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Global Banking Operations and Strategy - Essay Example

Summary

The Royal Bank of Scotland, which initially stepped up with a marginal success later failed in the financial arena due to couple of its systematic weaknesses. The organization contained weaknesses inside of its business culture and system. Below are some of the weaknesses…

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Subject: Finance & Accounting
Type: Essay
Level: Undergraduate
Pages: 1 (250 words)
Downloads: 2
Author: anabel99

Extract of sample "Global Banking Operations and Strategy"

RBS Bank RBS Bank Weaknesses The Royal Bank of Scotland, which initially stepped up with a marginal success later failed in the financial arena due to couple of its systematic weaknesses. The organization contained weaknesses inside of its business culture and system. Below are some of the weaknesses highlighted:The first weakness of the bank was the short-term risky planning of investment. RBS always invested in the smaller areas, in the smaller financial ponds, which were more uncertain and had a risk to catch up.

The uncertainty of the smaller segments caught the bank up on more market pressure and competition. The bank lost its resilience and resistance capabilities (The Telegraph, 2014). Credit was one of the failed segments of RBS. RBS consistently relied on credit trading, which due to high economic crises build up, brought more damage to RBS’s existence. The bank needed to sideline the credit segment, which had lesser opportunity and more market risk (Treanor & Bowers, 2011). The weakness lied in RBS operations, which consistently failed to manage the net returns of the bank.

The leakage of cash due to poor banking operations, RBS was unable to stabilize its cash growth (Risk Business International, 2011). RBS always had low capitals in its financial cupboard. The bank due to small capital resource was never able to put hand on major market segments. This made bank rely on small segments such as credit trading or bonds investment, which had more risk and lesser income return (BBC News, 2013). The shrinkage of assets is another major weakness of RBS. From 2009 to 2013, the bank consistently reduced its assets, which affected its market image, share and equity altogether (RTT News, 2014).

List of ReferencesBBC News, 2013. RBS must do better after payment fault, says boss. [Online] Viewed at: [Accessed 17 March 2014].Risk Business International, 2011. RBS management to blame. Research Report. London: RBI Ltd.RTT News, 2014. European Markets Decline, RBS Drops On Results. [Online] Viewed at: [Accessed 17 March 2014].The Telegraph, 2014. RBS report: the main points. [Online] Viewed at: [Accessed 17 March 2014].Treanor, J. & Bowers, S., 2011. RBS failure caused by multiple poor decisions.

[Online] Viewed at: [Accessed 17 March 2014].

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