CHAPTER FIVE
(Comparative Analysis)
BRAC Bank limited is one of the market leaders in Credit Card business. It started its credit card business in 2006 and within a very short period of time, it became the market leaders in some specific areas of Credit Card. In this section, we will highlight some of the distinguishing features of BBL credit cards that differentiated it from other banks. In the later part of this section, we will show some statistics that will help to visualize the BBL credit card position in the market.
There are many other players of credit card in Bangladesh Banking industry. Some of the major players in credit card are Standard Chartered Bank (SCB), Eastern Bank Limited (EBL), Dutch-Bangla Bank Limited (DBBL), Bank
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Number of Credit Cards:
The first comparison criteria used in this analysis is the number card issued so far by the major competitors. Here, SCB stands at first with around 1.5 lac credit cards so far. The number is 1.0 lac, 1.3 lac & 1.0 lac for City bank, Eastern Bank and BRAC Bank respectively.
02. Number of
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e. productivity of per staff. This analysis will help to identify the strength of the staffs of the respective banks. Staff cost is one of the major concerns of the banks. Hence, this staff efficiency analysis will help bank to look at the efficiency level of their staffs. The below table shows the number of staffs of each bank in the card operations area. The table also shows the number of transactions, number of cards individual bank is dealing, number of product features, Managers vs officers’ ratio and ratio of manual job vs automated jobs.
Based on the information cited in the below table, we see a major differences in efficiency of the staffs of each bank. Here, per staff productivity of BBL Staff is around 2.00 lac per year. Rest of the banks is almost one fourth of BBL staffs.
ITEMS BBL SCB EBL CITY
KPI (Yearly) 5995507 3456142 1456976 2314629
No of Resources 30 65 60 47
Productivity (Per Staff) 199850 53171 24283 49247
Manager Vs Officer Ratio 1:06 1:08 1:07
Prior to Fuller’s transfer, management at the Carson’s location was poorly run using the classical approach. While this approach can be successful, management has to find a good middle ground between caring for the company and caring about their employees. A traditional classical approach recognizes that there are five important factors to running a successful business (Miller, 19). According to text, these factors are planning, organizing, command, coordination and control (Miller, 19-20). These factors can be seen when you look at Third Bank as a whole. In the study, the CEO saw the issues in his company and put a plan together to improve. He had meetings with management, like fuller, to organize a solution. He then commanded all locations
Santander is retail banking financial which was founded in 1857. It is centered in Santander Spain as the name suggests. It has its operations carried in Euro zone widely by its market share and it is known as one of the largest banks in the world for market capitalization. The company has expanded through various acquisitions in 2000. There is a drastic change in the formation of the rules and regulations by the company from acquisitions and merger. Banco Santander had a merger with Banco Central and Banco Hispanoamericano in 1999 thus, considering both the entities equally it is known as Banco Santander Central Hispanoamericano or BSCH. This merger was designed equally so as both the pre-existing firms CEO had took over the control equally
Banc One uses the following investment to manage interest rate exposure. In the early 1980s, Esty, Tufano and Headley (1998) mentioned that it managed its exposure to interest rate risk by adding balancing assets to its investment portfolio until it felt it had enough fixed-rate investments to offset its fixed-rate liabilities. In 1983, Banc One began to use interest rate swaps to manage interest rate exposure. Swaps will be discussed in the later paragraphs. In 1986, Mortgage-Backed Securities (MBSs) was introduced.
In the past, people buy big-ticket items through a credit card and they pay back in a few months so that they can make expensive goods more affordable. Now, people are using a credit card to enhance their life quality and buy things recklessly. It is a very dangerous action in such an unstable environment. Credit default is a big issue all of the time. Credit card holders are not only suffering the higher price but also compounding it by packing interest expenses into the costs of everyday purchases. Therefore, American Express announced that there is no annual fee SimplyCash Plus Business Credit Card, which has the huge impact on small businesses’ growth. With the development of small businesses, American Express hopes the new power can enhance the U.S. economy recovery, so that more consumers have faith in credit
BARS is Deutsche Banks spreadsheeting tool for world wide capture and sophisticated analysis of customers financial statements. The application offers to Deutsche Banks credit officers access to 200.000 customers and 1.6 million financial statements stored in a central database. In order to facilitate data capture and to further streamline the credit process the application will be equipped with an XBRL-import interface.
The banking industry has come under increasing pessimism of late because of rising short and long-term interest rates. The banking industry's market capitalization made a substantial decline. Most investors are concerned with whether the industry can sustain continued profitability as a result of these factors.
The costs associated with the online banking operation were out weighted by the benefits provide by the program. Resource had to be taking from other areas of the bank in order to start the program, which included creating the website, make it secure and promote it to customers. However, many benefits also came with the creation of this program. The first would be that it changes the patterns in customer uses of different banking channels. In active users of online banking there were drops in the use of some on the other banking channels. Another benefit is the retention that was created by online banking. This happened because once a customer entered all their information they saw it as a buried to switch bank and have to do it all over again. Therefore, customers would stay more and longer with their current bank.
The control environment is a very important part of businesses because it is the foundation of the internal controls. It determines whether the ethical values, procedures and rules that provide reasonable assurance control objectives are met. If a business has a poor control environment, their business will not last very long, like Barings Bank.
Productivity is key in any organizational business performance. Higher productivity generally creates a higher chance for a business to perform. Lower employee productivity affects the business performance.
Visa and MasterCard are non-stock, not for profit membership corporations owned by thousands of diverse financial institutions (i.e.- banks, credit unions etc.). The Visa association was formed by a group of American banks in the late 1960’s to assist its members in issuing general-purpose payment cards and signing merchants to accept those cards (Allen, 2000, 2). Visa and MasterCard are considered to be an “open” or joint venture relationship with each other and their association members. In essence, this means any financial institution may join the Visa and MasterCard associations assuming they can meet certain capital adequacy requirements, and comply with certain association rules. In return, Visa and MasterCard provide essential functions to the member banks. They license their members to issue Visa and MasterCard branded credit and debit cards, sign members to accept those cards, market the cards to ensure brand recognition, develop new card products and services, and provide an infrastructure of communications, processing, authorization, and settlement functions necessary for the system to operate. Together Visa and MasterCard account for almost 80% of the overall market share in the credit card industry.
In this case study it was stated that there were a problem happen in the outsourcing for the Royal Bank of Scotland. What happen was there were an error that happen during the routine software upgrade that cause million of that bank customer cant access to their account. The error happen when one junior technician in India was accidently wiped all the information during the routine software upgrade. The member of staff that was working under the program for the Royal Bank of Scotland, NatWest and Ulster Bank and it was based in Hyderabad, India.
All employees are qualified and experience holder in their work and hence they perform very well.
It also reveals the problems, frustrations, anxieties that employees pass through at their work place where certain incentives are de-emphasized. It will equally assist management to engage in staff welfare development that will improve productivity. Job performance of employees is determined by the ability of individual employee to perform well on his job as well as the level of motivation offered by the work environment and it is of fundamentally significant in productivity.
Efficiency in your operational processes is key to keep operational costs at a minimum while creating more productivity. Efficiency and productivity lead to more profits, which give you the revenue to do the things you need to do to keep the business running. Extra money gives businesses the much needed income to invest in their human capital, provide a ROI for their investors and give back through philanthropic efforts in the
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.