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Assessment 1 International Finance

Vikas Gurudev, ID NO: 11010560


2 . Comparing Strategies of Two Companies.Content: Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Introduction. References. Advantages and Disadvantages of Strategies. Conclusions. Company’s Information and Strategy.

as these changes significantly affect the ability bank to achieve sufficient high profitability and ability to stand in financial disturbance.com/Home). the potential for a below target return. Where we can know company’s information and strategy they use for their sustainability. 1999).Introduction: The financial market and the financial institutions are facing structural changes due to deregulation. Barclays is a major global financial services provider engaged in retail banking. As a responsible global citizen. (2004) Returns on international equities are characterized by jumps moreover. and strives for sustainable relationships with customers and clients worldwide. Investment management requires to share their general definition of investment risk to the managers and clients. U. Barclays is committed to ensuring the sustainability of the communities in which the business operates.Since the business was established more than 300 years ago.barclays. and the perceived level of knowledge (Olsen. as bank provide deposits and loans they also have a key role in two main sectors of financial system. Barclays provides financial services to more than 48 million customers in over 50 countries worldwide (http://group. these jumps tend to occur at the same time across countries. R. According to Sanjiv. the feeling of contra. implying that conditional correlations between international equity returns tend to be higher in periods of high market volatility or following large downside moves. Below are the examples of two banks Barclays and Standard Chartered. that is the potential for large loss. Company's Information and Strategy: Barclays . by this we can come to know what are the advantages and disadvantage of their strategy and will discuss about external factors. and technological development. Investment risk and risk in other deception making is a function of four attributes. credit 3 . that is converting saving into investment and allocating the risk (Lilja. Barclays has grown to offer a range of products and services tailored to meet the specific needs of its customers all over the world. and Raman. internationalization. 1997).

barclays. and Corporate and Investment Banking and Wealth Management. and they will continue to create internally any additional capital that they will be required to hold to meet regulatory change over the coming years.com/Home). corporate and investment banking and wealth management with an extensive international presence in Europe. the Bank signed a four-year sponsorship with Liverpool Football 4 . With over 300 years of history and expertise in banking. Barclays moves.000 people.cards. Barclays structure . and the Chief Executive is Bob Diamond. and they adjusted return on equity improved to 8. lends. Standard Chartered is regulated by the UK FSA and is one of the UK’s largest banks.com/Home). Barclays leadership . These results demonstrate that their efforts are starting to pay off. Its headquarters are based at 1 Basinghall Avenue. In September 2009. the Americas. but they acknowledge there is still more hard work required. In additional to the many Group functions based in the UK. Barclays Group headquarters is at 1 Churchill Place in London.barclays. And Barclays income growth have already taken decisive action in order to improve performance. London.barclays. It has been listed on the London Stock Exchange since 1969 and is currently a top 20 FTSE company and among the top five largest banks by market capitalization.Barclays Group Chairman is Marcus Agius.com/Home) According to Barclays ((http://group.Barclays is made up of two ‘Clusters’: Retail and Business Banking. It also hosts significant Private Banking and International Banking operations.5 per cent at the end of September 2010). Regarding returns Barclays commitment is to deliver a 13% return on equity by 2013. each of which has a number of Business Units (http://group. UK (http://group. They are supported by Barclays Executive Committee and the Board of Directors. Standard Chartered .com/Home) Core Tier 1 ratio (capital) stood at 11 per cent at the end of September 2011. and both the CEO and Chairman situated here.barclays. London is a global financial center and a key hub for Standard Chartered’s Wholesale Banking business.It has a history of over 150 years in the UK. Barclays operates in over 50 countries and employs over 140. Africa and Asia. invests and protects money for customers and clients worldwide (http://group.1 per cent at the end of September 2011 (from 6.

rice from Burma.com). together with the Ionian Bank's Cyprus Branches and established a presence in the Gulf. tobacco from Sumatra. The bank played a major role in the development of trade with the East following the opening of the Suez Canal in 1869 and the extension of the telegraph to China in 1871. The Standard Bank The Standard Bank was founded in the Cape Province of South Africa in 1862 by John Paterson. The traditional trade was in cotton from Mumbai. Central and Eastern Africa and had 600 offices by 1953. expanding its operations into Cameroon. In 1965. leading the way in Asia. Ghana. followed by Hong Kong and Singapore in 1859. sugar from Java. The bank was prominent in financing the development of the diamond fields of Kimberley from 1867. Asia and Africa. it merged with the Bank of West Africa. 5 . Gambia. Listed on the London. and started business in Port Elizabeth in the following year. The Chartered Bank The Chartered Bank was founded by James Wilson following the grant of a Royal Charter by Queen Victoria in 1853. hemp from Manila and silk from Yokohama. Standard Chartered aspire to be the world's best international bank. the Standard Bank of British South Africa and the Chartered Bank of India. indigo and tea from Kolkata. Africa and the Middle East they are focusing on building deep and longstanding relationships with their clients and customers and constantly looking to improve the quality of their products and services. In the last eight years Standard Chartered have reported record income and profits.com). Australia and China.standardchartered.Club starting from the 2010/11 season (http://www. 15 over $100 million in profit. 23 of their markets now deliver over US$100 million of income. It later extended its network further north to the new town of Johannesburg when gold was discovered there in 1885. Standard Chartered Bank was formed in 1969 through the merger of two separate banks. Nigeria and Sierra Leone (http://www. In 1957 Chartered Bank bought the Eastern Bank. The bank opened in Mumbai (Bombay). The bank expanded in Southern.standardchartered. These banks had capitalized on the expansion of trade between Europe. Kolkata and Shanghai in 1858.

enable multinational clients to conduct complex business transactions and service the needs of an increasingly international consumer base (http://www.Hong Kong and Mumbai stock exchanges.barclaysannualreports.com/ar2010/files/Annual_Report_2010. Standard Chartered rank among the top 20 companies in the FTSE-100 by market capitalization. Through Standard Chartered international network and expertise. (http://www.standardchartered. And below graph show the performance highlights from year 2008-2010.pdf) Whereas on the other hand according to Standard Chartered annual report the company has invested more in 2010 compare to 2009.balancing the pursuit of growth with a disciplined management of costs and risks and keeping a firm grip on liquidity and capital. they facilitate trade across markets. 6 . And the below chart show the key financial indicators from year 2006-2010. Comparing strategies of two companies: Investment made by Barclays in 2010 was higher than 2009. As they say their success is a result of being obsessed with the basics of banking .com).

total leverage. while establishing strong and independent review and challenge structures.(http://www. *To formulate the Group’s Risk Appetite and ensure that business profile and plans are consistent with it. 7 . countercyclical buffer. liquidity and funding which will help to avoid operational risk of the company. Both the companies have developed future risk management strategies which include capital and liquid aspects such as risk weighting. through core risk management processes. *To ensure that business growth plans are properly supported by effective risk infrastructure. Barclays has clear risk management objectives and a well-established strategy to deliver them. their risk management objectives are: *To identify the Group’s significant risks. minimum ratio. quality of capital. Advantages and Disadvantages of Strategy: In the case of Barclays bank. At a strategic level.pdf) As the graph shows both the companies are in profit from year to year.com/en/resources/globalen/pdf/Media_Pack_2011.standardchartered. *To optimize risk/return decisions by taking them as closely as possible to the business. company use forbearance as an instrument in their risk management strategy by this they have a close look on customers business and in which company they invest. *To manage risk profile to ensure that specific financial deliverables remain possible under a range of adverse business conditions.

standardchartered. with the objective of maximizing riskadjusted returns while remaining within their risk appetite. One of the main risks Standard Chartered incur arises from extending credit to customers through their trading and lending operations.asp?pageid=102). pension. *Accountability: risk is taken only within agreed authorities and where there is appropriate infrastructure and resource. *Competitive advantage: Standard Chartered seek to achieve competitive advantage through efficient and effective risk management and control (http://annualreport. After have all these strategies also Barclays acknowledge there is still more hard work required (http://group. As part of this framework. reputational and other risks that are inherent to their strategy. Through their risk management framework they manage enterprise-wide risks.barclaysannualreport. product range and geographical coverage. All risk-taking must be transparent. *Anticipation: Standard Chartered seek to anticipate future risks and ensure awareness of all known risks. in line with their strategy and within their risk appetite. They take account of their social responsibilities and their commitments to customers in taking risk to produce a return.com/business-review/operating-and-financial8 . controlled and reported.com). *Responsibility: it is the responsibility of all employees to ensure that risk-taking is disciplined and focused. operational. As in the case of Standard Chartered The management of risk lies at the heart of Standard Chartered’s business.*To help executives improve the control and co-ordination of risk taking across the business (http://www. Risk management framework According to Standard Chartered Effective risk management is fundamental to being able to generate profits consistently and sustainably and is thus a central part of the financial and operational management of the Group.barclays. Beyond credit risk. they use a set of principles that describe the risk management culture they wish to sustain: *Balancing risk and return: risk is taken in support of the requirements of their stakeholders. market. they are also exposed to a range of other risk types such as country cross-border.com/ar2010/index. liquidity.

Peck. Maybe forbearance program in their strategy helped Barclays to achieve good return in 2009-2010.review/risk-review/risk-management. H (2005) found that efforts to improve performance against one measure (e. So it is important for organization to undertake risk management activities. as in the case of Barclays company is using forbearance program in their strategy which keeps a close look on other companies investment. 9 . C. Risk Management is inherently a process of balancing potential risks against potential rewards to achieve favorable outcomes in terms of aggregate business performance (Ritchie. B and Brindley. The study demonstrate that both the banks Barclays and Standard Chartered have introduced risk management strategies which have very positive points. As in the case of Standard Chartered they have adapted Risk management framework through their risk management framework they manage enterprise-wide risks. total asset. net asset of year 2009-2010. From the above study we come to know that both the banks are in profit but Barclays have achieved good return than Standard Chartered when it comes to PBT. C. 2007). cost or quality) often inadvertently reduced performance and increased risk associated with one or more of the others. retailing and services sectors. with the objective of maximizing risk-adjusted returns while remaining within their risk appetite.g. Conclusion: Risk and Risk Management have become dominant features of the lexicon of today's management. In other hand Standard Chartered may need to modify their risk management framework to achieve more return in future. 2007).html). Supply chain risk and its management are by no means novel problems for the manufacturing. Managers are continuously being challenged to address an increasing variety of opportunities and risks at both the routine operational and the more novel strategic levels (Ritchie. B and Brindley.

4. 12.asp?pageid=102. 58. http://www. C.barclaysannualreport.standardchartered. Ritchie.barclays. pp 62-66. http://annualreport. 35.pdf. http://www. Olsen. Sveriges risk bank economic review. 2.com/business-review/operating-and-financialreview/risk-review/risk-management.standardchartered. (2004) Systematic risk and international portfolio choice. U.com/ar2010/index.com/Home. Sanjiv. R.barclaysannualreports. Int J Phys Distrib Logist Mngt.pdf. pp 2809-2834. R. http://www.com. (1999) Structural changes in banking sector-driving force and consequences. 23-2-12. Financial analysis journal. B and Brindley.html. The journal of finance. Peck H (2005).Reference: Lilja. 11. (1997) Investment risk: The expert's prospective. http://group. http://www.com/ar2010/files/Annual_Report_2010. pp 210-232. pp 43-63.standardchartered. (2007) Risk Based Methods for Supply Chain Planning and Management. 6. 23-12-12. The Journal of the Operational Research Society. 23-2- 10 . 4. 53. 24-2-12. and Raman. 59. Drivers of supply chain vulnerability: An integrated framework. R.com/en/resources/global-en/pdf/Media_Pack_2011. 24-2-12. 23-2-12. pp 13981411.

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