Strategic Management Report Latest 3

8/10/2019 Strategic Management Report Latest 3

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STANDARD CHARTERED BANK (PAKISTAN) LIMITED


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TABLE OF CONTENTS

Introduction

Acknowledgement

Executive summary

Objective

Standard chartered bank Pakistan

Characteristics Awards and achievements

Vision statement

Mission statement

Core values

Swot analysis

Strategies

Financial strategy

Marketing strategy

HR strategy Supply chain strategy

Competitor analysis (MCB)

Financial strategy

Marketing strategy

Ratio analysis

Conclusion

Recommendation

Reference


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INTRODUCTION:-

Standard Chartered Bank was formed in 1969 through the merger of two separate banks, the

Standard Bank of British South Africa and the Chartered Bank of India, Australia and China.

These banks had capitalized on the expansion of trade between Europe, Asia and Africa.

The Chartered Bank:

The Chartered Bank was founded by James Wilson following the grant of a Royal Charter by

Queen Victoria in 1853.

The bank opened in Mumbai (Bombay), Kolkata and Shanghai in 1858, followed by Hong Kong

and Singapore in 1859.

The Standard Bank:

The Standard Bank was founded in London in 1862 by John Paterson from the Cape Colony inSouth Africa, and started business in Port Elizabeth in the following year.

Standard Chartered has operated for over 150 years in some of the worlds fastest-growing

markets, across Asia, Africa, and the Middle East. Standard Chartered is one of the worlds most

international banks. Their global network provides banking services in one of the worlds most

dynamic markets. Standard chartered believe that they can positively impact the economy and

the communities where they operate. They give back to the communities they operate in by

sponsoring inspirational people, projects and events.

TheChartered

Bank

TheStandard

Bank

Standard

Chartered


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ACKNOWLEDGEMENT:-

First of all we are thankful to Almighty ALLAH (The most Gracious and The most Powerful, The

knower of Seen & Unseen), for giving us courage and power to learn and to apply our

knowledge for the benefits of mankind.

We are grateful to Sir Naeem Bhojaniwhose guidance and help has been extremely beneficial

for us in the preparation and completion of this report. We would like to thank Mr. Yasir Khan,

Relationship Manager in Standard Chartered Bank, who has also provided the information with

his superior assistance and last but not the least we would be highly grateful to Mr. Imran

Hasan Khan, for his assistance for the preparation of our report, who is a Priority Relationship

Manager in Standard Chartered.

EXECUTIVE SUMMARY:-

We know that in modern world, banks are playing a key role for the development of an

economy. In Pakistan it is not different in this case. Standard Chartered bank operating their

business with the banking activities like consumer banking, wholesale banking, personal

banking, global custodial service, international trade management, Global Institutional Banking,

global electronic banking with us from 1863.

Business opportunities day by day rising, new products and services come in every month. Need

for data and information about different topics and issue is very essential for building and

operating a business. Information plays a major role in all sector of a society, whether in social

sector or business sector. For this reason SCB Pakistan always tries to think in a different way,

which facilitates their existing customers to get their account related information and other

products like loan in an easy way.

Moreover different services of alternate channel (like: SMS banking, i-banking e.t.c) attract

potential customers to deposit their money in this bank. Since SCB loan procedure scheme is

not so difficult, feature is good and eligibility to take loan is not so complex, that's why

customers are attracted to take loan from SCB though have high interest rate compare with

other local commercial bank.


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OBJECTIVE:-

The objective of this report is to focus on the different strategies which are used by Standard

Charted Bank to facilitate their customers and to analyze its performance in terms of their

strategies, if meeting with the customers expectations or not.

STANDARD CHARTERED BANK PAKISTAN:-

Standard Chartered is the largest and fastest growing international bank in Pakistan. The bank

has been operating in Pakistan since 1863 when it first established its operation in Karachi.

The Banks serves both Retail and Corporate and Institutional Banking customers. Retail Banking

provides credit cards, personal loans, mortgages, deposit taking and wealth management

services to individuals and small to medium sized enterprises. Corporate and Institutional

Banking provides clients with services in trade finance, cash management, lending, securities

services, foreign exchange, debt capital markets and corporate finance. It also offers a complete

suite of Islamic banking solutions under its Standard Chartered Saadiq brand.

The Bank employs over 5,500 people in Pakistan and has a network of 176 branches of which 10

are dedicated Standard Chartered Saadiq branches as well as 191 ATMs.

CHARACTERISTICS:-

Leading foreign bank.

First international bank to be awarded Islamic banking license.

First to open an Islamic banking branch.

Standard Chartered was assigned a rating of AAA/ A1+ by PACRA in 2013.

AWARDS & ACHIEVEMENTS:-

Finance Asia Country Awards 2011

Best Foreign Commercial Bank in Pakistan

Best Foreign Investment Bank in Pakistan


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The Asset Triple A Awards for 2011

Best Bank in Pakistan

Best Debt House in Pakistan (for the fourth consecutive year)

Euro money Awards for Excellence 2011

Best International Trade Bank in Pakistan

Global Finance Magazine Award 2011

Best Consumer Internet Bank in Pakistan for the second consecutive year

The Asset Triple A Awards for 2011

Best Country Deal in Pakistan

First ever local currency shipping finance transaction for Pakistan National Shipping Corporation

of US D10.3bn Pakistani rupees - financing equivalent to USD 120mn.

VISION STATEMENT:-

To be the preferred provider of Leasing Products in the Market

MISSION STATEMENT:-

To create exceptional value for our clients, investors and staff; through market leadership in

providing innovative Leasing Products & Solutions, and by adopting and living our core values.

CORE VALUES:-

Courageous, Stand for what they believe to be right.

Responsive, Listen to the customers and colleagues and build strong relationships.

Creative, continuously improve the way of work, making it simpler better and fast.

Trustworthy, Do what is the best for the organization and customers.


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Strengths Weaknesses

Opportunities Threats

SWOTANALYSIS


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SWOT ANALYSIS:-

Strengths:

Market position is strong Maintain a position as a leading Asian cash management provider

SCBs modern and dynamic look appeals to the growing middle income earners

One of the most profitable multinational bank in Pakistan

Improved product proposition

Better geographic balances

Multi-cultural organization that offers opportunities to good managers.

First bank to receive the license for Islamic Banking in Pakistan

Weaknesses:

Slowness of opening an account

Loan process is time consuming

High interest rate on leasing

Lack of the availability of the employees in branches

Opportunities:

Branch expansion for rapid growth

Increase focus on value creation in wholesale banking Improve shareholders return

Build market share in consumer banking

Broadening of the demographic phase

Threats:

Dominant players in banking like NBL, HBL, UBL

Competitive products offered by the other banks

Law and order situation


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strategies

FinancialStrategy

HRStrategy

MarketingStrategy

SupplyChain

Strategy


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STRATEGIES:-

Business Strategy:

The bank has also established an Islamic Banking unit to offer Sharia compliant products and services,

with dedicated Islamic banking branches in six cities.

The Wholesale Banking Group caters to the top tier of local and multinational companies.

The Retail Banking Group focuses on trading and middle market segment primarily for building risk

assets and trade related business. MCB caters to the financing of foreign and local trade, funds transfer

and other seasonal requirements. The Bank has renovated a large number of branches and staff has

been trained for meeting the requirements of SMEs and other retail customers.

An SME Financing Division has been set up to provide customized financing solutions. The group also

focuses on the development of consumer asset products for satisfying the needs of the customers.

Financial strategy:

Standard chartered bank provides four kinds of banking services considered as (core

competencies) under its financial strategy

SCB

CONSUMERBANKING

ISLAMICBANKING

SMEBANKING

WHOLESALEBANKING


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Consumer Banking

Standard chartered provides services for

Mortgages

Credit cards

Personal loans

Auto loans

Islamic banking

Wealth management products

In order to maximize consumer convenience, they offer

24 hours phone banking

E-statements

SMS banking

ATM cards and Visa debit cards

Online banking

Wholesale Banking

Wholesale banking provides

Transactional banking

Debt capital markets

Corporate finance

Derivatives and fx options

Commodity finance and deposit products

Treasury

Islamic Banking

Standard chartered sadiqs dedicated Islamic banking team provides comprehensive international

banking services and a wide range of Sharia compliant financial products that are based on Islamic

values.

SME Banking

Standard chartered small medium enterprise banking provides services for small to medium

size companies to expand their enterprise. They offer,

Tijarat accounts

Business installment loans

Industry specific solutions

Standard chartered also provides priority banking except above services

Priority banking (a new service offered in consumer banking)


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This department basically exists for those customers who can open a minimum current account

for RS. 1 million or who open accounts of at least 2 million rupees in case of savings account.

Priority banking solely deals with customers who fit the above-mentioned criteria and not with

the regular customers. A separate teller that is only for Priority Customers deals with matters ofsuch clients. Apart from this, finding such clients and making them open accounts with SCB is

also the task of this departments staff.

Human Resource Strategy:

It is clear that SCB has acquired a globalization character and the business of the bank has more or less

spread all over the world. The bank has formulated its HR globalization polices depending on the legal &

political, economic, and cultural factors to get the maximum result in the countries it is operating. The

bank performs following HR practices and activities in Pakistan:

HR Planning

The structure of the Bank provides scope for the flexible deployment of people and to promote equity,

job satisfaction, motivation and commitment to goals, as well as providing access to career

development.

At Standard Chartered Bank, human resource planning involves forecasting the numbers of people

which will needed by the bank, and then working out the best way of obtaining then as and when they

are needed. Standard Chartered Bank makes sure that effective human resource planning processes are

in place when:

Appropriately skilled people are available to be deployed in the Banks tomeet forecast

work demands.

The Banks structure provides with opportunity for appropriate career development, and is

perceived to contribute to effective and efficient work practices.

Relevant workforce data is readily available to inform management decision making on

human resource issues.

Recruitment

The goal of recruitment program at SCBPL is to ensure that the society has a number of reasonably

practiced applicants to choose from when a vacancy occurs. Standard Chartered Bank recruits the most

creative individuals from the exterior market to supplement their internal stream of talent. SCBs Human

Resources department provides guidance on the use of aptitude tests with the minimum of 80%

eligibility criteria and has robust recruitment standards to ensure that all candidates are treating fairly,

equally and with high opinion. It has a global Graduate Recruitment Program, but prefers to hire


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individuals from the native country to provide better understanding of norms and providing value to the

customers across all businesses and functions.

Selection

Several generic standards should be meeting in any selection process, which are reliability, validity,

utility, and legality. Standard Chartered selects employees based on knowledge, skills and talent. They

are committed to providing equality of opportunity to all employees, regardless of gender, event,

nationality, age, disability, ethnic origin, or marital status.

Training & Development

Standard Chartered provides a framework within which the employee can identify the training and

development needs. Such training provides a consistent standard of management learning throughout

Standard Chartered. It also enables the employees to take all of the programs or study for individualmodules according to their particular development needs. Development Programs are carried out in the

first two years of joining, applicable to all management trainees, across the Bank. Each business and

function would decide the appropriate development needs for each individual, within this overall

framework. When SCB introduces any new service or application each concerned individual gets proper

training before its implementation.

Performance Appraisal and Evaluation

Every person is monitored and commented on his performance and thus given a rating accordingly.Theres no strict system of hierarchy being followed. The corporate managers directly talk to every

individual about his performance and achievements. They analyze each individual on the basis of his

potential, the enormity of task assigned, and how much effort is being put into it. Every individual has to

do self-evaluation before performance is reviewed and discussed with the supervisor. Each objective has

to be completed in a specific time period. The employee is told which work he has to do, how the work

is going to be done, which ways or means he is supposed to use to accomplish his task and if the

employee has any sort of problem the head of the department is there to help them.


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Marketing strategy:

Competitive Positioning

Pakistansbanking sector has remained remarkably strong and resilient, despite facing

pressures emanating from weakening macroeconomic environment since late 2010, according to the

assessment of the State Bank of PakistansFinancial Stability Review 201314.

Accordingly the banking sector is primarily dominated by major players such as Habib Bank

limited, United Bank, Allied Bank, MCB, followed by Standard Chartered and Bank Al-Habib. Some

players like Samba who recently acquired Cres Bank and acquisition of Union Bank by Standard

Chartered also added to the escalating competition among banks to gain maximum market share as

possible.

Other segments of industry pre dominantly include investment banking and investment firms who tend

to formulate indirect competition with consumer banks.

Growth Plan

The bank has ambitious growth plans. It plans to continue expanding the branch network to deliver

upon its vision of being a locally embedded international bank.In order to achieve these plans, it has

embarked upon a unique journeyof transformation through

Growth in its distribution footprint

Innovative products and services

Talented and diverse teams, and

Sustainable business strategy based upon community investment

SCBP expanded its distribution footprint by 26 branches in 2013, adding another35 branches during the

first half of the current year. The bank now operates with176 branches in 41 cities. Pakistansconsumerbanking operations ranks sixth in the Group, while in terms of branch network, it is at third position.

Pricing Strategies Involved

Various bank charges and interest rates apply on services such as:

Personal banking

Islamic banking

Wholesale banking

SME banking

Communication History

Overall communication medium in Pakistan particularly by SCB had been as under:

Billboards

Office Themes

Brochures

Sponsoring Events

TV commercials


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Segmentation& Target Market

Marketing segmentation is the process of divide customers into different groups, within which

customers possess similar characteristics and requirements. The bank segments their customers as

follows:

Individual customers: the main services provided to this segment are savings and account services,

mortgages, credit cards etc...

SMEs: this sector has grown rapidly in the cities of Pakistan. The most suitable services for the segment

are cash management, trade finance; lending...

Corporate & Institutional customers: these are large customers with extensive financial needs. In this

segment the bank provides wholesale banking services i.e. clearing and collection services, liquidity

management, treasury, advisory services...

Islamic customers: this group of customers uses financial services in line with Islamic law (Sharia).

Therefore the bank provides financial services that are in conformity with sharia. (SCB)

The segmentation enables the bank to understand each segments needs, thus design the most

appropriate marketing mix for each segment.

Marketing Mix

Products

Consumer banking

Standard Charte red provide mortgages, Credit Cards, personal loans, auto loans, deposit

accounts, and wealth management products.

Corporate and institutional banking

Corporate & Institutional Banking provides trade fina nce, cash manag ement and lending

services.

Global markets

Global Markets provides foreign exchange, interest rate management and debt ca pi ta l

m a r k e t s s e r v i c e s t h a t a r e v e r y d y n a m i c i n P a k i s t a n a s t h e r e a r e a l o t o f changes

in the economic climate.

Service Provided

Foreign Exchange

Spot and Forward

Asset & Liability management

Short Term loans/deposits

Interest rate / Liquidity management

Economic Research & Analysis

Customer Risk Management


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Non Deliverable Forwards

FX Options

Interest Rate Derivatives

Price

Standard C hartered B ank Pakistan Limited is an active price mak er in the market andhandles flows of multinationals and foreign investors in the stock m a r k e t . V a r i a b l e s e r v i c e

c ha r g e s ap pl y o n e ac h c at e g o r y o f s e r vi c e offerings, these ranges from bank charge rates

to transaction costs etc.

Place

Standard Chartered Bank (Pakistan) Limited is Pa kistan's o ldest and lar gest foreign bank

with over 176 branches in the country. The history of Standard Chartered in Pakistan dates back to 1863,

when the Chartered Bank of India, Australia and China first established its operations in Karachi.

I n 2 0 0 6 S t a n d a r d C h a r t e r e d B a n k a c q u i r e d P a k i s t a n ' s U n i o n B a n k . O n 3 0 D e c e

m b e r 2 0 0 6 , S t a n d a r d C h a r t e r e d m e r g e d U n i o n B a n k w i t h i t s o w nsubsidiary, Standard Chartered Bank (Pakistan), to create Pakistan's sixthlargest bank.

Promotion

Standard chartered bank used different promotion tools for different activities as described above. They

use the following tools

Advertising

Publicity

Sales promotion

SUPPLY CHAIN STRATEGY:-

The value chain of standard chartered is based entirely around the production of services that relies on

cashin both physical and electronic formas the "raw materials," with depositors, lenders and

borrowers as customers that appear at both the beginning and the end of the chain. In addition, there is

also the multiple network of distribution channels and platforms through which products and services

are offered to or accessed by customers. As the bank leverage new technologies and collaborate with

third-party service providers to optimize service delivery across these channels, the emergence of e-

Bankingas well financial inclusion products such as mobile money, mobile banking, electronic wallets,

and agency bankingare adding to the complexity of the banking supply chain and driving adoption of

the value chain concept to banking.

The value chain of SCB is unique because cash is at the center of consumption of a banks products and

services by customers. Consequently, whenever customers use these products and services, there is

movement of cash in and out of the bank. The demand chain relates to customer utilization of products

and services across all distribution and consumption channels, such as ATMs, branches, mobile devices,

and Internet and point-of-sale terminals that lead to cash outflows in the form of withdrawals, transfers,

payments and borrowing. The supply chain also relates to the utilization of products and services that


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leads to cash inflows in form of deposits, on-lending, and investment in financial instruments and the

banks cash reserve. The third part of the value chain relates to the design chainthe research, design

and development of products and services.

The goal of integrated value chain planning in SCB is to reduce the costs of funds and distribution,

minimize excess cash, prevent cash shortages, and increase income-earning opportunities from

customers utilization of products and services and investment of excess cash.

COMPETITOR ANALYSIS:-

MCB as Main Competitor:

Since standard chartered bank is the 6th

largest bank in Pakistan, their main competitor is MCB which is

on 5thin ranking. Following are some of the strategies which are applied in MCB and which gives an edge

to them over Standard chartered Bank.

Financial Strategy:

MCB provides following services which gives them an edge over Standard Chartered Bank.

MCB corporate financing

MCB retail banking

MCB loan products


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MCB rupee travelers cheque

MCB online services

MCB investment banking

MCB agriculture products

Virtual banking

Islamic banking

Privilege banking

Additional services (MCB salary hub & MCB lockers)

Marketing strategy:

MCB is using different kind of strategies to expand their business.

Marketing Mix

Product

MCB has started new products and services which makes them superior than standard chartered bank

Mahana khushhali plan

Capital growth certificate plan

Night-banking services

Price

It is the only element that creates revenue for MCB. Sometimes pricing strategy is also used to set the

price. There are some objectives setting the price and some of them are, maximization of profit,

obtaining market share, rate of return on investment etc.

PlaceMCB is using important channels of distribution

Bank branches more than 1130 in the country

Bank credit card

Promotion

MCB is using four basic promotion tools

Advertising

Personal selling

Publicity

Sales promotion


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RATIO ANALYSIS (SCB):-

INTERPRETATIONS:-

Current Ratio:They have Rs.1.24 of their current assets to pay Rs.1of their current liability in

year 2011, Rs.1.20 in year 2012 and Rs.1.14 in year 2013 which is good for the bank.

Inventory Turnover: The bank is converting its inventory (short-term loans) into sales 1.58times

in 2011, 1.56times in 2012, and 1.37times in 2013 which is relatively good.

Fixed Asset Turnover:The bank is generating Rs.0.97 of sales with every rupee of fixed asset in

year 2011, Rs.0.95 in year 2012 and Rs.0.93 in year 2013.

Debt to Total Asset:84.6% of total assets are financed by total liabilities or debt in 2011, 86% in

both years 2012 and 2013 which is more risky for the bank.

RATIOS 2011 2012 2013

Liquidity Ratio

Current ratio 1.24 1.20 1.14

Activity ratio

Inventory turn over 1.58 1.56 1.37

Fixed asset turn over 0.97 0.95 0.93

Debt ratio

Debt to total asset 84.6% 86% 86%

Time interest earned 0.73times 0.78times 1.33times

Long-term Debt to

equity

0.50 0.58 0.61

Debt to equity 0.58 0.46 0.65

Profitability Ratios

Gross-profit margin 0.26 0.29 0.53

Net-profit margin 0.17 0.18 0.34

Earnings per share 1.41 1.53 2.72

Growth ratio

Sales growth 14% -11.5% -9.5%

Net income 18.5% 13.5% 8.5%


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CONCLUSION:-

Over the last three years, Consumer Banking in Pakistan has transformed itself into a more customer-

focused operation, and grown significantly. According to above finding weve reachedto the conclusion

that:

The banking system, as a whole, remains healthy despite the economy going through a period of

economic difficulty. The banking sector absorbs the build-up of non-performing loans in the system

while maintaining profitability and robust balance sheets. Much of the credit for this must go to the SBP

for the policies it has pursued over the last decade to ensure that banks are adequately capitalized and

adhere to prudent risk management. The objectives are targeted towards customers, improved

management policies, strong policy framework, improved governance structure, strategic investment

initiatives and implementation of cost effective measure across bank. The group structure of the bank

individually worked hard in achieving the milestones under continuous monitoring and supervision of

the senior management and Board.

The bank displayed extraordinary results in both financial and non-financial terms. With the banking

industry recovering at a steady pace since the 2007 crisis, SCB ensures availing all possible positive

opportunities and delivers substantial profits ensuring sound asset growth

Financial year 2010 SCB stood up to the challenges and produced significant increases in major areas of

its business while maintaining higher profitability, stronger asset base with corresponding increase in

equity.

The bank is delivering overall strong performance which is shown by increase in profitability from

previous year PKR 9.1bn to current year PKR 16.1bn. Deposits of bank continued to grow about 11%

since the start of year 2013, continuous increase in banks deposit supported the banks performance.

The band has been registering continuous positive performance for the last few years and because of

that their GPM has increased from 0.26 to 0.53 and NPM from 0.17 to 0.34. The Bank's outstanding

performance resulted in improved efficiency and profitability ratios, stable market share, and attractive

share price at the close of the year 2013

RECOMMENDATIONS:

SCB should contact with their clients regularly for knowing the problems faced by them. This will

help SCB in providing best services to customers. This will result in additional customer base by

getting further references from satisfied clients.

The branch should be decorated in the manner, which would provide maximum

information to the customer without any difficulty.


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The product extension into the retail segment need separate focus and separate

positing in the market.

The marketing team of the branch has until now focused on selling of their most

competitive product, which are there fixed deposits. The rates of interest, which they

provide on fixed deposits, are really competitive and highest in the market. But this

strategy could not be held for a longer period of time as in the long run it would become

liability to the bank to pay such high rate of interest and it would lower the revenues of

the branch.

Try to reduce cost, so that benefits can be passed on to customers. Senior managers at SCB keep

on telling that it is difficult to reduce cost, because of services we provide.

If charges cant be reduced because of costs involved, make the services customized, so that

services are provided to only those customers who are willing to pay the price for services theyare getting and let the other customers enjoy costs benefits without getting services.

As Islamic business of the bank is growing, the bank must endeavor to improve

awareness about Islamic banking through various programs for its customers and

general public. The same awareness program should also be arranged for senior

management of the bank to improve their understanding on Islamic banking.

In order to successful demeanor the performance measurement process, Standard Chartered

Bank should formulate effective internal and external communication mechanism. Performance

measurement system must provide intelligence for decision makers rather than just compiling

data.

It is human nature goes behind reward and incentives whileone try avoid from punishment.

likewise in commercial institution like bank this system be introduced with full force means

active smart, educated skilled ,self-spoken and well versed staff personal ,should be rewarded,

while on the other hand lazy ,lethargic ,rough dealers and ill-mannered must be warned

penalized and punished.

REFERENCES:-

www.sbp.org.pk

www.sc.com

www.sc.com/pk

www.mcb.com.pk
http://www.sbp.org.pk/http://www.sbp.org.pk/http://www.sc.com/http://www.sc.com/http://www.sc.com/pkhttp://www.sc.com/pkhttp://www.mcb.com.pk/http://www.mcb.com.pk/http://www.mcb.com.pk/http://www.sc.com/pkhttp://www.sc.com/http://www.sbp.org.pk/


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