Proposal

On
Strategic Analysis of Standard Chartered Bank (SCB)

Prepared for:
Prof. Dr. A.K.M. Saiful Majid
Course Instructor
Course Title: Strategic Management (W615)

Prepared by:
Muhammad Sayem Ahmed
ID: ZR1901013, Batch: 33rd

Institute of Business Administration

University of Dhaka

Date of Submission: June 07, 2020

 Letter of Transmittal

June 07, 2020

Prof. Dr. A. K. M. Saiful Majid

Institute of Business Administration

University of Dhaka

Dhaka, Bangladesh.

Sub: Submission of Term Paper on ‘Strategic Analysis of Standard Chartered Bank (SCB)

Dear Sir,

With due respect, it is great pleasure to submit the term paper on “Strategic Analysis of Standard Chartered
Bank (SCB)” for the course Strategic Management (W615). This was a great learning opportunity for me
to work on the term paper. It has provided me thorough understanding about the strategies that are practiced
in SCB and also provided an overall idea about various strategies taken by different organizations.

While preparing this report, I got opportunity to get exposure of the Strategic Management issues with
practical situation in this Bank. I am personally thankful to you for giving me such an opportunity and
provide your kind and thoughtful guidelines to prepare the report.

I hope this report will match with your expectation. I humbly request your honour to accept my report.

Sincerely yours,
Muhammad Sayem Ahmed
ID: ZR1901013; Batch:33
 Acknowledgement

This report is prepared as per the requirements of the Strategic Management course under the Executive
MBA Program of IBA, University of Dhaka. To provide this opportunity and thoughtful guidelines, I am
really grateful to the course teacher, Professor Dr. A. K. M. Saiful Majid Sir. It is his vision and
contemporary thinking which have enlighten me to put my focus on such an important issue that is to know
my organization though Strategic Management objectives and tools.

I would also like to thank my superiors at Standard Chartered Bank for enlightening me on the banks
strategic priorities, moves and direction and guided me to explore the relevant papers of the bank available
at the employee bridge and resource portal for preparing my term paper. The experience & insight I have
gained through working in Standard Chartered Bank and by reading various materials such as Group News
circulated internally as part of Email Broadcast in Standard Chartered Bank has helped me a lot to
understand different elements related to my study. I am also grateful to my colleagues at Standard Chartered
Bank who have extended their cooperation and suggestions to me while preparing my report.

Finally, I want to keep my thanks to my family members who have sacrificed a lot letting me to give
attention to my studies from the very beginning of my EMBA program at IBA and during the preparation
of this report.

It was a great opportunity to analyze the strategic management of Standard Chartered Bank. The experience
I have gathered will help me to contribute more to Standard Chartered Bank. I do believe this report will
also be helpful for the concerned authority of Standard Chartered Bank.
 Table of Contents

1. Introduction .......................................................................................................................................... 1
1.1 Origin of the Report ...................................................................................................................... 1
1.2 Objective of the report ................................................................................................................. 1
1.3 Significance of the Study ............................................................................................................... 1
1.4 Scope of the Study ........................................................................................................................ 1
1.5 Methodology................................................................................................................................. 2
1.5.1 Research design .................................................................................................................... 2
1.5.2 Data collection method and instrument ............................................................................... 2
1.6 Limitations of the study ................................................................................................................ 2
2 Organization Profile: Standard Chartered Bank.................................................................................... 2
2.1 Overview ....................................................................................................................................... 2
2.2 Product and Services..................................................................................................................... 3
2.3 Organizational Hierarchy .............................................................................................................. 4
2.4 Growth & Performance of Standard Chartered Bank ................................................................... 4
3 Strategic Overview: Standard Chartered Bank ..................................................................................... 4
3.1 The vision of Standard Chartered Bank ........................................................................................ 4
3.1.1 Critical Analysis of the Vision Statement of SCB .......................................................................... 5
3.2 The Mission of Standard Chartered Bank ..................................................................................... 5
3.2.1 Critical Analysis of Mission statement of SCB ....................................................................... 5
3.3 The core values of SCB .................................................................................................................. 6
3.4 Brand Promise of SCB ................................................................................................................... 6
3.5 Goals and Objectives of SCB ......................................................................................................... 6
3.6 SCB Balanced Scorecard ................................................................................................................ 6
3.7 SCB’s Strategic Priorities ............................................................................................................... 7
3.7.1 Secure the Foundations ........................................................................................................ 7
3.7.2 Get Lean & Focused .............................................................................................................. 7
3.7.3 Invest & Innovate .................................................................................................................. 8
3.8 Strategic Intent ............................................................................................................................. 8
3.9 Strategy making Hierarchy ............................................................................................................ 8
3.10 Customer Value Proposition ......................................................................................................... 8
3.11 Competencies ............................................................................................................................... 8
3.11.1 Core Competencies ............................................................................................................... 9
3.11.2 Distinctive Competencies...................................................................................................... 9
 3.12 Business Model Canvas ........................................................................................................... 10
4. Situation Analysis ................................................................................................................................ 10
4.1 Industry Overview ....................................................................................................................... 10
4.2 Industry Life Cycle ....................................................................................................................... 11
4.3 Dominant Traits .......................................................................................................................... 11
4.4 Drivers of Change ........................................................................................................................ 11
4.4.1 Long Term Industry Growth Rate........................................................................................ 12
4.4.2 Financial Inclusions ............................................................................................................. 12
4.4.3 Regulatory Influences of Bangladesh Bank ......................................................................... 12
4.4.4 Technological Changes ........................................................................................................ 12
4.4.5 Product and Marketing Innovation ..................................................................................... 12
4.5 Key Success Factors of the Industry ............................................................................................ 12
4.6 Strategic Group Mapping ............................................................................................................ 13
5. Macro-Environment Analysis .............................................................................................................. 13
5.1 Political Factors ........................................................................................................................... 13
5.2 Economic Factors ........................................................................................................................ 14
5.3 Social Factors .............................................................................................................................. 15
5.4 Technological Factors.................................................................................................................. 15
5.5 Environmental Factors ................................................................................................................ 16
5.6 Legal Factors ............................................................................................................................... 16
6. Industry Analysis ................................................................................................................................. 17
6.1 Porter’s Five Forces Model of Competition ................................................................................ 17
7. Internal Analysis .................................................................................................................................. 18
7.1 SWOT Analysis............................................................................................................................. 18
8. Overview of Current Competitive Business Strategy .......................................................................... 20
8.1 Generic Competitive Strategy of Standard Chartered Bank ....................................................... 20
9. Strategy of Operation ......................................................................................................................... 20
9.1 Offensive Strategies .................................................................................................................... 20
9.2 Defensive Strategies ................................................................................................................... 21
9.3 Blue Ocean Versus Red Ocean strategies ................................................................................... 21
9.4 Diversification into Mix of Related and Unrelated Businesses ................................................... 21
9.5 Strategic Partnership & Outsourcing of SCB ............................................................................... 21
9.6 Global Strategy of Standard Chartered Bank. ............................................................................. 21
10. Ethics, Corporate Culture, Code Of Conduct, Leadership And Corporate Social Responsibility .... 22
 10.1 Ethics & Code of Conduct of SCB ................................................................................................ 22
10.2 Leadership & Corporate culture at SCB ...................................................................................... 22
10.3 Corporate Social Responsibility of SCB ....................................................................................... 23
11. Recommendation & Conclusion ..................................................................................................... 23
Appendix ....................................................................................................................................................... a
 Executive Summary

Standard Chartered Bank was formed in 1969 through the merger of two separate banks, the Standard Bank of British
South Africa and the Chartered Bank of India, Australia and China. Standard Chartered Bank opened its first branch
in Bangladesh in 1948, in Chittagong. SCB acquired Grindlays Bank in Bangladesh in August 2000, and commercial
banking business of American Express Bank in 2006. Standard Chartered Bank offers a wide range of service across
all segments (Corporate & Institutional Banking, Commercial Banking and Retail Banking). SCB follows a flat and
dynamic organization that focuses on its client facing businesses These client-facing businesses of SCB are supported
by its global functions to run operations smoothly and consistently with legal and regulatory obligations, purpose and
risk appetite.

The mission of SCB is to drive commerce and diversity through unique diversity and vision is to transform business
to build long sustainable return by focusing on its strength and optimizing low returning area to become leader in the
markets SCB operate. The strategic priorities of SCB are to secure its foundation, get lean and focused, invest and
innovate. The strategic objective of SCB to grow its affluent business is supported by its financial objective of targeted
income growth of 5% to 7% by 2021. The scorecard analysis reveals that its financial and strategic objectives are
SMART and supports each other towards achieving the vision and fulfilling its mission. The SMART objectives are
set by 4 strategic levels of SCB: Corporate, Business, Functional and Operational strategies that are consistent.

The business model of SCB is effective and efficient as SCB earns income through interest revenue, fees and
commission by targeting the affluent customer base in each client segment. By operating over 114 years in
Bangladesh, SCB has developed its core competencies: knowledge, transparency, customer focus and distinctive
competencies of strong asset base, technology, high performance team to gain sustainable competitive advantage.

The banking sector of Bangladesh is in the growth stage. The total size of the sector at 26.54% of GDP dominates the
financial system. The drivers of change are: prevailing long-term industry growth, more financial inclusion, stricter
regulatory influences and rapid technology changes. Banks must capitalize these opportunities as key success factors
towards sustainability and larger profits.

The PESTEL Analysis of SCB reveals that SCB has an edge over existing competitors in terms of political factors,
economic factors, social factors and technological factors. The current political situation in Bangladesh is stable and
corporate tax in banking sector has been reduced for SCB to 40% being a non-listed bank in Dhaka stock exchange
Bangladesh. Bangladesh has a prevailing growth rate of 8.13% and is expected to be an economy of 500 billion USD
by 2030. The social factors are also changing and moving towards credit-based economy from cash based economy.
SCB is investing heavily in technology such as artificial intelligence, application programming interface, machine
learning to capitalize the growth opportunity. SCB has a strong position in legal matters in Bangladesh as it focuses
on following local and group regulations and policies that are more stringent. However, legal fines in other markets
can impact performance in Bangladesh due to ripple effect. Also, SCB need to focus more on its green baking
initiatives.

Porter’s 5 forces reveal that threats of new entrants for SCB are low as regulatory requirement is high and SCB has
strong customer base. SCB also has favorable condition due to low supplier buying power. However, SCB should
take appropriate measure to protect from the threat of new substitute due to financial inclusion and technology, high
customer buying power and growing, intense competition that might be unfavourable for SCB.

SCB‟s strategic group reveals that SCB‟s major competitor in corporate banking are CITI NA and HSBC and major
competitor in retail banking are Brac, Eastern Bank, City and Dutch Bangla. SCB is still leading in terms of profit
margin through focused differentiation strategy and its key strengths such as brand name, affluent customer base,
technology, strong governance, high performance team and diverse network that enable SCB to facilitate business
globally for local firms that intends to enter international market.

i)
SCB needs to focus on its weakness such as low number of ATMS, branches and low returning products such as
master titanium cards. SCB has deployed defensive strategy against its weaknesses by partnering with Bkash to
gain access to Bkash Accounts through SCB‟s i-banking platform and launching of SC Pay that act as ATM and
cash deposit machine simultaneously.

The offensive strategy used by SCB is facilitating business and acquisition of Akij by Japan Tobacco, Acquisition of
Malaysian firm by Akij and support Square Pharma to open factory in Kenya. The blue ocean strategy of SCB is SCB
was pioneer in card business and is still the only settlement bank in Bangladesh for Visa and Master card. SCB is also
entering Blue Ocean through planning of launching of artificial intelligence and machine learning in banking industry
of Bangladesh.

SCB is a transnational company (Think Global and Act Local). The strategic alliance of SCB is acquisition of
Grinlays, American Express and formed partnership with Grameen Phone to launch Co brand card to increase
market share. SCB has outsourced some activities such as card cheque issuance and contact point verification,
courier delivery to reduce cost and focus on core business. SCB is planning to outsource card production as well.

SCB follows ethical business practices and has zero tolerance for negligence and regulatory breach. The code of
conduct guide employees to treat customer fairly, engage in fair business, establish proper escalation channels, adhere
to global and local regulations, work within jurisdiction and prevent corruption, bribery, fraud and malpractices by
raising awareness and setting proper controls.

The leadership style of SCB is transformational where leaders lead by example and employees are encouraged to
display valued behavior through empowerment.

The corporate social responsibilities of SCB are seeing is believing that tackles avoidable blindness globally by
funding eye care projects for the needy and provide financial education to youth. SCB also provided income
generating vocational training in horticulture, livestock rearing, ICT, financial education and so on, and in view of
the absence of basic sanitation services, latrine facilities.

In order to grow and sustain through proper strategy formulation and execution, it is recommended that SCB focus
on shifting towards best cost provider; invest in technology; increase fee based income to drive growth; redesign
credit portfolio, lower nonperforming loan and focus on recovery, optimize products with low returns, lower cost of
fund deposit and strengthening employee base through talent acquisition, training in digital skills and proper reward
incentive program.

ii)
 List of Figure

Figure 1: Products & service Offerings .................................................................................................................. ..3

Figure 2: Industry Life Cycle of Banks in Bangladesh ........................................................................................... 10
Figure 3: Strategic Group Mapping ..................................................................................................................... ..12

List of Table

Table 1: Critical Analysis of Vision Statement of SCB.......................................................................................... 5

Table 2: Balanced Scorecard of SCB ..................................................................................................................... 7
Table 3: Strategy Levels at SCB ............................................................................................................................. 8
Table 4: Business Model canvas of SCB ................................................................................................................ 9
Table 5: SWOT Analysis ..................................................................................................................................... 18

List of Acronyms
Acronym Elaboration
SCB Standard Chartered Bank
LC Letter of Credit
S&P Standard & Poor
API Application Programming Interface
MANCOM Management Committee
CEO Chief Executive Officer
NBFI Non-Banking Financial Institution
GDP Gross Domestic Product
SME Small & Medium Enterprise
ATMs Automated Teller Machine
POS Point of Sale Terminal
EMV Europay, Master, Visa
CDM Cash Deposit Machine
DBBL Dutch Bangla Bank
UIS UNESCO Institute for Statistics
EU European Union
LDC Least Developed Country
USD US Dollar
TK Taka
CEMS Customer Experience Module
S2O Straight Through Operations
NPL Non-Performing Loan
GP Grameen Phone
LNG Liquid Natural Gas
KPI Key Performance Indicator
P3 Pay, Performance and Potential
CSR Corporate Social Responsibility
BD Bangladesh

iii)
1. Introduction

1.1 Origin of the Report

As part of Strategic Management course of the Executive MBA program of Institute of Business
Administration (IBA), University of Dhaka, this report has been prepared. Strategic Management Course
is the capstone course. The basic purpose of this report is to relate the textual terms learned throughout the
course with theoretical as well as practical understanding on various issues related to crafting and executing
strategic management practices in Standard Chartered Bank (SCB).

1.2 Objective of the report

Broad objective of this report is to conceptualize the current practices on strategies and problems of
Standard Chartered Bank (SCB), to identify and suggest scopes of improvement and finally to devise some
recommendations to improve the strategic aspects of the company.

For the analysis, below issues are focused mainly:

• To understand and analyze various concepts, tools and techniques of strategic management to
evaluate SCB‟s overall strategy.
• Scrutinise the vision and mission statement of SCB.
• Scrutinise the objectives and core values of SCB.
• Conduct situational analysis considering external and internal environmental factors.
• Identification of the competitive business strategy of SCB.
• Identification and focus on the strategies for diversification of SCB.
• Highlight the views and SCB practices on ethics and Corporate Social Responsibilities.
• Scrutinise the strategic position of SCB in the banking industry and also to find out how well its
present strategy is working.

1.3 Significance of the Study

The study and its results are very significant to the following stakeholders:

a) Management: The management of Standard Chartered Bank would understand where they stand in
terms of historical and current performance in comparison to their major competitors. This study will
give management insights into problem areas where SCB needs to focus their attention in order to
solve their problems and also identify their strength which is helping them to gain competitive
advantage.

b) Employees: Moreover, once the study identifies the weakness of SCB through the results of this
study, it will help management communicate the effective strategies taken as a measure, to the
employees more clearly so that the employees can understand their goals.

1.4 Scope of the Study

In this report, I tried to cover a brief view of the banking industry in Bangladesh and evaluate the
competitive strategies adopted by SCB to get a clear picture of the bank's current steps in the industry.
1
Internal and external assessments of the Bank had been made using the lessons learned in the Strategic
Management Practices. Based on the findings of the report, possible recommendations are given that can
be accepted by my organization Standard Chartered Ban.

1.5 Methodology
1.5.1 Research design
The report begins with an organizational overview of the bank; The mid-section has strategic overviews,
external and internal business environment, and generic competitive strategies of Standard Chartered Bank.
As the report progresses, consortium or offensive strategy, Red Ocean or Blue Ocean strategy, other
possible alternatives to strategic alliances and potential alternatives to strategies to compete in the
international market are discussed to strengthen the firm's competitive position. In the last section, diversity
strategies, corporate social responsibility (CSR), ethical practices of the SCB, some alternatives to forming
a company capable of implementing good strategies and the process of managing internal activities,
corporate culture and leadership are discussed. Finally, in the light of the strategic content of the report, a
complete set of recommendations is made for the organization.

1.5.2 Data collection method and instrument

The relevant information has been collected from different sources.
• Primary Data Source: The primary sources include my personal experience working at SCB since
2015. Also, primary data has been collected through mix of structured and unstructured interviews
with key employees of the banks at different levels.
• Secondary Data Source: The secondary sources are mostly financial statements, annual reports,
newspapers, SCB website, and other publications of SCB that is publicly available.

1.6 Limitations of the study

The report has few limitations. The limitations are raised from different reasons which are given below:
• This report suffered from inadequate secondary information.
• Sufficient records, publications, facts and figures about the industry are also not available in
many cases.
• Some data could not be collected for confidentiality or secrecy of management.
• Covid -19 situation acted as an obstacle while preparing this report.

2 Organization Profile: Standard Chartered Bank

2.1 Overview
Standard Chartered Bank was formed in 1969 through the merger of two separate banks, the Standard Bank
of British South Africa and the Chartered Bank of India, Australia and China. These banks had capitalized
on the expansion of trade between Europe, Asia and Africa. The Chartered Bank was founded by James
Wilson following the grant of a Royal Charter by Queen Victoria in 1853. The bank opened in Mumbai
(Bombay), Kolkata and Shanghai in 1858, followed by Hong Kong and Singapore in 1859. The traditional
trade was in cotton from Mumbai, indigo and tea from Kolkata, rice from Burma, sugar from Java, tobacco
from Sumatra, hemp from Manila and silk from Yokohama. The Standard Bank was founded in the Cape

2
Province of South Africa in 1862 by John Paterson and started business in Port Elizabeth in the following
year. The bank was prominent in financing the development of the diamond fields of Kimberley from 1867.
Currently SCB operates across more than 70 countries and have segmented the countries within 4 major
geographical regions: Greater China & North Asia; ASEAN & South Asia; Africa & Middle East; Europe
& America.

Standard Chartered Bank opened its first branch in Bangladesh in 1948, in Chittagong, the port city and a
major trading hub. With the acquisition of Grindlays Bank in Bangladesh in August 2000, SCB inherited a
presence in this country that dates back to 1905. The commercial banking business of American Express
Bank was also acquired in 2006. The Bank has 24 branches & sub branches and 93 ATMS and offers a full
range of banking services across all segments. SCB, by operating more than 114 years in Bangladesh, have
earned the distinction of being an innovator in the market with many firsts, from becoming the first
international bank to extend credit lines to independent Bangladesh; opening the first external letter of credit
(LC) in Bangladesh in 1972; introducing the first ATM; launching the first debit card, credit card,
international debit cards and the first Shariah-compliant Credit Card; the first 24-hour contact center; the
first state-of-the-art Online Banking Platform, and the first cross border acquisition finance. Moreover, SCB
have retained our AAA credit rating for 10 years in a row and acted as a co-advisor to Bangladesh Bank to
help the country achieve its first ever sovereign credit rating by working closely with S&P. Furthermore,
SCB have been recognized as the largest tax payer in the banking sector in 2016. SCB was the only foreign
commercial bank to receive the Bangladesh Bank Remittance Award 2016, for our role in facilitating
inward flow of remittance in Bangladesh.

2.2 Product and Services

Standard Chartered Bank offers a wide range of service across all segments as illustrated in figure below:

Figure 1: Product and Service offering

3
2.3 Organizational Hierarchy

SCB follows a flat and dynamic organization that focuses on its client facing businesses: 1) Corporate &
Institutional Banking; Commercial Banking; Private Banking and Retail Banking. These client- facing
businesses of SCB are supported by its global functions to run operations smoothly and consistently with
legal and regulatory obligations, purpose and risk appetite. Global functions of SCB include: (a) Human
Resources (b) Legal & Compliance (c) Technology & Innovation (d) Risk (e) Operations (f) Corporate
Affairs & Brand and Marketing (g) Group Internal Audit and (h) Conduct, Financial Crime and Compliance.
A simplified version of organogram is given in appendix Section (pg. b).

2.4 Growth & Performance of Standard Chartered Bank

Standard Chartered Bank’s financial highlights of 2019 operating globally is given below (Data is slightly
altered due to confidentiality):

• Income grew 7% (or 9% on constant FX) to approx. US$4,000 million, and Operating Profit (OP)
rose 7% to approx. US$1,000 million. These were achieved while keeping costs flat from 2018.
• Six of our 12 markets – India, Bangladesh, Vietnam, Australia, Nepal and Sri Lanka –delivered
double-digit income growth! In addition, Singapore was ASA’s largest OP contributor with 35%
year-on-year (YoY) growth.
• All Client Segments delivered strong income growth, with Corporate and Institutional Banking
leading the pack at 14% YoY.
• Our Optimisation Markets, India and Indonesia, have made promising progress. India grew income
by 10% and working profit by 35%; Indonesia grew income by 5% and working profit by 14% and
ASA Employee Net Promoter Score (eNPS) improved 66% to 12.6, reflecting our continued
commitment to improving employee engagement.

Bangladesh falls in the ASEAN and South Asia market region. The consolidated operating profit
of ASEAN and South Asia market is approx. $ 4,000 million. Bangladesh is the 3 rd fastest
growing country in the region and has high group focus.

3 Strategic Overview: Standard Chartered Bank

3.1 The vision of Standard Chartered Bank

“Our new sustainability vision is to become one of the sustainable and responsible banks, and
the leading private sector catalyser of finance for the SDGs where it matters most, in Asia, Africa
and the Middle East”

4
 3.1.1 Critical Analysis of the Vision Statement of SCB

Table 1: Critical Analysis of Vision Statement of SCB

Required Attribute SCB Evaluation

Comply Draws a clear picture of where the organization wants to head towards in days to
Graphic
come.

Forward Looking Comply Future driven as it seeks to be sustainable growth and wants to unlock the potential
& Directional value of the franchise.

Comply Wants to create a long-lasting impact by focusing on key areas and building key
Focused
partnership for sustainable growth.

Comply Has room for flexibility in its determination to transform the conventional way of
Flexible
doing business in the banking sector.

Comply With a stable performance in last year both globally and locally as well as operating
for last 114 years, the Bank has already established itself as a leading multinational
Feasible
bank and so far, it would be not an exaggerated statement that the SCB is a
leading banking institution in Bangladesh.

Directional path Comply The directional path SCB chooses is focused on long term return, sustainable
makes good growth through excellence. This path is applicable in all the 63 markets SCB
business sense operates.

Memorable Comply The vision statement is very much memorable.

Inspiring & Comply

Desirable and inspiring.
Desirable

3.2 The Mission of Standard Chartered Bank

The mission of standard chartered bank is “Standard Chartered is a leading international banking group
operating in 63 markets worldwide, with purpose of driving commerce and prosperity through unique
diversity by serving client segments with differentiated expertise and building business in dynamic
economies.”

3.2.1 Critical Analysis of Mission statement of SCB

A mission statement usually defines current business activities, highlighting boundaries of current business,
present products and services and types of customers served. It conveys the below queries to be answered.
The mission statement of SCB answers the following questions:
• Who we are: Leading international banking group.
• What we do: Serves client segments with differentiated banking expertise.
• Why we are here: purpose is to drive commerce and prosperity.
• Who is being satisfied: the client’s segments that exist in 63 markets worldwide.
• How is being satisfied: Through unique diversity and differentiated expertise and building
business in dynamic economies.
• What is being satisfied: Customer various banking needs.
5
3.3 The core values of SCB
The core values of Standard Chartered Bank (SCB) are:
• Do the Right Thing: Conduct business operations with commitment to business ethics, honesty,
fair means and credibility.
• Never Settle: Always thrive for success and beat your own standards and outperform market
standards.
• Better Together: Focus on team work to achieve target goals and standards.

3.4 Brand Promise of SCB

Standard Chartered Bank’s brand promise is “Here for Good” which focuses on three pillars that define
its mission and purpose. These are -
• Here for People
• Here for Prosperity
• Here for Long run.

3.5 Goals and Objectives of SCB

The goals and objectives of Standard Chartered bank in broad perspective is:
• Earn growth returns in middle term in strong, safe and sustainable manner while maintaining
both cost and capital discipline.
• Secure foundations through strong capital and liquidity position and appropriate risk appetite and
by focusing on people.
• Embed a performance oriented and innovative culture which emphasize conduct and
sustainability.
• Invest to further accelerate growth in higher returning international network and affluent client
business.
• Eliminate the drag on returns from several low returning markets through cost and capital action
investments and potentially disruptive partnership.
• Streamline operations through lean focus to ensure customer delight and drive productivity.
• Invest in digital initiatives to transform business – augmenting strong positions in more mature.
• markets and collaborating with best-in-class partners to quickly roll-out top-class products and
services.
• Rapidly expand sustainable financing to drive a positive social, environmental and economic
impact.
• Embed a culture of ethical banking.

3.6 SCB Balanced Scorecard

The balance scorecard or the performance scorecard of SCB Bangladesh highlighting the financial
and strategic objectives for the calendar year 2020 are presented below –

6
 Table 2: Balanced Scorecard of SCB
Financial Objectives Strategic Objectives
Increase Return on Tangible Equity to more than Implement $700 million cost reductions
10% in 2021. globally. Reduce cost inflation.
Capital Equity Tier 1 ratio to be maintained 13%
Grow affluent businesses. Optimize low
-14% and increase Shareholder’s dividend value
returning markets.
by multiplier of 2 in 2020.
Transform and disrupt with digital innovation.
Compound Annual Growth rate of Income should Overtake key competitors via value added
be 5%-7% from 2019-2021. service 100% compliance to regulatory and
group policies
Review compensation to support high
Reduce credit impairment loans by 35% in 2020.
performance work system

• Specific: The set objectives are very specific. It makes it very clear what SCB Bangladesh wants to
achieve the upcoming calendar year.
• Measurable: The objectives are measurable. Each objective has a clear bar which can be measured at
the end of the calendar year to understand if this has been achieved.
• Achievable: The objectives are achievable because this is not unreasonably higher from what the bank
has achieved in the past calendar year.
• Realistic: The objectives are not realistic. Given the economic slowdown due to the Coronavirus
pandemic and the coming recession, it is unlikely that the objectives can be realistically achieved.
• Time Bound: The objectives are time bound as these are set for the calendar year 2020.

3.7 SCB’s Strategic Priorities

The strategic priorities of the Bank are-

3.7.1 Secure the Foundations

• People: Focus on people to develop their capabilities, deep technical skills through
proper training, fair pay charter, valued behaviour, digital workforce to ensure proper
risk management by establishing proper risk management framework.
• Compliance & Security: Focus on compliance and security through cloud
governance, transformation and remediation program and repeatable security design
as per group standard.
• This is to ensure that capital and liquidity position remain strong and risk appetite remains
calibrated.

3.7.2 Get Lean & Focused

• Efficiency: Focus on efficiency by removing inefficient cost, track overall expenses
to ensure it remains flat
• Availability: Create a culture of excellence by building client ecosystem and alliance
initiatives. Improve client experience through an enhanced end to end digital offering,
with intuitive platforms, best in class products and service responding to change in the

7
 digital habits of client in marketplace. Focus on creating resilient and scalable
architecture.

3.7.3 Invest & Innovate

• Effectiveness: Invest to digitize retail banking, ensure customer centricity, invests in
application programming interface (API) to ensure that customer service is properly
delivered within standard level agreement and minimum turnaround time possible.
• Returns: Invest in markets with new opportunities, affluent customer base to capitalize and grow.

3.8 Strategic Intent

Standard Chartered Bank wants to maintain its position as the leading bank operating in
Bangladesh as a revenue and market partner. Bangladesh is currently the third fastest growing
market for SCB and ninth among other markets operated by the group. SCB Bangladesh wants
to be in the top five in the SCB group.

3.9 Strategy making Hierarchy

The strategy making level at SCB is as below:
Table 3: Strategy Levels at SCB
Corporate Level Business Level Functional Level Operating Level
Strategy Strategy Strategy Strategy
- Group management CEO & Top Mid-Level Management Lower Level Management
committee (MANCOM) Management Team in incorporates this level of who translates functional
& Group CEO. Bangladesh incorporates strategy by translating level strategy and work
- Headquartered in this level of strategy by Business Level Strategy towards achievement of
London. translating Corporate - Division/Branch Head corporate level strategy.
- Incorporates corporate Strategy - Manager of each
level. - Country based unit/division
- New Global Strategy. initiatives
- New Subsidiary. - Market Diversification
- Group driven projects.
- Geographical
Expansion.

3.10 Customer Value Proposition

The bank strives to meet the banking requirements for its customers at a price that customers of
all target categories: retail, corporate banking and commercial banking will consider a good value.
Banks attract deposits at good competitive rates; And provides loans and advances to borrowers
at attractive interest rates. The Bank provides a variety of financial products and services to best
meet the unique needs of each of its customer divisions.

3.11 Competencies
The ability to do something with success or efficiency has two skills: core skills and unique skills.
The key skill is a business skill that is necessary or central to its overall performance and success.
An individual skill is a power that sets a company apart from its competitors The core and
distinctive competencies of SCB are discussed below:

8
 3.11.1 Core Competencies
The core competencies of SCB are as below:
Knowledge Determination

Experience and Expertise Zeal for Improvement

Customer Orientation and Focus Pursuit of Disciplined Growth Strategies

Transparency Reliability

SCB has a diverse knowledge and understanding of local and global banking systems, processes,
policies, rules and regulations. SCB has always succeeded in following the best practices and has
successfully standardized its activities by adhering to strict local business practices that are fair,
reliable and transparent. SCB has successfully established a customer-centric focus on business
practice which has become one of its key competencies for business success. Since SCB has been
operating in Bangladesh for more than 114 years and is present in 633 markets, it has gained
expertise through experience and learning curve.

3.11.2 Distinctive Competencies

The distinctive competencies of SCB are as below:
Professionally Strong Board of Directors Focus on Diversification
Strong Capital Base & Liquidity position Superior Quality Customer Service
Transparent and Quick Decision-Making Unique Corporate Culture
High-Performance Teams Strong Asset
Delighted & Strong Customer base Base Strong
Effective Internal Control Brand
Effective Risk Management Framework
Unlike its competitors, SCB has a strong capital base and liquidity position that could boost its financial
performance in the coming years. SCB also invests in industry technology that allows SCB to serve its
customers and make them happy. SCB thinks of its customer's needs like theirs and meets their needs in a
way that does not match the competitors. Also, the presence of the brand has created a sense of confidence
and reliability which is critical for any bank success This unique skill has allowed SCB to gain a competitive
advantage over its competitors.

9
3.12 Business Model Canvas
Table 4: Business model canvas of SCB.
Value Proposition of Standard Chartered Bank
Universal bank, In depth knowledge of Financial markets and Advisory & counseling on investment decisions

Channels Customer Relationship Customer Segment

Branches Intermediary Bank in Transnational Corporate Customers
Call Centers Boundaries Individuals
Website & verified social media Consumer Bank Governments
Corporate & Regional Offices Whole Sale Bank Credited Investors
Specialized Advisors Online Banking Wealthy Investors
Mobile & Mobile App Account Management Financial institution
Automation wherever possible
User’s Community
Key Resources Key Partners Key Activities
A network of more than 1200 branches Depositors Risk Assessment
and outlets across 63 markets and Financial Market Operations Portfolio Building
employees around 87000 people Investment Partners Retail & Consumer Banking
Brand Awareness Bangladesh Bank Corporate & Institutional Banking
Qualified Staff National Board of Revenue Commercial Banking
Solid Reputation Security and Exchange Commission Advisory & counseling
Networks Financial Community Treasury securities
Financial Strength Vendors Operations

Cost Structure Revenue Stream

Cost of Fund Return on Portfolio investments
Salaries, compensation of Employee Commissions
Cost of IT Infrastructure Underwriting fees
Rent of Premises Premium on insurance policies
Taxes Spread on exchange rate
Legal Earning from Credit Cards & Loans issuance and
Insurance service
Consumer Banking
Corporate & Institutional banking
Investment Banking

4 Situation Analysis

4.1 Industry Overview

The banking industry plays the most important role in the formation of capital, the basic structure of the
financial system. Most of the financial institutions in the country are provided by the banking sector in the
absence of a certified capital market and a vibrant bond market. According to the website of Bangladesh
Bank, there are 59 scheduled banks and 34 non-bank financial institutions.

10
4.2 Industry Life Cycle
At present banking industry of Bangladesh is in
Growth Stage. Demand of maximum existing
customers is increasing day by day. Moreover,
numbers of population of Bangladesh are out of
banking service till today. Every bank is trying for
more inclusive banking techniques like agent
banking. On the other hand, economy of
Bangladesh is also growing very fast. Banking
industry has been one of the main catalysts of this
growth. If we look at the financial report of the
banks, we will see that both asset & liabilities are
increasing every year. NBFI is also competing with
banks. Nonperforming Loan in the industry is
present in alarming situation. UCB is always
focusing on retaining and acquiring the customers
with its wide array of product and services.
Figure 2: Industry life cycle of banks in BD

4.3 Dominant Traits

Dominant traits of the industry are salient characteristics of an industry. Banking is a service
industry and a sub-sector of the financial sector. In absence of a vibrant capital market in the
country, enterprises mainly depend on banking sector for borrowed capital. Its dominant traits
can be summarized as follows-
•
High growth of loans, advances and deposits over the years
•
High interest rates both on loans and on deposits (although presently the rate is slightly reduced)
•
Reliance on Term Deposit – More than 70%
•
Implementation of Regulatory Capital Framework (BASEL II) from January 2009 and
BASEL III to be adopted by 2019
•
Onsite and off-site supervision by Bangladesh Bank
•
Banks are adopting financial inclusion and expanding financing in SME
•
Highly urban based
•
Name Lending and Directed Lending, leading to Non-Performing Loan
•
Technological breakthrough (i.e. online banking, mobile banking, agent banking)

4.4 Drivers of Change

Industry’s drivers of change have the biggest influence in reshaping the industry landscape and
altering competitive conditions. The following factors are drivers of change for banking
industry in Bangladesh:

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4.4.1 Long Term Industry Growth Rate

The banking industry has been developing steadily over the years, which has had a strong impact on
the landscape of the industry. Since independence, 59 scheduled banks have entered the industry in four
phases and long-term industrial growth is still favourable for the industry.

4.4.2 Financial Inclusions

Private commercial banks are reducing their reliance on large corporate customers and embracing
financial inclusion by expanding financing to SMEs, agriculture and other underdeveloped regions.
Bangladesh Bank is promoting financial inclusion to achieve inclusive growth.

4.4.3 Regulatory Influences of Bangladesh Bank

Bangladesh Bank is the regulatory authority of all banks in Bangladesh. They are conducting audit
activities time to time in every year. They are also arranging trainings for creating awareness in many
special sectors. Bangladesh Bank is issuing circulars, circular letters frequently to regulate scheduled
banks in many areas. Bangladesh Bank can impose many punitive actions for any violation of
regulations.

4.4.4 Technological Changes

Like many industries, technology has shifted the paradigm of conventional banking system. Moreover,
it is adding new ideas in every moment. ATM, CDM, Cash Recycler Machine, Centralized Banking
Software’s, POS machines, Contactless cards etc. are enhancing the banking services in many folds.
Many banks are turning to paperless banking systems through e-archiving solutions.

4.4.5 Product and Marketing Innovation

Product and marketing innovations are reshaping the landscape of the banking industry. Banks are
coming up with innovative banking products and services (i.e. internet banking, mobile banking,
telephone banking, discounts and other facilities such as insta loan, Zero % instabuys for using credit
cards).

4.5 Key Success Factors of the Industry

The key success factors for the banking industry of Bangladesh are as below:
▪ Change in Long Term Industry Growth rate: High GDP and per capita income lead to industry
growth
▪ Emerging new internet capabilities, application and Technology: Technology lowers
cost of operations, reduces TAT and allows banks to grow faster by being efficient and
effective.
▪ Regulatory influences and government policy changes: The regulatory framework is very strict
▪ Change in buyer demographic and lifestyle: Consumers are moving towards credit based
economy.

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 4.6 Strategic Group Mapping

Strategic group is a cluster of industry rivals that have similar competitive approaches and market
positions. For SCB, the strategic group will include the following private commercial banks in
Bangladesh: HSBC, CITI NA, Brac Bank, Eastern Bank and City Bank.

Foreign Banks
(SCB 2nd and 3rd 1st generation Banks
HSBC, Citi NA, Generation Banks Sonali Bank

Commercial Bank (Brac Bank, Islami Bank

Value Added Eastern Bank, City Bangladesh Limited,
of Ceylon)
Service & Price Bank, Dutch Agrani Bank, National
Bangla, Dhaka Bank
(Interest Rate) Bank, Mutual Trust
Bank)

Business Coverage (Asset and Liability)

Figure 3: Strategic Group Mappin

Standard Chartered Bank have successfully managed to provide value added service at a fair price and have
maintained the interest rate spread of more than 5% from 2016-2018. Even though SCB maintains
minimum number of ATMS and have fewer branches, it has successfully managed to place branch at
strategic point throughout country where it operates and have capitalized more on digital and online
banking service than any of its major competitors to serve and delight its target customers. SCB is also
focusing on launching SCB pay that act as ATM and cash deposit machine simultaneously. As per strategic
mapping, it is seen that business coverage of SCB along with other foreign banks is lower. This is because
SCB focus on serving the affluent customer segments through its diverse network and competencies that
other players in banking industry fail to cope with. SCB focuses on doing what it does best which resulted
in higher revenue and operating profits, thus becoming market leader.

5 Macro-Environment Analysis

PESTEL Analysis
A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-
environmental (external marketing environment) factors that have an impact on an organization.
PESTEL stands for: P –Political, E – Economic, S – Social, T – Technological, E – Environmental, and
L – Legal.

5.1 Political Factors

On a scale of 1 (strongly unfavourable) to 5 (strongly favourable), the political situation of Bangladesh

where SCB operates is 4 (quite favourable) to support the growth of banking industry in Bangladesh. The
analysis of factors to support this claim is given below:

• Tax Policies: Corporate taxes for the banking sector in Bangladesh are much higher than in many
Asian countries. As per the budget 2018-2019, corporate tax for publicly traded financial
13
 institutions and non-publicly traded financial institutions has been reduced by 2.5%. Standard
Chartered Bank is currently 40% after the applicable corporate tax reduction. This tax cut will
help the bank to earn more and improve in the current competitive situation.
• Government Stability: After the elections held in December 2011, the government of Bangladesh
is quite stable. The present government is ruling for the third time and has taken many
infrastructural development projects and initiatives to facilitate business. Such initiatives will also
have an impact on the banking sector for business growth. The Ministry of Finance has taken steps
with Bangladesh Bank to address the situation of non-performing loans in the country. The SCB
is in a good position to adapt to government policy changes and comply with the rules.
• Entry Mode Regulations: The rules for new banks to enter Bangladesh are fairly strong, requiring
government approval, compliance with a number of regulations and a large increase in capital
(minimum of Rs 500 crore). These rules have given some benefit to the banks in Bangladesh to
maintain their position. However, in February 2019, the government approved 3 new banks which
will increase competition in the coming days.
• Trade Regulations: Standard Chartered Bank has to comply with various regulations imposed by
the Central Bank (Bangladesh Bank), national bodies such as the National Board of Revenue
(NBR), SCB Group and the tariffs and regulations imposed by foreign governments. These rules
have been imposed to serve the interests of the stakeholders. The SCB is in a better position to
comply with trade rules that comply with approvals and anti-money laundering policies than its
existing competitors.

5.2 Economic Factors

The economic factor for Standard Chartered Bank is 5 (Highly Favourable) on a scale of 1 (strongly
unfavourable) to 5 (strongly favourable). The following reasons support this claim:

• GDP Growth Rate: The current GDP growth rate of Bangladesh for 2018 to 2019 is 8.13%.
• The remittance inflow during first 7 months of fiscal year 2018-2019 rose by 9.31% to 9.08billion
USD.
• Bangladesh has been upgraded to Middle Income Country. The country will graduate out of the
list of LDC in 2021 and can enjoy the EU generalized preference system till 2027.
• The current 12-month average inflation rate as of March 2018 is 5.48%.
• The per capita income of Bangladeshi is currently 1751 USD.
• The export rose by 5.8% to 36.66 billion USD in fiscal year 2018. The target for fiscal year 2019
is 39 billion USD.
• Bangladesh bank holds on to cautious monetary stance by keeping policy rates same due to rising
trend of non-performing loan and to protect against inflation pressure on the economy that is
detrimental to business
• The country offers low to skilled workforce at reasonable cost.
• Trade deficit has narrowed by 11% to 8.62 billion USD in December 2018.
• Recently in June 2018, owners of private commercial banks decided to bring down the interest rate
on lending to 9% and that on deposits to 6%. While most banks are focusing on being competitive
by lowering lending rates, SCB is maintaining a lending rate of 11.5% and a deposit rate of 5.5%
as it has strong liquidity position and a strong base of affluent customers who is willing to pay for
superior value-added service.
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 • The size of Bangladesh economy is currently at 300 billion USD and is projected to grow to 500
billion USD by 2023. The per Capita GDP of Bangladesh is projected to rise from 1599.8 USD to
5734.6 USD in 2030. Bangladesh is in the potential 7% club of 2020 whose economy growth will
be fastest in 2020. SCB is in a very good position to capitalize on the economic factor compared
to its competitors.

5.3 Social Factors

On a scale of 1 (strongly unfavourable) to 5 (strongly favourable), the social factor of Bangladesh where
SCB operates is 4 (quite favourable).

• Bangladesh is moving from joint family structure to nuclear family structure and is highly
concentrated in urban areas.
• Bangladesh is enjoying demographic dividend. It has a young population with 34 percent aged 15
and younger and just five percent aged 65 and older. At present, more than 65 percent of our
population is of working age, between 15 and 64.
• Bangladesh has moved from cash-based economy to credit-based economy following the trend of
consumerism and instant gratification. This has led to consumer financing market growth from TK
295.96 billion and showed a gradual increase to TK 693 billion in 2017 and 607 billion TK in June
2018. The highest market share of consumer finance products (retail banking) in 2017 are: secured
personal loan, credit cards and auto loans.
• Female workforce has increased by 35% reaching 18.1 million from 2008 to 2017 compared to
11% growth in male workforce.
• The literacy rate in Bangladesh has risen remarkably over the past decade to an all-time high of
72.76% in 2016, according to data from the UNESCO Institute for Statistics (UIS). Over the same
period, the literacy rate for females has risen from 43.74% to 69.90%, and for males from 49.83%
to 75.62%.

SCB Bangladesh has formulated a strategic action plan in 2017 to develop women leaders in the bank and
achieve group standards. SCB has also made a huge focus on retail banking to address customer needs by
facilitating the changing customer needs of different customers. As a facilitator, the bank has gained access
to 3.5 crore bKash accounts through strategic partnerships through the internet banking system instead of
opening its own mobile banking platform. SCB is focusing on increasing customer lending by targeting its
employee banking (pay-based) customers who are target conscious and through digital platforms and credit
card instant loans, closely monitoring market trends.

5.4 Technological Factors

Technological risk in Bangladesh banking industry has increased significantly in recent years. Bangladesh
Bank was itself affected by cyber heist in February 2016 where fraudulent transaction by hackers resulted
in capital outflow of $101 million through SWIFT network. Such incident was alarming for entire banking
industry. Every player in banking industry has heavily invested in cyber security for protection against
fraud and cybercrime. SCB is well known for its state-of-the-art technology that is strong enough to protect
against cybercrime. The technological factor for Standard Chartered Bank can be attributed to 5 (strongly
favourable) by considering the following points:

15
 • Standard Chartered increased retail online transactions by 36 percent and active internet banking
users by 27 percent. Standard Chartered has invested heavily in technology to increase
productivity, gain competitive advantage, and reduce turnaround time to enable services to match
competitors.
• SCB has fewer ATMs and POS machines than its competitors. Dutch Bangla Bank has an extensive
network of ATMs. To address its weaknesses, the SCB is introducing a cash reserve system that
can operate simultaneously with ATMs (automatic teller machines) and CDMs (cash deposit
• machines).
• SCB plans to launch contactless debit and credit cards in 2019.
• SCB is working on building data house repository system across its entire platform to reduce
processing time and maintain consistency.
• The Bank is focusing heavily on artificial intelligence machine learning, blockchain and platform
connectivity to capitalize on existing development opportunities in the market. As a multinational
bank, SCB has funds, technical expertise, group systems that have already been tested and proven
results of success in similar markets that do not match local competitors.

5.5 Environmental Factors

Environmental factor can be attributed to 3 (neutral) on a scale of 1-5. Most banks in Bangladesh are
lagging behind on environmental factors and green banking initiatives. SCB has undertaken the following
initiatives but there is more scope of improvement:

• SCB successfully introduces green banking initiative to all users working in rural applications
through a workflow system electronically through Ops Application (S2O) which scans documents
and electronically flows into the customer application green.
• This system is used to process applications from new clients who want to open an account, process
and apply for a card. It has reduced the use of paper in the bank by 80% for all types of applications
for new client on boarding and for opening an account.
• In 2015, Standard Chartered Bank launched Customer Experience Management Systems (CEMS)
that has revolutionized contact center and has enabled them to process service request
instantaneously and electronically received via customer calls. These requests are logged and
recorded on the system server and have greatly reduced the use of paper as part of the green banking
initiative. Operations uses CEMS to process service requests as part of the Green Banking initiative.
• SCB is working with Bangladesh Bank regarding transformation of regulatory reporting structure
to reduce use of paper consumption.

5.6 Legal Factors

On a scale of 1 (strongly unfavourable) to 5 (strongly favourable), the legal factor of SCB in Bangladesh
is 3 (neutral).
The SCB has a strong position on legal issues in Bangladesh due to its focus on adhering to local and group
regulations and policies that are more stringent. The SCB has more intelligent approval monitoring than
any other structure that local banks follow, and has money laundering prevention policies, procedures and
structures in place. Yet it is effective in the global market for legitimate risk SCBs. The SCB has no history
of legal cases in Bangladesh and maintains good relations with key stakeholders such as Bangladesh Bank,
16
National Board of Revenue, Dudok, Financial Crime Prevention and Compliance Branch of Bangladesh
Bank. The SCB also follows proper procedures, competitive laws, health and safety laws, no-confidence
laws, product rules, etc. Although the SCB is stronger in legal matters in Bangladesh than other competitors
in Bangladesh, the SCB has a global presence at legal risk. In 2019, the SCB was fined $ 1.1bn (£ 843m)
for violating U.S. sanctions against Iran and inadequately controlling financial crimes, prior to 2014. These
fines will affect SCB activities in other markets and the bank plans to take more drastic measures to reduce
future recurrences.

6 Industry Analysis

6.1 Porter’s Five Forces Model of Competition

a) Threat of New Entrants: On a scale of 1 (very unfavourable and high risk) to 5 (favourable and low
risk), the threat of new entrants is rated as 4 (low risk and favourable) for Standard Chartered Bank.
The government has already given permission for three new banks (Bengal Bank, People's Bank and
Community Bank Bangladesh). Banks need a huge paid up capital of at least Tk 400 crore and approval
from Bangladesh Bank. In addition, government policy, control and monitoring of Bangladesh Bank is
very high. The performance of most of the banks like Padma Bank (formerly known as Farmers Bank)
is very worrying and only a few sponsoring partners of those banks has their shareholding. New banks
will find it difficult to achieve economies of scale, fast and costly to match the low-cost structure of
SCBs and other existing banks. Also, creating brand equity for the new bank, establishing customer
loyalty is a difficult process and the distinction of products in the banking industry is tougher than
existing banks.
b) Threat of Substitute Products and Services: In case of Banking Industry in Bangladesh, Threat of
Substitute Products is quite high and unfavourable (rated as 2 out of 5).
Deposit products are the same across all banks. The interest rate on savings certificates issued by the
government is much higher than the rate on bank deposits so many depositors are withdrawing money
and buying treasury securities. Small and medium depositors are investors who invest in the stock
market during periods of high returns. Bank products are also uniform in terms of loans and advances
and the cost of switching to buyers is low. Banks face competition from alternative products offered
by nonbanking financial institutions and new products offered by mobile banking service providers
such as developments that act as alternatives. Compared to some banks, transaction-based services
have increased significantly in the last few years. Advances in financial technology may lead to more
alternative products in the future.

(c) Bargaining Power of Customers: The bargaining power of customers in banking industry of
Bangladesh is very high and this is not favourable for bank (1 out of 5).
Considering the 59 scheduled banks and 34 NBFI activities scheduled in the country, customers have
a huge number of options. Good buyers of limited amounts who enjoy the ability to bargain at high
prices. Loans are given to these high quality, trustworthy borrower recipients at the main lending rate
where there are fixed interest rates for individuals and clients with low purchasing power. However,
individuals with purchasing power have several options and short conversion costs. There are very few
opportunities for inequality for banking products in the country. Also, due to globalization and
digitization, customers have complete information about the market, which enhances the customer's
bargaining power. SCB therefore emphasizes on managing and retaining the customer through value
added services and cross-selling of the bank's products as per the customer's requirement.
17
 (d) Bargaining Power of Suppliers: The bargaining power of suppliers in banking industry of
Bangladesh is quite low and favourable for SCB (4 out of 5).
For banks, the main suppliers of funds are depositors. The bank also receives its funds from the
directors. Although depositors have many options for their savings investments, their bargaining power
is relatively mediocre. Depositors can be divided into two large groups - one individual and the other
corporate. Between these two groups, corporate depositors enjoy the ability to bargain higher due to
the perfect size of the deposit. On the other hand, the ability of individual fund providers to bargain is
low in the banking industry because there are plenty of individual savings in the economy and they are
forced to agree with the market rate for depositing their savings. Technology vendors across the
industry have very low bargaining power and SCB's switching costs are very low.

(e) Industry Rivalry: The industry rivalry in banking industry of Bangladesh is very intense and
unfavourable (rated as 1).
The financial data and operating performance of the existing banks indicate that the market is largely
dominated by the existing banking network. The competition is fierce for lending to corporate clients
as well as attracting large deposits. The recent announcement of the Bankers' Association of Bangladesh
to reduce interest rates has also provoked competition. This has created an imbalance in the market as
some banks have reduced interest rates, commissions and want prices to be competitive. Also, there is
high competition from mobile financial service providers like bKash. Several banks are offering credit
facilities to the same group of corporate clients which hinders the profit of the bank. To resist
competition, SCB feels like a client, focusing on digital innovation to meet the needs of its corporate
clients, commercial clients, employee banking clients through value addition services and existing,
wealthy customer base cross-selling bank products.

7 Internal Analysis

7.1 SWOT Analysis

The table below shows the factors contributing to each components of SWOT Analysis for SCB.
The tool analysis is rated on a scale of 1(strongly unfavourable) to 5 (strongly favourable)
Table 5: SWOT Analysis

Strengths: Weaknesses:

A strong base of affluent customer base in corporate, commercial, Limited number of ATM booth. Limited
retail (employee banking) segments focus on SME segment.
NPL is moderately Comparatively lower compensation package for
low Capable and employees, resulting in increasing turnover.
efficient Team. Returns are dragged down by weak products which require
Very Strong capital base & access to low cost funds optimization.
globally Strong brand value.
Global recognition.
Deliver through Diverse global network in 63
markets Technological Innovation
Strong corporate governance.

18
Opportunities: Threats:

Rise of E Commerce & Mobile banking service provider all over
Bangladesh
Untapped market in Consumer and SME banking
segments. Covering non-conventional corporate
segments.
Local & Global expansion into new
markets Recovery of written-off and
classified loans
One of the fastest growing economy to support business growth
Possibility of new financial products in derivative markets
Entrance of 03 more new banks in the market, which might
result in a higher rate of employee turnover.
Potential chances of collapse by weak banks that might adversely
impact customer’s trust in banking sector Political instability.
Cyber crime
Regulatory fines due to sanctions

a) Strength: On a scale of 5, the strength factor for SCB is 5 (very favourable). This is
because, being a global bank, SCB has access to funds and can act as a facilitator in trade
banking to support growth of export and import oriented firms. SCB also has a strong
customer base that is profitable and generate high returns. Other factors such as strong capital
base, low non-performing loans, global presence allows SCB to reduce its cost of operations
by investing in disruptive technology. The cost structure of SCB is very low that competitor
fails to copy.
b) Weakness: SCB‟s weakness is attributed a rating of 3 (neutral). SCB targets the affluent
class that is highly concentrated in urban areas and has fewer branches due to regulations.
SCB is focusing on optimizing low return products such as titanium credit cards; solve a
smaller number of ATM problems by launching SCB Pay that act as ATM and CDM
simultaneously.
c) Opportunities: The opportunity of SCB is Bangladesh is very highly favourable (rated as
5). Bangladesh is forecasted to grow to 500 billion $ economy by 2023 and SCB aims to
earn highest franchise income from Bangladesh market by 2021 following the opportunities
of technological innovation, globalization, business growth prospects, changing customer
preference for new financial products that could hedge financial risks in trade banking,
foreign loan financing for firms engaged in international business.
d) Threats: The threat of SCB operating in Bangladesh is low and favourable (rated as 4).
SCB is well equipped fight cybercrimes, fight against anti-money laundering, corruption,
bribery and sanctions through well-established monitoring and risk management framework,
customer due diligence
policies etc. However, SCB is also keeping an eye on government actions to protect banking sectors
against collapse and upcoming, possible stricter regulations.

• Superior Value-Added Customer Service

• Diverse Global Networks to Facilitate International Business for Local Firms.
• Loyal, Affluent Customer Base in Retail, Corporate, Commercial Segments in Bangladesh.
• Strong Brand Image
• Compliance of the Central Bank and Other Regulatory Body
• Quality Human Resources and High-Performance Team
• Strong Corporate Governance
19
 • Innovative Financial Product
• Disruptive and Perpetual Technological Innovation in Banking Operations.

8 Overview of Current Competitive Business Strategy

8.1 Generic Competitive Strategy of Standard Chartered Bank

Standard Chartered Bank follows “Focused Differentiation Strategy” targeting only the affluent customer
base located in urban areas of Bangladesh, concentrating on global, multinational corporate house,
supranational organizations, large local companies in each segment such as corporate banking and
commercial banking where SCB maintains valuable relationship with financial institution and targets the
retail banking by focusing on its payroll customers (employee banking) of the corporate houses that
maintains banking relationship with SCB. SCB focuses on differentiating its products through value added
service with help of robust technology that enable SCB to think like client and allows SCB to capitalize by
cross selling of bank products that appeal to its customer and can be tailored to their needs. SCB also acts
as facilitator to grow client business and earn income through interest, fees and commissions. SCB also
engages in a portion of Small & Medium Enterprise (SME) lending.

9 Strategy of Operation
9.1 Offensive Strategies

SCB is operating in Bangladesh for more than 114 years. SCB has been the market leader for such a long
time as it has been a first mover in many instances. Some of the offensive strategies used by SCB as a fast
mover and facilitator of business are as follows:
• SCB was the first bank to issue a letter of credit in 1972.
• SCB was the first bank to enter into card business (debit and credit card) and set up the first ATM
in Bangladesh.
• SCB is the only settlement bank for Visa and Master card in Bangladesh that gives SCB an edge
in card business. SCB launched Co Brand card with Grameen Phone (GP) to access GP
customers.
• SCB is currently financing 30% of country’s power plant projects.
• SCB has helped Square Pharmaceutical to open a plant in Kenya in 2018 by acting as a facilitator
using its diverse network.
• SCB has been in charge of all the transactions during that took place when Japan Tobacco
acquired Akij Tobacco business.
• SCB has helped Akij to acquire particle business (Robin Resources and Robina flooring) in
Malaysia where SCB was the lead bank that handled the transaction involving $77 million (about
TK644 crore) in 2018.
• SCB helped to set up the first solar project in Bangladesh and import LNG gas from Qatar.

20
 • SCB is planning to introduce artificial machine learning in its operations (as a leapfrogging
technology) to reduce lead time and enhance its operational efficiency. This is in test phase but
once implemented will help to boost retail banking.

9.2 Defensive Strategies

Although SCB enjoys its pole position in the niche market, at times, in face of competition, it has to tighten
its defence mechanisms, such as rescheduling the customized pricing, offering banking perquisites to
customers so that they do not switch their businesses to rivals. Some of the defensive strategies that SCB
chose recently are as below:
• SCB has partnered with Bkash to gain access to Bkash Accounts through SCB‟s i-banking
platform. This is done to protect as a line of defence and respond to the rising mobile banking
demand of customers in the country instead of opening the mobile banking platform itself which
is costly.
• SCB is planning to launch SCB Pay that can act as ATM and CDM. This will help SCB to defend
against its rival DBBL that has largest ATM network in the country.
• SCB is moving to contactless card as a defence strategy

9.3 Blue Ocean Versus Red Ocean strategies

Though many banks in Bangladesh are in the red ocean fighting competition using standardized product
and price cuts, SCB is constantly seeking to penetrate the market with new innovative finance product by
creating a category. SCB was a pioneer in card business and is still the only settlement bank for Bangladesh.
This is something that competitor cannot copy. Also, being a facilitator, SCB can boost local businesses
through its diverse network and is in the blue ocean. However, in other areas SCB faces read ocean situation.

9.4 Diversification into Mix of Related and Unrelated Businesses

Standard Chartered Bank relies on related diversification of business and has expanded globally to 63
markets offering financial products that are suited and tailored to customer needs. The geographic
expansion and introduction of new products in fit with company’s strategy and market demand enable SCB
to manage its diversification. SCB offers private banking in other markets where it has industry
attractiveness, less costly and SCB is better off. However, SCB does not offer private banking in
Bangladesh.

9.5 Strategic Partnership & Outsourcing of SCB

SCB has acquired ANZ Grindlays bank in 2000 and Amex operations in 2006. SCB has strategic
partnership with both local and global vendors to ensure operational efficiency, productivity that also
allowed SCB to focus on core businesses of banking. SCB has relationship with vendors for contact point
verification, other bank statement verification, delivery of customer communication such as letters,
statement, credit cards/debit cards etc. SCB also maintains relationship with local vendors such as
Technomedia for card cheque issuance and Leads for local software development. SCB is planning to
outsource card production to save costs and gain efficiency.

9.6 Global Strategy of Standard Chartered Bank.

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SCB has international presence in 63 markets across ASEAN & South Asia, African & Middle East,
Europe & America, and Greater China & North Asia. SCB follows transnational global strategy i.e. Think
Global Act Local. SCB has a wide presence in global market offering global products but some of the
products‟ features are differentiated to cater local needs. SCB thinks and formulates plans by considering
the global context, following the best practices and follows both local and global rules and regulation by
adhering to the stricter measure.

10 Ethics, Corporate Culture, Code Of Conduct, Leadership And Corporate

Social Responsibility

10.1 Ethics & Code of Conduct of SCB

Standard Chartered Bank is committed to fair means of business and has zero tolerance for negligence
and breach to local and global regulations. The staffs are properly trained on code of conduct, customer
charter to treat customer fairly and adherence to local and global procedures through mandatory E
learning. The staffs are held accountable for their actions and any deviation to unethical practice would
lead to disciplinary action and termination depending on severity of the situation.

The code of conduct of SCB is as follows:

• Act responsibly and within authority. Understand the framework of applicable delegation of
authority and awareness of potential risk that may arise if framework is not followed.
• Use good judgment to support decision in difficult situation. Consult with line managers
and risk team.
• Speaking up to report any non-compliance to regulations and policies, report issues that
endanger environment or harm people and their wellbeing, report fraudulent activity and
unfair means.
• Comply with laws, regulations and Group standards
• Fight financial crime by being vigilant, adhere to policies and report suspicious activity
through proper channel.
• Reject bribery and corruption while doing business.
• Ensure fair outcomes for clients by thinking like client, through customer charter and treat
customer fairly.
• Manage conflict of interest between line manager, employees, superiors, peers and stakeholders.

10.2 Leadership & Corporate culture at SCB

SCB follows transformational leadership where employees are empowered by the leaders to do the right
thing and lead by example. The CEO Bill Winters has identified the need to change and has developed a
vision of turnaround to transformation with the help of Group MANCOM members. The vision is
guiding the change through inspiration, and executes the change with the commitment of the members of
the group.

The bank believes that training and knowledge sharing is the best way to reduce knowledge gap.
Therefore, it arranges trainings on a regular basis for its employees to develop their expertise. The bank
offers competitive pay package to its employees based on performance and merit. It always tries to
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develop a culture where all employees can apply his/her talent and knowledge to work for the
organization with high ethical standards in order to add more value to the company and for the economy.
Performances are evaluated through KPI on half yearly and full yearly basis through P3 program (Pay,
Performance and Potential). Some of the practices followed by SCB are:

• The bank has a strong commitment to the sustainable banking and to the welfare of the society
• The bank insists that its values and principles be reflected in the decisions and actions taken by
all of its employees
• The management of the Bank fosters a fair, enabling value based, ethical working atmosphere
and has an open-door policy.
• There is a heavy reliance on teamwork and open communication between managers and
employees; along with equal employment opportunity.

10.3 Corporate Social Responsibility of SCB

Some of the Corporate Social Responsibilities of Standard Chartered Bank is as below:
• Seeing is Believing: The flagship program tackles avoidable blindness globally, has touched the
lives of 150 million people by funding 160 eye care projects in under-privileged communities
globally since it began its journey in 2003. As of now, 62,943 cataract surgeries have been
successfully completed and 106,313 refraction services provided in Bangladesh. Eye check-up
facilities were provided to 1,139,597 beneficiaries and 5,920 eye-care providers trained.
• Financial Education for Youth program: the bank is committed to building financial
capability among school children with the view to influencing behavioral change and ingraining
financial responsibility from an early age.
• In 2016, Standard Chartered Bangladesh became the first international bank to begin working
with the communities, providing them with income generating vocational training in horticulture,
livestock rearing, ICT, financial education and so on, and in view of the absence of basic sanitation
services, latrine facilities. The work focused on improving the quality of life of the vulnerable
communities through promoting literacy, livelihood generation, better hygiene and financial
empowerment.

11 Recommendation & Conclusion

By analysing and evaluating the whole report it can be concluded that having an eagles eye view on the
current external and internal environment, SCB is doing well so far. This is evident from the financial
and market performance of the bank. However, SCB can utilize the full potential of the opportunities that
exists for SCB in Bangladesh by ensuring proper implementation of its strategy and priorities. Strategy
implementation is a continuous process and will require constant monitoring. In order to gain more
customers and retain existing ones, SCB need to focus on operational efficiency, effectiveness, eliminate
unwanted costs and focus on employee development and transformation of its customer centric model to
become agile.

Some of the recommendations for SCB are as below:

• Shift from focused differentiation to best cost provider: SCB needs to redesign its business
model and profit formula to support financial value innovative products at best cost that competitor
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 cannot match. This strategy will help to balance the concentration in retail, corporate and
commercial segment and increase bank’s scope of profitability in affluent customer base.
• Invest in technology to support banking application program interface, robotics and machine
learning: The greater flexibility provided by API technology means banks can quickly provide the
kind of product customization and experience customers expect. This depends on open
infrastructures and data feeds.
• Increasing Commission/Fee based income for driving Profit growth: SCB has to look into more
avenues increase various fee based non-funded incomes by increasing its trade financing
capabilities.
• Redesigning Credit Portfolio: Improving the top-line income by cautiously strengthening the loan
book by rebalancing the credit portfolio among Corporate, Commercial, Retail and SME segments.
• Lowering Cost of Deposit: Controlling cost of deposits by procuring low cost deposits through
increasing the current account concentration in the deposit franchise to supplement our net interest
margin.
• Recovery Drive: Recovering Non-performing assets including written-off loans will continue with
greater vigour to minimize provision charge against non-performing loans.
• Strengthening Employee Relations Activities for Employee Retention: Human Resource policy &
packages should be more employees oriented to retain the existing good employees, train them in
digital skills needed by bank in future as well as to attract new employee.

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 Appendix

1. Standard Chartered Bank Annual Report 2019 Retrieved from:

https://www.sc.com/en/investors/financial-results/annual-report/ [Last Accessed Feb 01,
2020]
2. Budget FY19: Corporate taxes reduced for banks and financial institutions Retrieved from:
https://www.dhakatribune.com/business/2018/06/07/budget-fy19-corporate-taxes-reduced-for-
banks-and-financial-institutions [Last Accessed May, 2019]
3. GDP Growth:
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=BD [Last Accessed May 18,
2020]
4. Trade data:
https://www.dhakatribune.com/business/2019/02/04/trade-deficit-narrows-by-11-in-first-half-of-
fy2018-19 [Last Accessed May 18, 2020]
5. BB: Monetary policy:
https://thefinancialexpress.com.bd/economy/bangladesh/bb-holds-on-to-cautious-monetary-
policy-stance-1548908268 [Last Accessed May 18, 2020]
6. Bangladesh to set export target of $39 billion for FY19 Retrieved from:
https://www.dhakatribune.com/business/2018/08/08/bangladesh-to-set-export-target-of-39-
billion-for-fy19 [Last Accessed May 18, 2020]
7. Bangladeshis will be richer than Indians by 2030: StanChart Retrieved from:
https://www.thedailystar.net/business/news/bangladeshis-will-be-richer-indians-2030-
stanchart-1743808 [Last Accessed May 18, 2020]
8. Standard Chartered: Here for good in Bangladesh Retrieved from:
https://www.thedailystar.net/business/banking/standard-chartered-here-good-bangladesh-
1537456 [Last Accessed May 18, 2020]