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National Australia Bank (NAB) SWOT & PESTLE Analysis

ID : 5265553| Jun 2018

COMPANY PROFILE -National Australia Bank (NAB)

Business Sector :Banking and Financial Services

Operating Geography :Australia & NZ, Global

About National Australia Bank (NAB) :

The National Australia Bank (NAB) is one of the 'Big Four' Australian banks which was established in 1982 and is headquartered in Melbourne. It has close to 1,600 branches and service centres across Australia and New Zealand and has over 35,000 employees as of 2016.

National Australia Bank (NAB) Revenue :

AU $ 17.43 billion (FY Ending 30th Sept, 2016)

Competitive Analysis of National Australia Bank (NAB)

SWOT
PESTLE
The SWOT Analysis for National Australia Bank is given below:
Strengths
Weaknesses
1. NAB's strong capital, liquidity and funding position to strengthen the lending business
2. Largest bank in Australia in terms of sheer assets and size with a strong brand name
3. Strong profile in business banking in UK and Australia with diverse offering of products and services
4. Expertise in CRM with rollout of NAB view to strengthen customer relationships
1. Online system outages due to technical issues which inconvenienced customers
2. Recent NAB's internal audit report highlighted major issues in operational risk management practices
Opportunities
Threats
1. Collaboration by NAB and Visa in payments innovation area to help roll out innovative products and solutions
2. Huge expansion potential for NAB in the lucrative Chinese markets after formation of China-Australia Free Trade Agreement
1. Competitors have deeply focused in consolidating their portfolios and expanding across countries
2. Volatility of markets increases risks with factors like Brexit and policy of new U.S. administration
3. Realization of delayed returns from the technology investments
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Detailed SWOT Analysis of National Australia Bank (NAB)

Strength

1. NAB’s strong capital, liquidity and funding position to strengthen the lending business: Maintenance of a strong credit position will help NAB develop its lending business further. Further NAB renewed focus on its core business lines which produce higher returns with the demerger of its UK unit, CYBG plc (Clydesdale and Yorkshire Banking Group). It also sold off 80% of its stake in the NAB Wealth’s life insurance business.

2. Largest bank in Australia in terms of sheer assets and size with a strong brand name: Largest bank in Australia in terms of sheer assets and size. This also gives it the standing amongst the top 4 banks in Australia. As such its base of operations extends across the seas and they have been operating in the United Kingdom as well as in some markets of Asia. Because of the diverse portfolio and activities, the company has a standing of high credibility and diverse profile among customers.

NAB’s strong brand name gives it an opportunity to charge higher prices for the products since consumers place an extra value in the brand. The faith in them can be seen from the fact that about 28% of the companies operating take loans from them. Having a better track record than all their competitors in the area, the company enjoys the faith of its investors as can be seen from them having reported better earnings than the industry average for the 20th consecutive quarter.

3. Strong profile in business banking in UK and Australia with diverse offering of products and services: Bank is consolidating its focus on Australia and New Zealand. It is systematically phasing out its operation in the UK so that it can focus on core banking services in its own home domain. This would make for a wise decision granted that the company occupies about 74-75% of a revenue share in Australia and has considerable asset management capabilities in both corporate as well as retail banking in Australia.

4. Expertise in CRM with rollout of NAB View to strengthen customer relationships: NAB completed Oracle customer master rollout which would help its staff to view entire customer relationships on a single dashboard. The systems also help NAB play an important role in lending and investing in the small and large businesses, industries, infrastructure projects and not-for-profit organisations that help the communities to prosper.

Weakness

This section is available in the 'Complete Report' on purchase.

Opportunity

This section is available in the 'Complete Report' on purchase.

Threat

1. Competitors have deeply focused in consolidating their portfolios and expanding across countries: Major competitors have an advantage of marketing in a more relevant and targeted fashion than NAB. They have rightly judged that corporate market is poised to grow at a rate faster than most of the other markets. For example, when BNP Paribas cut their interest rates by 20 basis points, and extended the benefits to both existing and future customers, they were poised to eat into a sizeable chunk of the market share from everyone. It is moves like these that could lose NAB the race. Since the bank works in the international markets, the competition is that much more difficult. Its major competitors like BNP Paribas, Citigroup ,Standard Chartered and HSBC to name a few are deeply focused in consolidating their portfolios and expanding across countries, NAB must either expand into such countries and markets by buying out and absorbing established firms or by investing money in growing faster to do the same.

2. Volatility of markets increases risks with factors like Brexit and policy of new U.S. administration: The volatility of the markets become a matter of concern for all the sectors in which the bank operates. The risk increases exponentially since there are multiple domains in which they work across a multitude of countries. So the largest risk that the bank has to tread with caution in is that different markets fluctuate based on different parameters in different countries or in different economic conditions, especially now as Brexit has materialized and economic policies of new U.S. administration still uncertain. Due to this, the bank must be willing to bear the losses to maintain face and business. Unless they can do this, it would become quite difficult for them to hold credibility. Also, they must be able to anticipate such trends easily.

3. Realization of delayed returns from the technology investments: NAB had heavily invested in technology over the last five years from 2012 to 2016, however the results have been mixed and it had to book a significant impairment charge after an internal audit of its technology transformation program. NAB has scaled back its transformation roadmap and will go for piecemeal roll out of systems and solutions after careful considerations of the returns on investment (ROI) of the same. The immediate focus for NAB is to focus on customer centric technology which brings immediate returns and delay changes in back-end legacy systems to a later date.

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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in National Australia Bank (NAB) Analysis Report
1. National Australia Bank apologises to customers amid online banking outage: http://www.smh.com.au/business/banking-and-finance/national-australia-bank-apologises-to-customers-amid-online-banking-outage-20161004-gruvvt.html

2. NAB completes Oracle customer master rollout - Software – iTnews: https://www.itnews.com.au/news/nab-completes-oracle-customer-master-rollout-404446

3. NAB online banking restored after another systems outage: http://www.abc.net.au/news/2016-10-11/third-nab-systems-outage-in-a-week-internet-banking-offline/7921920

4. NAB unveils Android mobile payment service: http://www.computerworld.com.au/article/592705/nab-unveils-android-mobile-payment-service/

5. The Huge Chinese Opportunity Presenting Itself to Australia: https://www.nab.com.au/business-asia/expert-guidance/industry-insights/china/the-huge-chinese-opportunity-presenting-itself-to-Australia

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National Australia Bank SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting.

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National Australia Bank (NAB) SWOT & PESTLE Analysis
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