State Bank of India is the biggest nationalized bank in India and it is completely owned by the government with its headquarters in Mumbai. The bank is listed in the top 50 banks of the world and has a revenue of ?33 trillion, 278,000 employees, 420 million customers, and around 24,000 branches and 59,000 ATMs.
The bank around 198 offices in 37 countries; 301 correspondents in 72 countries and has been placed at rank 23 on the Fortune 500 list of companies. It is also one of the oldest banks in India in 1806 and was established right during the age of the British Regime. Here is the SWOT analysis of State Bank of India.
Strengths in the SWOT analysis of State Bank of India :
Strengths are defined as what each business best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Strengths are defined as what each business best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of SBI are:
- A network of the bank: The bank around 198 offices in 37 countries; 301 correspondents in 72 countries, 278,000 employees, 420 million customers, and around 24,000 branches and 59,000 ATMs making it the owner of one of the largest banking networks in the world.
- Goodwill: The bank is one of the oldest in the region and has been having a steady inflow of customers from all income brackets. They have also had good relationships with stakeholders which have created a goodwill amongst customers.
- Special privileges: Being one of the most popular nationalized banks, the bank has a lot of special privileges including a special act for itself.
- Strong backing from the government: SBI is one of the first initiatives in the government in the banking sector and since then has always been its top priority. The bank is also a partner in the e-governance project of the government.
- A wide variety of services: The State Bank of India has a wide variety of services like investment banking, online banking, stockbroking, rural banking and loans amongst others.
- Strong brand: The bank has a very strong image amongst customers, visibility and there have been numerous instances of strong word of mouth advertising about the bank.
Weaknesses in the SWOT analysis of State Bank of India :
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of State Bank of India are:
- Limited market share growth: Earlier when banking was not privatized SBI had undoubted leadership. But with the privatization of banking, there has been a surge in the competition which has resulted in a drop in market share.
- Bad debts: State Bank of India has been facing a problem of being unable to resolve bad debts which have resulted from the non-repayment of loans.
- Huge size: After the merger with five of its associate banks, SBI has become the largest banker in India and the network in huge with branches even in remote locations. This huge size can create serious challenges in management.
- Loan issues: There have been issues in loan repayment, bad loan, non-performing assets and loan restructuring especially in the case of the associate banks.
- Customer service: Due to many salary accounts and government accounts with SBI, the branches are overpopulated creating too much dissatisfaction and frustration for users. Thur customer service is known to be bad from SBI.
Opportunities in the SWOT analysis of State Bank of India :
Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:
- Restructuring: The banking industry in India was restructured by the government helping the sector to cope up with the challenges of the new financial environment.
- Growing income brackets: There is a steady growth of per capita income in India which in turn indicates a growing economy. These signals are positive for the growth of the banking business.
- Increase in borrowing capacity: The society has undergone a change in the structure of double income households with high disposable income. This has created a resultant change which is an increase in borrowing capacity of the customer.
- Increased use of technology: The urban Indian is very comfortable with all latest technologies such as mobile, internet and computers. This shows a lot of promise for services such as online banking. This is also backed by a growth in internet shopping behavior which makes credit cards a must.
- Digitisation: Banks have become more relevant with digitization and demonetization and this will see an increase in the number of bank accounts as well as for credit card usage.
Threats in the SWOT analysis of State Bank of India :
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:
- Bad Loans and Non-performing assets: India has a history of bad loans and amounts to a total of Rs 10 lakh crores. Non-performing assets in India are estimated at 10.2% by March 2018, from 9.6% in March 2017 in comparison to the statistics last year September 2016, gross NPAs were at 9.2%.
- Cyber threats: There has been a lot of issues lately on information theft and security. These cyber threats from a headache for the banks which can affect the image of the bank if not managed well.