SBI SWOT Analysis

Threat
Deregulation of Saving Bank Rate As RBI had deregulated saving bank rate because of these private sector bank has increased saving bank rate, so customer will be more attracted towards private bank. External factor High fuel price, power prices etc. are also hurting SBI, since the banks lend to all segments, this will effect SBI. The point is, in context with huge lending to kingfisher where SBI was the biggest lender. Increased Competition from Private bank Customer prefer to switch to private banks and financial service providers for loans and mortgages, as SBI involves strict verification procedure and take long time for processing. The scenario is opposite in case of private bank, private bank has better management and faster processing times than SBI. Their DSAs have strict sales target every month and hence move faster to improve their performance. SBI employees are not bothered about this. The way private banks deals with their customer has made banking easier and less torturous. Instead of customer standing in queues at banks, the private banks started service to the customer at their doorsteps. According to Kotak securities, Private bank saw a rise in their market share from 14.9% to 17.8%.Their share in overall saving accounts increases from 11% in 2005 to 16% in 2011. Employee Strike In 2006 April there was a 7 days strike costs huge loss for SBI. (Rs. 55000 crore loss in MP, Chattisgarh) strike was because of pension hike. During that time the government of U.P has transferred its account to Allahabad bank, while Government of Maharastra was also in the process to do so. Venturing into Rural and Semi-Urban sector Private bank has started venturing into rural and semi urban sector which used to be the bastion of the SBI and other PSU banks. According to RBI data, in 2012 no. of SBI branches increased by 4.9% whereas total no. of bank branches increases by 6.6% in rural area. In case semi-urban, SBI branches increased by 3.44% whereas total no. branches increased by 11.11%.

SBI SWOT Analysis

Weakness
-Private Banks came with a great advantage from day one as they had core banking unlike SBI or public sector bank. Whereas SBI had to transform their system into core banking for this new skilled man power will be required. - SBI has the highest Non-Performing Asset or NPA in the Industry. SBIs NPA constitute one third of gross NPA of all listed banks put together. - In spite of modernization bank still carries the perception of traditional bank to new age customer. -Based on RBI data a research was conducted by ________________ to find the multiple decision-making units efficiency point which was published in mbaskool.com. Following factor were considered to find the multiple decision-making units efficiency point Where SBI ranks 4th, Yes bank got the 1st position.

RBI has the largest no. of employee in the industry (more than 2lakh).Bank spends huge portion of income on employee wages & salaries. Their wages accounted for 18.86% of the banks total expenses. While the industry average was 14.83% during 2009-2010. Business per employee of SBI is 6.36 crore against industry average of Rs. 8.373. In contrast, business per employee of ICICI bank stood at 10.29 crore, while Axis Banks 11.11 crore HSBC banks 11.35 crore and Citi banks per employee contribution was 19.7 crore during 2009-2010.

Opportunities

SBI SWOT Analysis

-Merger with five banks namely State bank of Hyderabad, state bank of Patiala, State bank of Bikaber as Jaipur , state bank of Travancore and state bank of Mysore are in approval stage. Merger will result in expansion of market share to defend its no. one position. As SBP posted 87% growth in profit SBBJs profit groth is 311% while SBT & SBH 30% nd 18% respectively. Moreover 5 associates banks has 6% market share in loans & deposits etc. - Since the bank is yet to modernize few of its banking operations, there is a better scope of using advanced technologies and software to improve. - SBI attracts most talented pool of graduates in the industry, for 2013 PO exams 17 Insurance lakh student appeared. So chances are high that they will offer better customer service in innovative way. -Recently Government allowed insurance company to use banks distribution channel, because of its vast distribution SBI can attract most of the insurance company and service will not free of cost so new way of revenue generation. -Good inflow from overseas operation: SBI has 150 offices in 32 countries which contribute 14-15% in net profit.

Strength
Wide distribution Network SBI has more than 27000 ATM and SBI group i.e. including associate banks has about 45,000 ATM whereas total no. of ATM as on October are 104500. As on June 2012,SBI has 14127 branches and SBI group i.e. including SBI associates banks 21,500 branches as on March 2012 where total no. of bank branches in India are 90732 . SBI has become the first bank to install an ATM at Drass in the Jammu & Kashmir Kargil region. Market leader SBI has 20% market share in deposits and loans among Indian commercial banks. SBI controls 22.35% in business as on RBI. SBI life stood at the no. 1 position with a market share of 19.8% in private insurance business as of May 2011. Government owned: Government owns 60% stake in SBI, this gives SBI an edge over private banks in terms of customer security. They are automatically immune from failure because they have access to Central Government support.

SBI SWOT Analysis

SBI has the first mover advantage in commercial banking service: SBI has started its operation in very early stage. It acquire customer when there was very less competition or no competition. Brand Name: SBI bank has earned a reputation in the market over the period of time.