Soneri Bank: SWOT analysis Essay
SWOT ANALYSIS of Soneri Bank Limited
Profile of Sbl
Soneri Bank Limited established in 1992 and listed on all stock exchanges in the country, has gradually extended its network to 233 (at end Jun-13) branches, Feerasta family, owners of the Ruplali group, with main interests in synthetic textile industry, holds the controlling stake (~57%) in the bank through three trusts of the family. Feerasta family has nominated two directors on board while Amin A. Feerasta, also a family member holds key position in bank’s management. The eight-member BoD of SBL, with diversified experience, is a key source of guidance for the management. SBL, during recent years implemented a bank-vide organizational restructuring to strengthen itself against ensuring challenges. Mr. Aftab Manzoor, a season banker, is the chief executive officer. A diverse team of SBL’s veterans and young individuals assist CEO. There are following strength weakness opportunity and threats for SBL.
Growth in system share, increasing outreach & improving profitability. The Pakistan Credit rating Agency Limited (PACRA) has maintained banks credit rating. SBL has been awarded an “AA-” for long term and “A1+” for the short term and “A+” for the Term Finance. Certificates reflecting bank’s well maintained risk profile with preserved sound asset quality.
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Excellent Alternate Delivery Channel (ADC) Services e.g. internet banking, mobile banking, VISA debit card etc.
As per bank policy, advertising and publicity is not extensively emphasized. Through advertisement customers could be kept abreast with the product and services. The main focus of SBL is major cities of Pakistan. It is strongly needed to extend its network and people should be educated about the functioning of bank. Poor employee development and promotion.
Defensive approach in lending.
No branches of Soneri bank are in any other country. So the bank has to incur additional cost for correspondent banking. Core Banking Software and Bank Operations are not up to the mark i.e. branch banking oriented rather than branchless banking.
The life cycle of an organization is comprised of threats as well as opportunities. If we say, today the rates of challenges are too high but simultaneously the rate of opportunity is also too high. It is obligatory to try to make progress with consistency as well as to adapt changes with the need of time, in order to cope up with both conditions. In the prevailing scenario, SBL should penetrate further and capture various corporate customer as well as retail customer by expanding their network. In addition to the excellent routine banking, it has earned a good name by offering special products like Soneri car finance, Ghar finance and personal finance. So the penetration of these products could enhance the market share. SBL has launched another division know as Islamic Banking. This new aspect will also attract a large number of people, who don’t want to deal with interest bearing bank. If SBL keep focusing on advertisement it would be good for organization, because promotions make people know about the products of SBL. Management should also open new branches is rural areas to capture market share. SBL can enjoy handsome return its funding base by investing in capital markets in the foreign countries.
In our country, the rate of inflation is increasing along with unemployment. So due to increase in price of the products, the saving of the people is decreasing with passage of time. So it is threat for banking sector. In future the deposits of the bank will decreases. The number of banks in Pakistan increasing with passage of time. Foreign bank like to open their branches in Pakistan. So it would be threat for SBL. SBL has also threat with different bank who are offering the same product like Home finance
So management may face problem.
Uncertainty in political and economical environment.
Mergers and Acquisitions are other threat to bank.
Decreasing interest/profit rate on saving products will make customers to explore other ways for higher return on savings.
Conclusion of SWOT Analysis
Since SBL has decent strengths and opportunities in the market, its market share is increasing and it is expanding its branches rapidly. So I concluded that SBL is adopting and implementing on Growth Strategy.