Thursday, November 6, 2008
Monday, September 29, 2008
Strong presence in India – 150 years of banking in India.
Provides the convenience of online banking to access information about various accounts and also transfer money
Strong Brand Name – worldwide presence.
Variety of services offered
ATM coverage not as good as other private banks
Services do not cater to the mass
Advertising is not aggressive
Credit card facilities not as good as other private banks
Not many branch networks
Government removing restrictions on foreign banks in 2009, would allow those banks to open shop in India. Stan C has an opportunity to increase its branches in India, and further utilize its brand image here.
Scope for more effective use of their brand name
Can start new departments like a brokerage firm
Emergence of Indian private banks
Nationalization of banks – these banks have many more branch networks than foreign banks
Some unique strategies:
To build and grow strong businesses in East and South East Asia- the Asia Pacific Region.
To enhance historical position in the Middle East and South Asia region.
To provide support in newly industrialized and emerging markets.
Capitalize on the good track record in these regions by building unique position and image among the target customer segment and being responsive to the needs and serve better than the competitors.
To concentrate operations in the activities that have direct impact on the communities of the countries; help the country and its economy and at the same time earn profit in an ethical way.
Friday, September 26, 2008
Objective of SBI: “Purposeful banking sub serving the growing and diversified financial needs of planned economic development of the country”
BRAND NAME: SBI Bank has earned a reputation in the market over the period of time(Being the oldest bank in India tracing history back to 1806)
Wide Distribution Network:
Excellent penetration in the country with more than 10000 core branches and more than 5100 branches of associate banks (subsidiaries).
Diversified Portfolio: SBI Bank has all the products under its belt, which help it to extend the relationship with existing customer.SBI Bank has umbrella of products to offer their customers, if once customer has relationship with the bank. Some Products, which SBI Bank is offering are: Retail Banking Business Banking Merchant Establishment Services (EDC Machine) Personal loans & Car loans Insurance Housing Loans
Government Owned: Government owns 60% stake in SBI. This gives SBI an edge over private banks in terms of customer security.
Low Transition Costs-SBI offers very low transition costs which attracts small customers.
The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change.
Though SBI cards are the 2nd largest player in the credit card industry, it has the highest non performing assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec 2007).
Modernisation: SBI lags with respect to private players in terms of modernisation of its processes, infrastructure, centralisation, etc.
Merger of associate banks with SBI: Merger of all the associate banks (like SBH, SBM, etc) into SBI will create a mega bank which streamlines operations and unlocks value.
Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further increase its reach.
Increasing trade and business relations and a large number of expatriate populations offers a great opportunity to expand on foreign soil.
Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of SBI bank.
Consumer expectations have increased many folds in last few years and the bank has not been responsive enough to meet them on time.
Private banks have started venturing into the rural and semi-urban sector, which used to be the bastion of the State Bank and other PSU banks
Employee Strike: There was an employee strike in the year 2006 which disrupted SBI’s activities. This can be repeated in the future.
Objective: “To serve as the preeminent financial advisor to companies, governments and investors from around the world.”
Market leader: Morgan Stanley also operates in 33 countries around the world with 600 offices, with an approximate employee workforce of 45,000.The company reports US$779 billion as assets under its management.
Good reputation in market: Morgan Stanley has been associated with some of the biggest corporate financings and public offerings in history, most notably the U.S. rail financing of 1939, Shell Union debenture of 1946, Jersey Standard's transaction of 1949, Apple common stock IPO of 1980, Conoco IPO of 1998 and the Google IPO in 2004.
Ability to continuously reinvent itself: Since its founding in 1935, Morgan Stanley and its people have helped redefine the meaning of financial services. The firm has continually broken new ground in advising its clients on strategic transactions, in pioneering the global expansion of finance and capital markets, and in providing new opportunities for individual and institutional investors. Morgan Stanley's growth, which parallels the history of modern finance. The firm credits itself with the first ever computer model for financial analysis.
Uncertainty about management: The company found itself in the midst of a management crisis in the late 90s that saw it lose a lot of talent and competence and ultimately saw the firing of its then CEO Philip Purcell in 2005. Since then Morgan Stanley has been undergoing a massive restructuring which also involved job cuts across several of its businesses.
Cyclical nature of business: Performance of Morgan Stanley is cyclical and dependent upon economy. As the economy is cyclical, the firm goes into a bad phase when the economy goes form peak to trough.
Controversies and Lawsuits: In 2003, Morgan Stanley agreed to pay billions of dollars in order to settle its portion of various legal actions and investigations brought by Eliott Spitzer, the Attorney General of New York, the National Association of Securities Dealers (Now FINRA), the United States Securities and Exchange Commission, (SEC) and a number of state securities regulators, relating to fraud that was allegedly perpetrated upon retail investors by a dozen of the largest investment banking securities brokerage firms.
Emerging markets: Morgan Stanley is enhancing its presence in South Korea and Russia by obtaining licenses. It can use its reputation to expand rapidly in emerging markets to boost its growth.
Rise in global savings: Global saving has risen steadily over the past several decades, but contrary to widespread belief, the rise in recent years has been no faster than the expansion of world GDP. In fact, the overall global saving rate stood at 22.8% of world GDP in 2006 – basically unchanged from the 23.0% reading in 1990. At the same time, there has been an important shift in the mix of global saving – away from the rich countries of the developed world toward the poor countries of the developing world. This development, rather than overall trends in global saving, is likely to remain a critical issue for the world economy and financial markets in the years ahead.
Utilization of equity capital: Employment of Morgan Stanley’s equity capital in investment ideas would increase returns to the firm
Competition from big players: The investment banking business is flooded with high competition from big players like Citigroup Global, Goldman Sachs, Lehman Brothers, etc.
Subprime Crisis: The subprime mortgage problem has now yielded a full-blown credit squeeze on Wall Street with securities firms' stock prices at fire-sale levels. The new fire-sale buyers are the so-called sovereign wealth funds, and China's are the most prominent.
High human capital turnover: Investment banking business is highly dependent on individuals. Human Resource management is very critical in investment banking.