SWOT Analysis of Standard Chartered Bank

Standard Chartered is a British multinational banking and financial services company with
headquarter in London, England. It has a global network and operates in more than 70 countries
with more than 86000 employees. The bank is the main sponsor of the Liverpool football club since
2010 and is proud to have its name featured on the famous red shirts. It is listed on the London and
Hong Kong Stock Exchanges as well as National and Bombay stock exchanges in India.

The bank is India’s largest international bank with 100 branches in 43 cities and the bank has been
operating here since 1858. The key client’s segments include institutional banking, private &
commercial banking and retail banking as well. The bank also has the number of subsidiaries
operating here in India like Standard Chartered Securities (India) Ltd; Standard Chartered Private
Equity Advisory (India) Private Limited etc.

Standard Chartered recently refreshed its brand identity after 8 years from “Here for good” and now
it poses a tougher challenge “Good enough will never change the world” and plans to help tackle
problems and create a positive global impact.

Table of Contents

Strengths in the SWOT Analysis of Standard Chartered Bank

Strong brand image and global footprint

Strong brand presence, high-quality service, and sound financial capability have helped Standard
Chartered create a reputable brand image. It sponsors one of the most cherished football clubs in
the world and also stands in matters it truly believes in, for instance, it has stopped financing coal-
fired power plants, it has a global program called Goal that helps empower girls and women through
sport and life-skills training thus nurturing sustainable growth and development.

Standard Chartered is the only international brand that is present in all the 10 ASEAN markets and
takes pride in its diversity of people, culture and the global network which has helped develop the
unique understanding of different regions and the varying need across the markets.

Focus on emerging markets

The bank has worked rapidly in developing the African, Asian and Middle Eastern local markets to
find opportunities for growth and help businesses achieve their financial aspirations. It offers
innovative financial products and differentiated service offering understanding the demands of the
diversified markets.
The bank’s 80% profit comes from these emerging markets. The bank has the large share in the non-
resident Indian market, which it calls “Global Indian”, and this business was enhanced by the
purchase of American Express purchase in 2008.

Focus on sustainability

The sustainability philosophy of Standard Chartered is based on the following three valued
behaviours’ which are “Never Settle”, “Do the right thing” and “Better together”. It supports UN’s
Sustainable Development Goals (‘SDGs’) and creates new opportunities through this.

It balances environmental, social and economic needs of any country by supporting finances for
energy needs of the markets while also considering the low-carbon economy, ensures infrastructure
development that doesn’t harm communities, helps clients create quality jobs which support human
rights etc.

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Weaknesses in the SWOT Analysis of Standard Chartered Bank

High Dependence of South East Asian Economies

Standard Chartered is tremendously dependent on Asia for earnings, creating two-thirds of its
revenue and most of the profit.

The Southeast and South Asia contributed to almost 27% of the revenue but only 14% of profit
mostly because of high losses on bad loans. Vietnam is right now suffering from air pollution, the
capital had just 38 days of fresh air in 2017.

With the changing governance reforms in the Southeast Asian countries bank will have to integrate
the compliances with strategic initiatives. The new breed of digital-only banks are hitting the market,
there is a lot of push for digitization and banks like Singapore’s DBS Group is already capturing the
market so the competition is immense.

Developed nation’s low productivity dragging down profits

In the US, the weak growth of productivity is keeping the rates of interest down and the Federal
Reserve Board cautious. Countries like the UK, Germany, and Spain are also not doing well due to
low investment and general growth slow down. The major problems faced by the developed
economies are weak demands, increased taxes, lack of reforms, oil price boom etc. and has risks of
overheating and inflation. With no new investments and growth opportunities, the profit from these
developed economies is really low.
Opportunities in the SWOT Analysis of Standard Chartered Bank

The potential for a boost from technology

The rapid growth of technologies such as AI, robotics, mobile, cloud IOT could bring the new wave of
technology-driven productivity growth in any economy. Philippines and India have benefitted
considerably from enhancing service exports with the help of technology. For any emerging
economy technology intervention can help the economy grow by creating new opportunities and a
scenario like this is good for Standard Chartered with growing demands for investment and financial
services.

With the implementation of technology like big data analytics, it will be easier to predict the success
and failure rates of customers in terms of mutual funds, loans etc. ensuring the risks taken is
minimal. Online banking is getting more sophisticated with Chabot’s to keep customers engaged and
solve their problems. Standard Chartered can find good opportunities for enhancing customer
service through technology-driven solutions.

Growth potential of emerging markets

The high productive economies like Vietnam, China, Taiwan, and India enjoy stronger credit, stock &
property market also rising real exchange rate. Standard Chartered is well positioned to benefit from
the trade flows between Africa, Asia, and the Middle East.

The Asian outlooks stable despite rising US-China trade tensions it has stronger fiscal and current
account balances and higher Forex Reserves compared to other Emerging Markets. India has
supportive demographics and economic opportunity, with Standard Chartered, is looking for
opportunities to roll out digital capabilities in retail, build commercial banking franchise etc.

The demands of financial services from these economies are ideal for the bank to gain profit from
these emerging markets.

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Threats in the SWOT Analysis of Standard Chartered Bank

The Changing macroeconomic conditions

According to global banking outlook survey, most bankers anticipate that the costs will continue to
increase over the next three years. The moderate savings are reallocated to cybersecurity spending
and growth initiatives. It is expected that the cost increase is 2.1% over the next three years.
The trade tensions and the USD strength is also affecting the business sentiments in the emerging
markets, Japan and Europe. In the Q4 of 2018, more volatility is expected by developments in global
trade, growth, and differences in interest rates. The Gold prices have also remained under pressure
under the escalating trade war. The metal’s attractiveness has decreased with weaker Emerging
Market’s Forex, in this unstable market scenario, maintaining stable asset quality should be the
prime focus of Standard Chartered Bank.

Geopolitical events

The US imposed another round of tariff worth $200 billion worth of Chinese export. China has
declined US’s offer to discuss trade offers. The trade tensions are rising. The oil prices are becoming
more uncertain as the demand for oil is increasing. The strength of GBP(Great Britain Pound) has
been driven by expectations that a “no-deal Brexit” will be prevented by compromise on both sides.
In a situation like this investment is a huge risk. In this political unrest, there is no stable
environment for the bank to carry out its operations in these strategic markets.

Fierce Competition in the market

The banks are facing heightened competition from new market entrants including digital banks and
other institutions which offers high-tech and high-touch branch services. Such challenges have
rapidly evolved due to changing customer behaviors and expectations which is forcing banks to
invest in customer technology to prevent customer leakages. HSBC bank which is one of the main
competitors of Standard Chartered is planning to make $15-$17 billion investment as it moves from
cost-cutting to growth. Standard Chartered will have to make strategic decisions and investments to
say ahead of the competition.