Performance Evaluation of Barclays Bank Plc - Assignment Example

BARCLAYS BANK PLC By Name Course Instructor Institution City/State Date Introduction Performance evaluation of any company involves the assessment of the financial and strategic planning. The evaluation process consists of analysing the various aspects or strategic aspects of a company that enhances the growth of the company in the market. In analysing the performance of any company, it is important to determine the important factors that contribute to the success of the company in relation to other competitors. This is because company success in the industry is determined by both internal and external business environment. The success of any business organization is dependent on the structure of the management and strategies that are adopted by the company. The internal business environment consists of the members of staffs including the board 0of directors and employees. These are crucial in the development and implementation of strategies that are aimed at achieving the goals of the company (Padmalatha, 2011, p. 593). The external business environments that may influence the success of a company include the shareholder and the communities. It also includes the suppliers and customers. The aim of this report is to analyse the performance of Barclays bank using the PESTLES analysis, and SWOT analysis. Barclays bank is one of the banks that are ranked among the 100 leading companies in the United Kingdom. In addition, the bank is also ranked as the biggest financial provider that has assets worth $3.7 trillion (Barclays Bank Plc, 2013). The bank is ranked second in the United Kingdom depending on the size of its assets (Barclays Bank Plc, 2013). The strategy of Barclays bank is to ensure company growth in the appropriate times while developing its business versatility. It also aims at increasing the brand name in the market as well as increasing the presence of the bank. In addition, the bank aims at developing various market segments that have the capability to grow at a faster rate. The Barclays Bank Strategy The Barclays bank strategy is based on the principle to earn more revenue. The revenue of the company is also invested in other business, which allows the company to increase its capital. This enables the company to grow at a fast rate. In fulfilling the principles that the company has ensured that, it uses various strategies, which are a priority to the success of the company (Barclays Bank Plc, 2013). The Barclays group aims to become the best bank in the United Kingdom in providing financial services to consumers. The bank is in the process to ensure that it grows so that it can be able to accelerate the growth of other global firms. To expand its financial service beyond the United Kingdom and develop banking services in other countries. The bank also plans to become the leading bank in terms of increased operational superiority. The bank has also identified five principles, which are crucial in the way the banking business works. The bank aims at achieving victory and success in the banking sector through collective responsibilities in the various branches and investments. This implies that the bank will ensure that various branches in the United Kingdom and outside the United Kingdom are performing well. This will ensure a general performance of the Barclays group (Barclays Bank Plc, 2013). The company hires the best people including the board of directors that are able to utilize their potential sin achieving best results. This is achievable if the company understands the client's needs and be able to attend to their needs. The Barclays strategies also believe in employing best management practices, which will ensure the adoption of current technologies in implementing decisions that ensure the growth of the bank. Finally, the bank believes in trust that ensures the integrity of the highest order in keeping the trust of the clients and external factors. Performance Indicators The Barclays bank has recognized various key indicators in evaluating its performance in the banking industry. These indicators are used by the bank to monitor the performance of the bank against the strategic planning. The performance indicators are used to evaluate the performance of the company in relation to the executive priorities that are identified. The key performance used to evaluate the business is the capital, the returns, income growth and citizenship (Barclays Bank Plc, 2013). Capital This is used to measure the amount of capital in terms of core Tier 1 ratio. This determines the ability to improve the company success as well as the ability of the firm to grow. The company recorded an improvement in the core tier 1 ratio in the last three years. In 2011, the company Core Tier 1 ratio was at 11%. This was an improvement from 2010, which was at 10.8% (Barclays Bank Plc, 2011). This implies that the company had reduced the risks of weighted assets. This has the implication of increase the share price and dividend of the shareholder. The company does not need to ask for more capital from the shareholder. Hence, the company is a good position to finance its position. This ratio is also important in determining the remunerations of the employees and the board of director. In addition, the company is able to pay its debts hence has room to expand. This capital is also attributed to the various investments of the company. The investments have enabled the company to achieve a strong liquidity pool of 152bilion pounds (Barclays Bank Plc, 2012). Returns The company has managed to focus on its strength in achieving high returns. The company has recorded an increase of its return on equity in the year 2009 to 2010. However, in 2011 the company return on equity reduced due to regulatory constraints. However, this does not mean that the company is not performing well (Barclays Bank Plc, 2011). The company has a strong strategy and potential to increase the returns. The implications on reducing returns are that dividends will reduce. This may have a negative implication for investors who may see the company's potential to grow to be minimal (Barclays Bank Plc, 2012). Income Growth The total income is the amount of money the company is able to generate from its operations. The total income of the company reduced by 3% in 20111. This means that the company was not able to withstand the challenges of the macro environment. This implies that the company needs to remain focused on the improvement of the total income (Barclays Bank Plc, 2012). Business Environment The evaluation of the business environment is important in determining the ability of the company to grow. In this paper, the PESTLE analysis is used to evaluate the business environment. This analyses the political, environmental, social, technological and legal analysis. PESTLE Analysis Political Analysis Barclays has ensured an expanded sustainability agenda. The sustainability agenda focus on increasing the focus on the nature of Barclay’s business. It also focuses on increasing the shareholders' interests in a competitive market. This has enabled the increment in awareness on the global challenges such a poverty and scarcity of resources. In this case, there were various responses that emerged from the government and other business in the industry and other industries. In addition, the responses also came fro other non-profit organizations that enable the sustainability of Barclay bank (The Write pass Journal, 2012). Economic Analysis The Barclays bank has embraced an open and transparent sustainability approach, which enables the company to approach issues related to the initiation and development of new research. The transparent sustainability program also encourages dialogue between the government and the company about their priorities that increase the chances of the company to achieve high-income rates. The use of various corporate responsibilities in the company ensures that the company adopts the relevant strategies, which place the company in a better economic position. This means that the company will be able to operate in a manner that focuses on success and growth of the company (The Write pass Journal, 2012). Social Analysis This is through increasing the value of the company and its shareholders. In this case, the Barclays bank gives much attention to customer satisfaction and maintains a good understanding. This ensures that the company is able to understand the needs of the customer in order to design better products. This has enabled the company to promote only products that are appealing to customers. This implies that the business increases sales through providing customer-satisfying products (Larson et al. 2011, p. 43). Technological Analysis The Barclays bank group is focusing on improving the use of technology to boost its strength. This is to give customers more convenience in their services. In this way, the company introduces different technologies in the company. These technologies are used to ensure the satisfaction of the customers. For example, the introduction of online banking has increased sales of the company. This is because customers are able to make transactions while at home. These reducers the expenditure on services paid to attend the customers. The online banking at Barclays bank is different from other banks such that customers are offered with a variety of facilities at their convenience. In addition, the bank has introduced a variety of automated teller machine cards (ATMs) and credit cards that offer the customer many facilities. These cards enable customers to withdraw money and deposit money using the ATM in a matter of minutes (The Write pass Journal, 2012). Legal Factor The company ensures that it abides and complies with all regulations and guidelines. These include compliance with the code of conduct and other legal affairs. Barclays Bank SWOT Analysis Strengths The company enjoys a wider global presence that enables it to extend its risk that facilitates the company to poses the economy at the expense of various growth factors. The brand name of the company is a historical name that enables the company to enjoy a global presence. For example, the company is the main sponsor of the Barclays premier league a factor that publicises the company (BBC News Business, 2012). The company opens new branches in various countries that allow it to focus on customer requirements (Business Teacher, 2013). Weaknesses The incorporation of its services the Zimbabwean African national union (ZANU) has increased the worry among investors on the ethical standards of the company. More investors have questioned the ethic of Barclays in relation to its involvement in political matters in Zimbabwe. In addition, the company gives awards to its directors, which seem undesirable since they attract comments from various individuals. This reflected the lack of accepting government finance is because it would finish its autonomy in the various director awards. The Barclays bank’s plans to extend its businesses to Asia are faced with challenges such as ABN Amro in 2006 (Dammann, 2008, p. 56). Opportunities There are still possibilities of the bank to expand in Asia since Asia is still growing. The previous court ruling concerning Barclays bank charges enables the bank to enforce such changes, hence increasing its chances of expansion (Business Teacher, 2013). Threats The fact that Barclays bank offers a variety of services may have a negative impression to since customers. There are customers who may decide to go to banks hat are more specialized in order to get much attention. The closing of various branches has reduced the confidence of many investors (Business Teacher, 2013). Conclusion Performance evaluation of any company involves the assessment of the financial and strategic planning. The evaluation process consists of analysing the various aspects or strategic aspects of a company that enhances the growth of the company in the market. In analysing the performance of any company, it is important to determine the important factors that contribute to the success of the company in relation to other competitors. The key determinant parameters in the evaluation of the company are the internal and external influences on the financial profitability of the company. The key determinant in evaluating the Barclays bank performance is the returns, capital, and citizenship. This helps in understanding the financial position of the company. The total income from the company reflects the degree at which the company is making progress in the market. The company has employed a board of directors who have strong management skills that implement strategies that are evaluated to ensure the success of the company. The company has employed the use of strategic planning that evaluates the opportunities that are at the disposal of the company. The PESTLE and SWOT analysis allow investors to gauge the performance of the company and determine the available opportunities. This will be critical in measuring the ability of the company to expand in the future. References Barclays Bank Plc, 2013. (Online). Available at: Accessed on 09-04-2013. Barclays Bank Plc 2012. Barclays Bank Plc Annual Report 2012. (Online). Available at: Accessed on 09-04-2013. Barclays Bank Plc, 2011. Barclays Bank Plc Annual Report 2011. (Online). Available at Accessed on 09-04-2013. BBC News Business, 2012. Premier League and Barclays sign new three-year deal. BBC News. (Online). Available at: Accessed on 09-04-2013. Business Teacher, 2013. Barclays Bank SWOT Analysis. (Online). Available at: Accessed on 09-04-2013. Dammann, N. 2008. The Bidder Competition for ABN AMRO: A Strategic Analysis and Implications for the Banking Sector. Munich: GRIN Verlag Larson, J., Schnyder, G., Westerhuis, G., Wilson, J. 2011. Strategic responses to global challenges: The case of European banking, 1973-2000. Business History, 53(1): p40-62. Padmalatha, S. 2011. Management of Banking and Financial Services. Delhi: Pearson Education India. The Write pass Journal, 2012. Strategic Analysis (SWOT, Porter, PESTEL) of Barclays Group PLC. (Online). Available at: < http://writepass.co.uk/journal/2012/11/barclays-group-plc/> Accessed on 09-04-2013. Read More