investment decisions. Bank should provide more progressive products and good services to customers. It should give more importance on the customer relationship management for the retention of loyal customers.

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