SWOT analysis of Barclays
This is a detailed SWOT analysis of Barclays. It aims to analyse the strengths and the weaknesses of Barclays. It also aims to explore the opportunities and the threats facing the bank. Barclays plc is a transatlantic consumer and wholesale bank with global reach. Its origins date back to 1690 as a business helping monarchs and merchants exploring and funding ventures around the world.
Strengths of Barclays
Barclays is one of the most famous financial brands in the world. It is well diversified by geography, by product, and by currency between its consumer and wholesale businesses. It offers services in retail banking, corporate and investment banking, credit cards and wealth management. It has a fantastic position in the UK retail and business banking. As of January 2019, it serves 23 million customers and a million small businesses in the UK. It has approximately 48 million customers and clients worldwide (Barclays, 2018).
Both the UK and the US are considered two home markets of Barclays. In fact, the USA accounted for 40 percent of the bank’s profits in 2017. The bank has a primary listing on the London Stock Exchange and a secondary listing on the New York Stock Exchange. It is also a constituent of the FTSE 100 Index.
Barclays has been one of the pioneers of innovation and leadership in the banking sector worldwide since its inception. It funded the world’s first industrial steam railway, and introduced the world’s first ATM machine in 1967. It also came top in naming the UK’s first female branch manager. These are some of the significant achievements Barclays has made over the years.
Barclays is a popular choice for mortgages in the UK. Over 110,000 customers took out a mortgage or further borrowing on their property from the bank in 2018. As of July 2018, it offers 80 different mortgages, most of which last two, three, five or 10 years. The interest rate on mortgages provided by the bank is also impressive. In 2018, the average interest rate of a two-year fixed-rate mortgage from Barclays was 2.01%, compared to the industry average of 2.81% (Cheung, 2018).
Weaknesses of Barclays
A number of controversies have affected Barclays last few years. For instance, the bank was accused of violating international money laundering laws in 2009. It was also accused of helping fund President Robert Mugabe’s government in Zimbabwe. HM Revenue and Customs in the UK also accused Barclays of designing and using two schemes to avoid substantial amounts of tax. Consequently, the UK Treasury ordered the bank to pay £500 million in tax in 2012 (BBC, 2012).
Poor customer satisfaction rate is also a problem for Barclays. For instance, the Bank became No 5 in overall service quality in an independent survey in February 2019 which asked customers of the 16 largest personal current account providers in the UK. It became No 9 in services in branches. However, it became 2nd in online and mobile banking services.
Opportunities for Barclays
While Barclays is a popular choice for mortgages in the UK, the bank can grow further in this area. It has 9.6% of UK mortgage market share, whereas the market leader, Lloyds Banking Group has 21.2% of the market share (Jolly, 2018).
Barclays currently operates in over 50 countries and employs 156,000 employees. It can grow further in many of its existing markets. Particularly, emerging markets offer the bank opportunities for further growth. Likewise, expanding further into the US market is a fantastic prospect for the company as around a fifth of the bank’s capital is allocated to the country. Operating in new geographical locations is also worth exploring.
Threats to Barclays
Threat is the last element to address in the SWOT analysis of Barclays. Barclays faces fierce competition from a number of competitors in different markets. The main competitors of Barclays are UBS, RBS, Deutsche bank, HSBC, Morgan Stanley, Credit Suisse, JP Morgan and Chase, Goldman Sachs Group, Wells Fargo, and ABN AMRO.
Legal challenges are also considered threats. For instance, The Serious Fraud Office (SFO) in the UK has charged Barclays Bank PLC with ‘unlawful financial assistance’ related to billions of pounds raised from Qatar in 2008. Barclays holds a banking licence that allows it to operate in different countries. However, if the bank was found guilty, it could lose that extremely important licence (BBC, 2018).
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Last update: 01 March 2019
Barclays (2018) Who we are, available at: https://home.barclays/who-we-are/ (accessed 25 February 2019)
BBC (2018) Barclays Bank charged over Qatar loans, available at: https://www.bbc.co.uk/news/business-43029731 (accessed 01 March 2019)
BBC (2012) Barclays Bank told by Treasury to pay £500m avoided tax, available at: https://www.bbc.co.uk/news/business-17181213 (25 February 2019)
Cheung, C. (2018) Barclays mortgage review, available at: https://www.which.co.uk/money/mortgages-and-property/mortgages/mortgage-lender-reviews/barclays-mortgage-review-a9ul35x9p196 (accessed 28 February 2019)
Jolly, J. (2018) Lloyds loses mortgage market share as HSBC and RBS rise, available at: http://www.cityam.com/266020/lloyds-loses-mortgage-market-share-hsbc-and-rbs-rise (accessed 01 March 2019)
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Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.