The Banking Industry in the UK - Term Paper Example

Table of Contents Introduction 2 Overview of the Industry 2 Current Status in the Company 3 Role of the Company in the Industry 3 Macroeconomic Indicators & Trends of Development 4 Recommendations 7 Conclusion 7 References 8 Introduction The manner in which different companies have performed in the different industry highlights the different contribution that the different companies have made. This report looks into the banking industry and focuses on Lloyds TSB Bank. It looks to present the manner Lloyds TSB Bank has performed and the different indicators which help the bank to deliver quality performance. This also highlights the position of Lloyds TSB Bank in the industry and helps to understand the manner in which the future potential for the bank can be looked at and the different indicators which will determine the success of the bank in the future. Overview of the Industry The UK banking sector is the third largest after US and Japan and is considered one of the most valuable banking sectors in relation to efficiency, dynamism and return on capital. The banking industry in UK employs over a million people and around 3.5% of the working workforce. The overall asset base has grown over €10526 billion, which consist both of deposits and lending that the bank performs. The fact that the financial sector productivity is multiplying has contributed immensely towards the GDP and enabled the national output of the country to grow. UK further is a leader in investment and private banking and accounts for one fifth of the global international lending. The manner in which the sector and the industry have witnessed growth has multiplied the number of players performing in the market and has intensified the level of competition that exists between the players. Deregulation of the sector has helped in developing reforms which are supportive of growth and has thereby enabled the different players to perform to their fullest possible extent. Current Status in the Company Lloyds TSB Bank is a bank based in UK which started operations in the year 1995 and looks towards providing retail banking services. Lloyds TSB Bank has grown their business and has ensured the presence of different branches and looks towards providing 24 hours services in the form on online and telephone services. The bank looks towards offering a wide range of services and functions as a wholly owned subsidiary where they look to provide different features and services to the customers. Lloyds TSB Bank has grown over the years and look to hire more 46,000 employees and is an active bank performing in the retail banking business. The bank has been able to contribute positively towards the growth of the economy and have contributed in the financial business which has thereby ensured better growth for the business (Lloyds TSB Bank. 2012). Role of the Company in the Industry Lloyds TSB Bank looks to perform as a retail banking industry in the financial services sector which looks towards providing different services like a normal bank does. Lloyds TSB Bank looks to provide both lending and deposit functions through which they are able to ensure that customers are provided with a range of services based on which they will be able to ensure that customer satisfaction increases and has helped the financial sector to ensure proper liquidity within the economy. Macroeconomic Indicators & Trends of Development Lloyds TSB Bank has look towards promoting transparency by creating awareness among the stakeholders and the customers along with the employees who has helped to ensure that better corporate responsibility can be achieved and the business is able to meet the demand and supply that the market presents. The demand here represents the requirements of banks and different services by the customer and the society and the supply here represents the different banks which are able to perform in the different sector. This has helped to find out the demand and supply as follows The above graph shows the equilibrium which has been achieved as the market demand for banks and the customer matches at a point. This is true in case of Lloyds TSB Bank which highlights that the market is in equilibrium and shows that the demand matches supply. This has thereby enabled to identify the manner in which the demand and supply helps to identify the point at which equilibrium is achieved. This can be further seen by the fact that the manner in which the market is working has enabled to ensure consumer surplus which is as (Ashton, 2001) The above graph shows that the customers are able to receive extra for the services that the bank provides. This is based on the fact that the consumers get more than they actually pay the banks in the form of interest and charges. The fact that banks looks to safeguard the money of the consumers and ensure that the loss due to theft or other reasons are controlled has ensured that the overall performance gets shaped and has enabled the business to ensure that consumer surplus is generated for the consumers who are able to get something extra. There are many factors and parameters based on which a consumer feels that surplus is generated and is as follows (Bhattacharya and Sankar, 2004) The above chart shows that the consumer surplus which Lloyds TSB Bank was able to visualize was due to different factors which enabled the consumer to ensure better transparency and satisfaction due to the different services that were provided to the customers. The other factor which also contributed towards consumer surplus was the assistance in SMEs, and rural business which enabled the customer to get something more. This thereby highlights the different factors contribute positively towards the development of the banking and the financial sector which will thereby enable the business to look towards finding out the different opportunities based on which they will be able to ensure better growth. With the economy slowly reviving and the economic conditions improving it provides an evaluation of the different economic factors which will contribute positively towards the growth of the banking sector. Recommendations Lloyds TSB Bank should look towards finding out the different economic factors and indicators based on which their performance can be enhanced. This will require that Lloyds TSB Bank focuses on the different aspects which will help to find out the different strategies and factors through which highlighting on the different factors will be able to increase consumer surplus. This will thereby require that Lloyds TSB Bank identify the different factors and looks towards dealing with those factors and multiplying the satisfaction level of the customers so that their satisfaction level increased and consumer surplus increases. Conclusion The report thereby looks into the financial sector and looks towards finding out the manner in which Lloyds TSB Bank which performs in the baking sector will be able to ensure that they are able to grow. This will also require that the different factors which will help to find out the satisfaction level of the customers is identified and will thereby require proper mechanism through which overall effectiveness is achieved. This will thereby ensure that Lloyds TSB Bank will be able to grow and use the economic factors which will thereby ensure that the banks perform well. References Ashton, K. 2001. A Test of Perfect Competition in the UK Retail-banking Deposit Market. The Service Industries Journal, 21 (4), 119-132 Bhattacharya, C. and Sankar, S. 2004. Doing Better at Doing Good: When, Why, and How Consumers Respond to Corporate Social Initiatives. California Management Review, 47 (1), 9-25 Lloyds TSB Bank. 2012. Lloyds TSB Bank. 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