North South University

SBE, Department of Marketing and International Business

International Business

Course Code: INB372

Semester: Summer 2020

MIDTERM EXAM

Name: Mashiyat Binte Ahbab

ID: 1912518630 SL. Sec: 03

40

Faculty: ALK

 Date of submission: 10 August, 2020

th

Introduction: Standard Chartered Bank is a leading international bank group with operations in
consumer, corporate and institutional banking which consists of more than 80,000 employees
and a 150-year history in some of the world’s most dynamic markets, who’s headquartered in
London, England since 1969. In 1969, the name Standard Chartered was created from the names
of two banks that merged: The Chartered bank of Australia, India and China and Standard Bank
of British South Africa. As the banks decided to merge and to counterbalance their network by
expanding in Europe and the United States, they continued expansion in their traditional markets
in Asia and Africa as well. In the UAE, they opened their first branch in 1958 in Sharjah.
Afterwards, the business gradually grew in the UAE with the opening of several branches and
today, Dubai stands as the Bank’s regional hub for the Africa and Middle East region and is the
center for its Islamic Banking arm, Standard Chartered Saadiq. The Bank offers a full range of
banking services across all segments; in the retail and SME segments, the services include
deposit products, wealth management services, overdrafts, personal loans, credit cards, auto
financing, and mortgages. The services for corporate and institutional clients include trade
finance, cash management, lending, securities services, foreign exchange, debt capital markets
and corporate finance. Alongside, Standard Chartered Saadiq, the Islamic Banking division,
offers a comprehensive range of Shariah-compliant products and services.

2.   Market Analysis:

      i.       Globalization of market and Globalization of production- Standard Chartered Bank

acknowledges and promotes the benefits of globalisation more widely, as they
unquestionably outweigh its shortcomings. There is no doubt that globalisation has
contributed greatly to global growth and prosperity over the past five decades (Winters,
2019). According to WTO figures, rising demand in the global trade of goods and services
averaged 6.2 per cent per annum. Globalisation has helped to lift over 1 billion people out
of extreme poverty over the past two decades – UAE is a shining example – through the
expansion of cross-border trade and investment links and more enlightened economic
policies pursued by emerging and developing nations(Pantanacce, 2020). UAE  saw
income growth of over 35 per cent. Standard Chartered took emerging opportunities to
deepen existing client relationships. The growth of the Islamic Banking franchise in the
region is one such example, which witnessed revenues rise to 83 percent. Bringing
modern lifestyle banking to a growing customer base, Standard Chartered opened a
spacious flagship Financial Centre in Abu Dhabi, boasting a dedicated Saadiq Islamic
Banking Centre, a Priority Banking Centre, and a SME team. By focusing on building
great leaders and engaging their employees, Standard Chartered Bank continues to drive
performance.  For example, Standard Chartered bank recently introduced the advances in
automation technologies, including artificial intelligence and autonomous systems and
robotics, which will have a profound impact on the global workplace.
 
 
 
    ii.       Political environment- Political risks tends to be higher in countries experiencing
social unrest which is  usually expressed through strikes, demonstrations, terrorism and
violent conflict. Political factors play a significant role in determining the factors that can
impact Standard Chartered Bank’s long term profitability in a certain country or market.
However, the UAE has one of the most stable political systems in the wider Arab region. 
Even though the political system is inflexible and characterized by an almost complete
 lack of political freedom, there have been no reports of imminent upheaval. The economic
and social factors that have contributed to the unrest elsewhere in the region are less
pronounced in the UAE, which makes it good for the company, Standard Chartered Bank.
With more than 80% of the labor force consisting of expatriates, the country’s small
national population enjoys a high living standard in a relatively open and tolerant society.
The number of crime occurrences and terrorism is quite low, which helps Standard
Chartered Bank to get rid of any sort of political instability. 
 
   iii.       Economic environment- An economic mismanagement can adversely affect profit and
other goals of business. The UAE has an open economy with a high per capita income and
a sizable annual trade surplus. Standard Chartered Bank works with clients to deliver
sustainable economic growth through the finance they provide. The bank mobilised $20.8
billion for infrastructure development, including $2.9 billion towards clean technology,
and helped our clients issue $9.1 billion in green bonds (Philippe, 2019). The economic
outlook remains expansionary in the foreseeable future to support the diversification
program, which will continue to have a positive impact on the bankr as the backbone of
the economy. Standard Chartered Bank uses the country's economic factors such as
growth rate, inflation & industry’s economic indicators such as banks industry growth
rate, consumer spending etc to forecast the growth trajectory of the organization.
However, the UAE Standard Chartered Bank’s profitability suffered in 2009 as the global
economic crisis impacted the region more significantly and year-on-year comparatives.
 
   iv.       Legal environment- Legal risk means the likelihood that a trading partner will
opportunistically break a contract or expropriate property rights. If the legal system of a
country is strong, the cost of doing business will be more. Although the core principles of
law in the UAE are drawn from Sharia, most legislation is a mix of Islamic and European
concepts of civil law, which have a common root in the Egyptian legal code established in
the late 19th to 20th centuries. The country is well known for its fair and efficient legal
system, which makes it one of the best countries in the region to operate for Standard
Chartered Bank. The government supports and regulates the economy as market-based
and open. Consumer courts and consumer laws are strict to prevent consumer crime and to
provide consumer protection. The UAE government has adopted some special laws and
measures to monitor the competition and to prevent the corporations from being
monopolies.The UAE government also follows the consumer protection directives which
are very strict and consumer friendly. The UAE legal environment drives Standard
Chartered Bank  towards efficiency and performance with indirect legal pressures (BBC
News, 2016).
 

 
 
     v.       Cultural environment-  Society’s culture and way of doing things impact the culture
of an organization in an environment. The UAE has a rich culture and heritage that
reflects traditional Arab and Islamic values. A study of banks in the UAE reflects how the
 Islamic culture of philanthropy has influenced corporate responsibility practices in the
Emirates. What sets the Standard Chartered Bank apart is their diversity of people,
cultures and networks. As the economies in their core markets grow, so does the need for
sophisticated financial services. The bank believes it’s crucial to help customers adhere to
global standards of conduct and compliance. They aim to support sustainable economic
and social development wherever they operate. The bank is committed to promoting
equality in the workplace and creating an inclusive and flexible culture where everyone
can realise their full potential and make a positive contribution to our organisation. 
According to Hofstede's dimension, collectivist societies belong to groups that take care of
them in exchange for loyalty. The UAE with a score of 25 is considered a collectivistic
society.In societies where collectivism is emphasized, ties between individuals are tight,
people live in extended families and everyone looks after each other.
 
 
 
 
 
 
 
 
  vi.      Conclusion-  In such a competitive market of UAE, it is vital for Standard
Chartered Bank to understand how customers and market sectors contribute towards
profitability, and to what extent relationships with particular customers are profitable.
More focus on client satisfaction, quality of service and innovation in products offered,
will lead to the creation of new categories of interest income, charges, commissions and
possibly profit. Standard Chartered Bank will continue to work with both public and
private sectors to tackle the challenges of globalisation and technological disruption head-
on. Political leaders have a responsibility to implement inclusive social and economic
policies. The Standard Chartered Bank thinks the private sector must do its part in
contributing to sustainable economic growth by acting responsibly and investing in the
communities it serves. It is in all their interests to ensure that everyone reaps the many
tangible benefits of globalisation.

     Reference: 
 
1. We can make globalisation work. (2018, September 6). Insights. Retrieved From The
Standard Chartered website http:/www.sc.com/en/explore -our-world
2. Risk management services. (2015, November 2). Business. Retrieved From The Standard
Chartered website http:/www.sc.com/cn/business/risk-management-services
3. Matabal, A. (2013). Country report : UAE. Retrieved From the RaboResearch -
Economic research website : http:/www.economics.rabobank.com
4. Rees, M. (2009, August). Wholesale Banking. SC Annual business report, 30 (4) , 45-51.
5. Belt and Road outlook. (2019, March 23). Insights. Retrieved From The Standard
Chartered website : http:/www.sc.com/en/feature/br-outlook
 6. Kamal, A. (2015, November 3). Standard Chartered shares sink on shock quarterly loss.
BBC news, p.B2.