SWOT Analysis of Commonwealth Bank of Australia

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Commonwealth Bank of Australia – SWOT Analysis

Commonwealth Bank of Australia – Strengths
Strength – Commonwealth Bank Brand
Commonwealth Bank brand is the most recognised brand in Australian financial services industry. It is a brand that has evolved over its 102 years of operation with a strong brand history. Commonwealth Bank brand is highly regarded and trusted within the Australian financial services industry. Other well known brands under the Commonwealth Bank Group includes Colonial First State, CommInsure, ASB (New Zealand), Sovereign, FirstChoice, CommSec, and Bankwest.

Strength – Scale
Commonwealth Bank has a strong presence in Australian financial services industry and has the largest customer base of any Australian bank. Commonwealth bank is the main financial institution for more than 33% of Australians who are 14 years of age or above. It provides products and services to every day Australians, corporations, government entities and other major institutions operating in Australasia. Commonwealth Bank have businesses globally in New Zealand, Europe and the Asia-Pacific region. As of January 2008 Commonwealth bank is the second largest Australian listed company on the Australian Securities Exchange. Strength – Diversified business mix

Commonwealth Bank holds diversified business mix by providing integrated financial products and services through retail banking, premium banking, business banking, institutional banking, fund management, superannuation, insurance and stockbroking. Strength – High Customer Satisfaction

According to the latest Roy Morgan “Main Financial Institution Customer Satisfaction” survey in April 2013, 82.6% of Commonwealth bank’s customers are satisfied with the banks products and services. Based on Roy Morgan survey Commonwealth Bank currently hold the number 1 position for customer satisfaction among the big four major banks operating in Australia.

Commonwealth Bank of Australia – Weaknesses
Weakness – Weak Global Presence
Compared to other globally recognised banks such as HSBC and Citibank, Commonwealth bank has weak global presence. Weakness – Decline in revenue from lending products
The lending and the deposit markets in Australia are very competitive. As a consequence, it has lost a considerable market share as seen in December 2012 half yearly results. especially in the home loan, business loan, retail deposit andcredit card business. Commonwealth Bank of Australia – Opportunities

Opportunities – Expand Globally
Commonwealth bank has growing international presence through Retail Banks in New Zealand and Indonesia, Banking investments in China and Vietnam, representative offices in Beijing and Hanoi as well as banking branches in London, New York, Tokyo, Hong Kong, Shanghai, Singapore, Auckland, Ho Chi Minh City and Mumbai. The bank has opportunities to further expand its Global operations, especially in the Asia-Pacific Region. Opportunities – Grow Stockbroking Services

Reserve Bank of Australia’s decision to reduce official cash rate to 2.75% means fix income assets such as term deposits and government bonds will become less attractive for investors. This is likely to increase trading in the stock market as inventors turn to the stock market in order to find opportunities to get ahead of the market. This provides Commonwealth Bank Group with opportunities to grow and expand its stockbroking services. Commonwealth Bank of Australia – Threats

Threats – Uncertainty in Global Markets
Four years after the global financial crisis, the global economy continues to be volatile. The impact of uncertainty in the global markets has created a challenging operating environment in the Australian banking sector, with lower consumer confidence, higher savings rates, lower demand for credit, lower discretionary spending and weaker equity markets. All these operating conditions combined is likely to create lower revenue and profit growth for Commonwealth Bank of...
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