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Resource Integration Team Presentation ENG7141

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 Overview of the UK Banking Industry
Overview of UK Financial Services Industry 2010-2020:
 The UK financial services industry employs more than 1.1 million people across
the UK, two-thirds of whom are based outside London. Financial services account
for 3.1% of all UK jobs. (UK Finance, 2019)
 The financial services sector contributed £132 billion to the UK economy in 2018.
This accounted for 6.9 per cent of total economic output. (House of Commons
Library, 2021)
 In 2017 exports of UK financial services reached just under £60 billion, while
imports of financial services to the UK stood at just over £15 billion. The surplus
in financial services trade therefore was £44 billion. The UK has seen a trade
surplus in financial services in each of the last 10 years. (House of Commons
Briefing Paper, 2017)
 Even though the UK economy is developed, between the years 2017-2018 the
UK’s Foreign Direct Investment (FDI) placed 3rd when considering investment
inflows. In 2017, $101 billion was invested into the UK financial services and in
2018 $122 billion was invested, thus showing a 21% increase in FDI. (Office for
National Statistics, 2021)
Source: 2021 UK Banks Market Share
(Economicsonline, 2020)
 PESTLE Analysis of the Banking
Industry
Political Economical Social Technological Legal Environmental

 BREXIT (Marketing  Interest rates  Attitudes toward  Chip changes for  Discrimination law  Mobile banking is
Tutor, 2021) (Frue, 2017) saving and investing debt cards (Frue, 2017) reducing the use of
 Trade restrictions  Exchange rates (Frue, 2017)  Virtual meetings  Copyright law (Frue, paper (Marketing
(Marketing Tutor, 2021) (Marketing Tutor,  Population growth  Computer calculation 2017) Tutor, 2021)
 Tariffs (Frue, 2017) 2021) rate (Marketing speed/power  Health and Safety law  Reduced carbon
 Political stability  Recession (Frue, Tutor, 2021)  Automation (Frue, (Frue, 2017) footprint as
(Marketing Tutor, 2021) 2017)  Age distribution and 2017)  Employment law customers do not
 Corruption (Frue, 2017)  Inflation life expectancy rates  Internet connectivity (Frue, 2017) need to travel to the
 Regulation and  Taxes (Frue, 2017) (Frue, 2017)  Security in  Fraud law (Frue, banks (Marketing
deregulation(Marketing  Demand / Supply  Attitudes toward cryptography 2017) Tutor, 2021)
Tutor, 2021) (Frue, 2017) customer service and (Marketing Tutor,  Renewable energy is
 Data protection law product quality 2021) reducing energy
(Frue, 2017) (Marketing Tutor,  Innovation for online consumption (Frue,
 Government 2021) banking (Marketing 2017)
involvement in trade  Average disposable Tutor, 2021)
unions and agreements income level (Frue,
(Marketing Tutor, 2021) 2017)
 Overview of the Banks
 Established on the 1st July 1880 (RFI,
2022)
 Net Income: $5.23 billion (2020)
(RFI, 2022)
 Total Assets: $2.96 trillion (2020)
(RFI, 2022)
 511 bank branches operating in the
UK (RFI, 2022)
 Approximately 85,000 employees in
the UK (RFI, 2022)
 Established in 1690 (Statista, 2021)
 Net Income: $2.38 billion (2020)
(Statista, 2021)
 Total Assets: $1.38 trillion (2020)
(Statista, 2021)
 1600 bank branches operating in
the UK (Statista, 2021)
 Approximately 47,200 employees in
the UK (Statista, 2021)
 Why Compare them?
 Both are within the top 5 largest banks in the UK:
 HSBC: 1st largest bank in the UK with a market share of
24.82%.
 Barclays: 2nd largest bank in the UK with a market share of
14.37%.
 Both have overcome significant challenges over the last 10 years:
 Changes in Technology
 Security Breaches (Fraud/Money laundering) (Financial
times, 2017)
 Covid-19 Pandemic
 Both operate within the volatile UK market:
 Fluctuations in GDP
 Constant innovation in technology
 HSBC Structure
Which structure is used?
 HSBC uses a matrixed management structure, as the organisation focuses on the global Chief Executive Officer
businesses and global support functioned. (HSBC, 2021) (CEO)
 HSBC uses the matrix structure as; employee motivation is greater; better professional
development; more efficient communication; better resource management.
 HSBC structure is influenced by the regulatory framework of the UK Prudential
Regulation Authority. (HSBC, 2021)
 HSBC is organised into three business groups: Commercial Banking, Global Banking and
Markets, and Wealth and Personal Banking. (HSBC, 2021)

What are the roles of the managers?

Manager, Chief of Chief of
 HSBC communication is centralised as they use a top-down approach. Many banks use Manager, Manager, Manager,
Human Personal Corporate
the top-down approach to react to changes due to the volatility of the market. Services Financial Marketing
Resources Banking Banking
 HSBC HRM Strategy
Employee Engagement
 Staying agile, responsive and relevant (Rsi, Diversity
2021)  HSBC measures diversity through talent programs
(HSBC, 2022)
 Create a sense of passion amongst by establishing accelerator programmes for
employees to drive innovation (Rsi, 2021) women and ethnic minorities to address historical
 HSBC University (Rsi, 2021) barriers to progression. (HSBC, 2022)
 HSBC have expanded their recruitment partners to
include specialist firms, improving the diversity of
Ethical Conduct short listed candidates and hires. (HSBC, 2022)
 The UK Equality Act 2010, HSBC’s general
principles are that suppliers and their supply
chain, contractors and service providers must
ensure that they have robust procedures to
ensure that they provide disability accessible
products, services and opportunities.
Suppliers should:
 Commit to removing employment
barriers for disabled people
 Provide products and services that
are accessible to disabled people
 Review their products and services
with the involvement of disabled
people
 Promote their commitment to
disability issues externally
(HSBC, 2020) (HSBC, 2022)
 Barclays Structure
 Barclays uses a hierarchical organisational structure as the many
layers of management allow for the dedicated teams to be
managed efficiently. (GreenHead, 2019)
 Managers within Barclays use a decentralised communication
approach as the employees within the dedicated teams are highly
skilled. (GreenHead, 2019)

(Wewalage, 2021)
 Barclays HRM Strategy
The purpose of HRM in Barclays
 Job analysis and recruitment
 Organization, maintenance and utilization
 Performance appraisal
 Reward systems
 Employee development and training
Barclays 5 guiding principles are key to the way
the business operates:
 Winning together: Achieving collective and
individual success
 Best people: Developing talented colleagues
to reach their full potential, to ensure
Barclays retains a leading position in the
global financial services industry
 Customer and client focus: Understanding
customers and serving them brilliantly.
 Pioneering: Driving new ideas, adding diverse
skills and improving operational excellence.
 Trusted: Acting with the highest integrity to
retain the trust of customers, external
stakeholders and colleagues.
(UKEssays, 2018)
Diversity (Barclays, 2021)
 Barclays focus on six areas: disability,
gender, LGBT+, multicultural,
multigenerational and socio-economic
inclusion. Senior leaders champion,
they are embedded into the
organisation through employee
resource groups, organised by our
people and funded by Barclays.
(Barclays, 2022)
Ethical Conduct
 The five new principles from Barclays’
ethical code of Respect, Integrity,
Service, Excellence, and Stewardship
are honourable but hollow if
employees are not empowered to live
by them. (Barclays, 2021)
 Maslow’s Hierarchy of Needs
 Developed by Abraham Maslow in 1943, the theory considers human psychological needs and
behaviour for effective motivation of employees. (Smith, 2021)
 Organisations use the theory as it is useful for both personal development and workplace growth. By
identifying what humans need and what drives and motivates people, employers and employees can
develop mutually beneficial relationships and positive environments conducive to work. (Kautt, 2018)
 How organisations implement the theoretical approach:
 New employees – Physiological needs and Love/Belonging
 Driven employees – Physiological needs and Self-Esteem
 Mature employees – Physiological needs and Safety

Criticisms
 Overreliance on the theory of Hierarchy of needs and may turn the company to a more technical
approach as long as individuals prioritise those higher needs in the hierarchy differently. Further,
extrinsic motivation (rewards) is important though, without having intrinsic motivation, staff cannot be
totally committed to their work. (Soni and Soni, 2016)

(Clark, 2012)
 Maslow’s Hierarchy Applied
Maslow’s
Hierarchy of Needs
Self-Actualisation HSBC maintains a culture where employees' opinions, innovations, ideas are
appreciated and accepted via a communication avenue called “Spark”. This is where
the employee post their ideas, which are assessed by management via the online tool.
(HSBC, 2018)
Self-Esteem In the HSBC bank, employees always learn to obtain more power that controls other
behaviour when they are in a higher position than others. They learn this need by
observing other who having higher position. Hence, they will work harder to get reach
their needs and target. (HSBC, 2018)
Love/Belonging HSBC aims to bring together people, ideas and capital that nurture progress and
growth, helping to create a better world – for customers, people, investors,
communities and the planet. (HSBC, 2018)
Safety HSBC has implemented a confidential reporting system named “whistleblowing”
where any employee can report or bring to the notice of the management if there is
any unethical or fraudulent activity is being practiced among the banks network where
the banks safety and/or the employees safety is at a risk, to a dedicated director of the
board by a telephone call while informants identification is not disclosed. (HSBC, 2018)
Physiological HSBC provides special loan schemes to its employees at low-interest rates, such as
Needs Housing and repair loans, furniture loans, wedding loans, funeral loans, pilgrimage
loans, educational loans, consumer loans, motor vehicle and repair loans, bicycle loans
in order to uplift their employees and their family’s living standards. (HSBC, 2018)
Barclays believe that opportunities are created by those who like to
challenge convention, explore new possibilities, run with bold ideas and
look for career potential in any role they take. People who think
differently, who bring all kinds of backgrounds, skills, experiences and
perspectives with them. (Barclays, 2022)
Barclays considers career development for hard working and deserving
personnel; where deserving employees are given sponsorships to develop
their career in order to be promoted into a higher office, job role or
position. (Barclays, 2022)
Employees are very involved in company development because
management are able to indicate performance margins and this is done
on a weekly basis through a “Monday briefing section” with all employees
being aware of the progress of the company. This pushes employee to
perform to meet company’s expectation as there is a sense of
involvement among employees. (Barclays, 2022)
Barclays start with a competitive salary, pension/retirement fund,
discretionary annual bonus, life assurance and income protection cover.
Employees can also take advantage of a wide choice of voluntary benefits,
with discounts and tax advantages on many of them. (Barclays, 2022)
Barclays provides their workers with reward for their past achievement
and incentives for better performance in the future as well. This system
has also been used for addressing problems within the workforce by
constituting disciplinary measures. (Barclays, 2022)
 Herzberg’s 2-Factor Theory
 Created by Frederick Herzberg (1959) the theory aims to motivate employees by removing
dissatisfiers and introducing satisfiers. (Ronald and Marc, 2021)
 Motivator factors: factors that are related to workplace satisfaction. They cover intrinsic needs

High
such as achievement, recognition, and advancement. Motivator factors allow employees to be
content in their jobs and promote growth. (Zdonek et. al., 2021)
 Hygiene factors: factors that are not related to workplace satisfaction but must be present in
the workplace in order to prevent dissatisfaction. Hygiene factors cover extrinsic needs such as
pay grade, workplace policy and relationships with their peers. (Mardanov, 2021)

Hygiene
Low
Low Motivators High
(EPM, 2021)
(EPM, 2021)
 Herzberg Theory Applied
Motivator Performance & Achievement Performance & Achievement
Factors  Schedule regular appraisals for employees, to review progress, problems and plans.  Financial targets and strategic non-financial performance measures (Barclays, 2021)
 Reward employees for achieving their goals - with money, praise or opportunities to run  Barclays aims to deliver a positive and sustainable results for stakeholders, while maintaining
new projects. (HSBC, 2018) flexibility in a fast-moving world. (Barclays, 2021)
 Monthly performance check (HSBC, 2018) Recognition
Recognition  “We’re celebrating entrepreneurs for their exceptional innovation, and for creating social
 Bonuses (HSBC, 2018) change and growth that’s moving the UK forward.” (Barclays, 2021)
 Personal Development (Further Qualifications) (HSBC, 2018) Advancement
Advancement  Contribution to society is the social corporate responsibility (Barclays, 2021)
 Remuneration packages (HSBC, 2018)  “We are at our best when clients, customers, communities, and colleagues all progress
 Salary can be made up of several elements: basic pay, commission, bonuses, profit- together” (Barclays, 2021)
related pay and share dividends, pension, insurance or healthcare schemes. (HSBC, 2018) Work itself
Work itself  Dynamic Working (Barclays, 2021)
 Teamwork (HSBC, 2018)  Empowering colleagues to work in the way that suits their lives (Barclays, 2021)
 Growth and progression (HSBC, 2018)

Hygiene Company Policy Company Policy

Factors  Ethical conduct (HSBC, 2018)  Ethical conduct (Barclays, 2021)
Supervision Supervision
 Communication is kept open and honest (HSBC, 2018)  “Regulations that impact corporates are always changing. From PSD2 to IFRS, our corporate
 Regular appraisal for employees to review progress (HSBC, 2018) regulations hub helps to guide you through some of the changes.” (Barclays, 2021)
Working Conditions  Top management leads by example following the policies of the organisational mission.
 An atmosphere of trust and team work (HSBC, 2018) (Barclays, 2021)
 Workers are encouraged to ask for help when in difficult situations (HSBC, 2018) Working Conditions
Job Security  Flexible working environment (Barclays, 2021)
 Competitive salary within the industry (HSBC, 2018)  Integrity, empathy, championing innovation and sustainability for the common good
 Bonus schemes (HSBC, 2018) (Barclays, 2021)
Personal Life Job Security
 Employees are treated as partners in the business (HSBC, 2018)  Competitive salary within the industry (Barclays, 2021)
 Subsidies are offered to staffs on products and services (HSBC, 2018) Personal Life
 Subsidies are offered to staffs on products and services (Barclays, 2021)
 Respect, Integrity, Service, Excellence and Stewardship. (Barclays, 2021)
 Acquired Needs Theory
Dominant Characteristics of this person
 Created by David McClelland (1960s), the theory was attempts to disregard an Motivator
employees age, sex, race, or culture when considering motivation. (Herman
and Svitlana, 2021) Achievement  Has a strong need to set and accomplish challenging goals.
 Takes calculated risks to accomplish their goals.
 Why organisations implement the theory: Likes to receive regular feedback on their progress and achievements.

 Provides a way for managers to determine the factors motivating each  Often likes to work alone.
of their team members (Treviño and Doh, 2021)
 There is no scope for any excuses regard (Treviño and Doh, 2021) Affiliation  Wants to belong to the group.
 Ensures that the company has satisfied employees which in the long  Wants to be liked, and will often go along with whatever the rest of the
run can prove to be a great asset to the company. (Treviño and Doh, group wants to do.
2021)  Favours collaboration over competition.
Disadvantages  Doesn't like high risk or uncertainty.
 Does not take into account of the basic needs (Ault et. al., 2021)
 With this theory there is an increased likelihood that employees Power  Wants to control and influence others.
may get stereotyped (Ault et. al., 2021)  Likes to win arguments.
 Enjoys competition and winning.
 There may be difficulty when considering the position of the Enjoys status and recognition.

employees and matching the needs as priorities differ (Ault et.
al., 2021)
(MindTools, 2021)
 Acquired Needs Theory Applied
Achievement  HSBC sets realistic goals and ensures employees can influence the
results they are being asked to achieve. (UKEssays, 2018)
 Performance is monitored against targets previously agreed by HSBC
and the employees. (HSBC, 2018)
 Employees are encouraged to come up with solutions to problems
themselves if they can. (HSBC, 2018)
Affiliation  Employees are swapped around departments and encouraged to work
in groups so they try each other’s jobs and appreciate each other’s
roles. This develops versatility and team spirit. (UKEssays, 2018)
 HSBC encourages collaboration across boundaries. The general believe
in the organization is “Together, we make possible what we cannot do
alone. (HSBC, 2018)
Power  HSBC gives generous recognition for exemplary work done by
employees. (HSBC, 2018)
 Employees ready to learn are enrolled into more advanced skills
programs. (UKEssays, 2018)
 Unlike other banks Barclays rewards employees with bonuses based on
customer service rather than sales generated. This bonus structure has
benefitted 20,000 employees. (Barclays, 2021)
 Individual targets are set at the beginning of the year. (Glassdoor,
2022)
 Barclays provides opportunities for employees to work on international
assignments. (Glassdoor, 2022)
 Barclays bank promotes team spirit amongst the employees,
managers are expected to give support to achieve group and individual
goals. ​(Barclays, 2021)
 Development opportunities to network enabling individuals
to gain new skills and qualifications.​(Glassdoor, 2022)
 Barclays bank offers a structured career progression plan. ​(Barclays,
2021)
 Barclays bank have a reward program  that recognises employees
for their commitment and success. (Barclays, 2021)
 Expectancy Theory
 Created by Victor Harold Vroom (1964) the theory considers the psychological study
considers how people behave in the workplace, particularly when it comes to
motivation, leadership and decision-making. (Bueckmann-Diegoli. et.al., 2021)
 Three Factors for Motivation:
 Expectancy (E) – (The level effort an employee puts in, they expect a certain
result) (Varma and Malhotra, 2022)
 Ensure that employees have the correct tools and time available to
complete the task (Jagerson, 2021)
 Assign an employee that already has or will gain useful skills
 Manager must be available to provide support and encouragement
 Instrumentality (I) – (How employee’s might make the effort and get the
expected result but if they do not believe that the result is instrumental
in getting the reward) (Varma and Malhotra, 2022)
 Clarity when considering the rewards and how they can be
achieved (Jagerson, 2021)
 Give staff an outcome they value so they can trust that their
effort is important (Jagerson, 2021)
 Openness about how rewards are allocated (Jagerson, 2021)
 Valence (V) – (How much of the outcome is valued) (Varma and
Malhotra, 2022) (Difference Between, 2015)
 -1 Avoiding the outcome/reward (Jagerson, 2021)
 0 Apathetic about the outcome/reward (Jagerson, 2021)
 +1 Desiring the outcome/reward (Jagerson, 2021)
 Expectancy Theory Applied
Expectancy (Effort)
 HSBC Schedules regular appraisals for
employees, to review progress, problems and
plans.​(HSBC, 2022)
 Skilled and experienced employees are
given opportunities to work on
international assignments.​(HSBC, 2022)
 There are provisions for employees
to gain professional qualifications within
the organisation.​(HSBC, 2022)
 The learning lab is the entry point for all
learning at Barclays, it provides a modern
learning experience for all employees regardless of
location or level.​(Barclays, 2022)
 Mid and end of year review.​(Barclays, 2022)
 Grades- to measure performance
under achieved, met or exceeded. This determines
bonus / pay rise.​(Barclays, 2018)
 Monitoring KPI’s.​(Barclays, 2021)
Instrumentality (Performance)
 Bonus targets are set monthly so results
can be monitored immediately.​(JHSBC, 2022)
 HSBC Focuses on total compensation with a strong
link between pay and performance.​(HSBC, 2021)
 HSBC's policy is designed to align compensation with long-
term stakeholder interests.​(HSBC, 2022)
 The focus is not only on what is achieved, but also how it
is achieved, and whether it is in line with the HSBC Values.
(HSBC, 2021)
 ​Best Service Recognition reward program to celebrate length
of service to the bank globally by unique employee
experience. (HSBC, 2022)
 Financial targets and strategic non-financial
performance measures are linked to the way employees are
paid. ​(Barclays, 2018)
 Barclays uses a range of metrics across all stakeholder
groups and continuously assess whether new measures
should be added or removed from their dashboards
for performance measurement.​(Barclays, 2018)
 Barclays frontline staff receives bonuses for
customer services rather than for product sales.​(Barclays,
2021)
Valence (Reward)
 People have their own priorities in relation to
the rewards they get from work: Rewards may
include money, recognition, friendships, security,
the challenge of new projects or a sense of
doing something worthwhile and ‘making a
difference’.​(HSBC, 2021)
  HSBC ensures their employees get a range
of benefits, which may cover areas such as work-
life balance, insurance and savings, health and
personal development.​(HSBC, 2021)
 HSBC Recognises and reward employees
for outstanding positive behaviour.​(HSBC, 2022)
 Quarterly incentive or annual bonus based on
performance. (HSBC, 2020)
 Employees enjoy flexibility in the choice of
benefit packages as they can make it individual to
them.​(Barclays, 2021)
 Barclays provide pay and benefit packages
to reward employee drive, commitment
and exceptional services.​(Barclays, 2022)
  Barclays has an active internal jobs market and
offer vacancies to employees before looking into
the external market.​(Barclays, 2022)
 Lewin’s Change Model
Lewin’s theory applied
to the banks for BREXIT
BREXIT Unfreeze
HSBC realised that the European Economic Area
countries reliance on passporting (which allows
banks to trade across the EU) will not be available
post Brexit. (Rees, 2019)
As a result of BREXIT, Barclays saw the need to
operate two principal business divisions; Barclays
UK and Barclays International. (Barclays, 2021)
Change
Focus shifted to preparations in France as its primary
banking entity within the EU, where in 2018 it
received regulatory approval. HSBC said that it is on
track to complete its transfer of operations to its
French business in the first quarter of 2019. (France,
2019)
Following the UK’s departure from the European
Union there was an expansion in existing subsidiary,
“Barclays Bank Ireland PLC (BBI)” in order to
continue providing products and services to clients.
(Barclays, 2021)
()
Refreeze
To account for customer migration and new
business after Brexit, HSBC is expanding its
operations in the Netherlands and Ireland. It said
its euro-denominated clearing facilities are now
available in France and further product launches
are planned. (Rees, 2019)
Barclays bank has engaged with clients affected by
BREXIT by transferring or duplicating contracts
currently in place with Barclays Bank PLC (BBPLC)
or Barclays Capital Securities Limited (BCSL) to
Barclays Bank International (BBI) via court order
rather requiring them to sign new documentation.
(Barclays, 2021)
Kotter’s Change Model
Kotter’s theory applied
to the banks for Covid-19

Covid-19 Step 1 - Develop a Step 2 - Build a Step 3 - Develop Step 4 - Get Step 5 - Take Step 6 - Step 7 - Sustain Step 8 - Implement
sense of urgency strong coalition strategic vision everyone buy-in action by remove Implement alteration change
barrier short-term win
Due to Covid-19, Managers helped The vision is to In order to Even though With employees This improvement This change proved
HSBC managers workers to gain implement the use implement the employees had equipped with allowed HSBC to cost efficient for
mandated perspective on the of technology as change HSBC laptops, internet the correct move all customer HSBC and allowed
employees to work changes of daily an essential tool provided speeds were an tools, there was complaints to for them to close
from home. activities, open up for organisational employees with issue. To an improvement online as they saw branches whilst
(Desklib, 2020) to new ways of success, allowing computer/laptop overcome this, in customer issues could be still increasing their
reaching objectives employees to systems that are HSBC provided service as and dealt with more market share in the
and unlearn bad sustain an income capable of dealing employees with the time taken ease, after the first UK banking
habits. (Desklib, during the with the workload. Optic Fibre to deal with the wave of the market. (Desklib,
2020) pandemic. (Desklib, 2020) internet. (Desklib, issues. (Desklib, pandemic. (Desklib, 2020)
(Desklib, 2020) 2020) 2020) 2020)

After the first Managers had to In accordance to Barclays managers In order to make Even though, the As the previous With the successful
lockdown, the implement the government implemented the 2- the working online service steps were integration of
government precautions with guidelines, metre social environment was striving, implemented these steps during
realised a need to consideration to Barclays vision was distance and suitable, some customer successfully, the period of
ease restrictions for the government to allow everyone within a managers issues had to be Barclays were able change, Barclays
businesses guidelines to allow employees to confined area had implemented dealt within the to open all their were able to
considered as key employees work work within the to wear a mask to glass screens branch, this was stores within the provide safe
for the UK economy. safely within the branches safely. prevent the spread enabling achievable as a UK, during the customer service
Therefore, Barclays branches. (Barclays, 2020) of the virus, employees to result of further ease of resulting in no
were enabled to (Barclays, 2020) ensuring employee work in their area bringing restrictions closure of their
open up some of safety. (Barclays, without a mask. employees back following the 1600 branches
the key branches 2020) (Barclays, 2020) into the branch. government within the UK,
within the UK. (Barclays, 2020) guidelines and the unlike the
(James, 2020) steps implemented competition.
by managers. (Barclays, 2021)
(Barclays, 2021)
Learning Organisation
Challenges
Lewin (BREXIT)
HSBC had to invest
£395,200,000 (20% of the
2017 revenue) to facilitate the
shift of its primary banking
entity within the EU to France
during Brexit. (France, 2018)
In order to continue
operations in the EU, the
need to create a new base
operating according to EU
regulations and laws was
imperative. (Collins, 2018)
Kotter (Covid-19)
In order to shift operations
online, managers faced
challenges regarding
effective communication to
employees as they were
unwilling to get out of their
bad habits. (France, 2018)
Barclays had to invest in
technology and equipment
to safely allow staff to work
from home. ​They also had
to implement safety
measures for customer
facing staff (branches).
(Barclays, 2019)
Implementation
Solutions
As most managers attended
the HSBC University they had
the suitable knowledge to help
facilitate the changes
employees faced during Brexit
and the Covid-19 pandemic.
(HSBC,2021)
Barclays created a second
headquarter within EU
territory and moved some
senior executives across. ​
Barclays opened a financial
tech hub in Glasgow which is
powered entirely by
renewable energy. (Collins,
2018)
Opportunities
Created opportunities for
UK and EU staff by
deploying and recruiting
staff.​Early
communication and the
change in leadership style
eased the transition for
HSBC employees. (HSBC,
2021)
This move created an
additional 200 jobs at the
new headquarters this
allowed Barclays to
continue trading in euros
with European clients.​
Barclays were able to
continue operating and
serving customers
efficiently. (Collins, 2018)
Learning
How they Learnt
The HSBC University proved beneficial,
HSBC allowed all employees to attend
the University online, which was cost
effective and this allowed for the
transition during the pandemic to be
implemented correctly without seeing a
negative impact on customer service.
Ultimately facilitating the closure of
stores as complaints were dealt effective
online. (HSBC, 2021)
Barclays benefited from the change from
the autocratic leadership approach to a
democratic approach within the
corporate investment sector as
employees were highly educated.
Allowing employees more input in
decision making facilitated the success
during the Covid-19 pandemic as Barclays
closed zero branches throughout the
pandemic, which was unlike any of the
competition. (Barclays, 2019)
 Financial Management
(Quora, 2021)
 Financial Ratio Analysis
 Financial ratio analysis is a quantitative tool that managers use to
gather valuable insights into a business firm's profitability, solvency,
efficiency, liquidity, and how geared they are. (Bloomental, 2021)
 Ratio analysis is conducted with the use of the data contained in the
firm's balance sheet, income statement, and statement of cash flows.
(Bloomental, 2021)
 The information gathered from financial ratio analysis is invaluable to
managers who have to make financial decisions for the business and To get the benchmark we used the Top 6 banks within
to external parties, like investors, so that they may evaluate the the UK and these consisted of: HSBC, Barclays, Lloyds,
financial health of the business, when considering the competition. NatWest, Standard Chartered and Santander.
(Bloomental, 2021)

Profitability Efficiency
 Gross Profit  Debtor Turnover
 Net Profit  Creditors Turnover
Liquidity  ROCE Solvency Gearing
 Return on
Shareholder Funds
 Net Asset Turnover
 LIQUIDITY

Liquidity 1.1
BM HSBC BARCLAYS

1.05
 Is how quickly an assets can be turned into cash at a price
reflecting its current value. (Mueller, 2021)
1
 Cash is the most liquid of assets, while tangible items are less

Ratio
liquid. (Mueller, 2021)
 The current ratio is payable or receivable within a 12 months 0.95
(Mueller, 2021)
 Ideal level – 1.5 : 1 (Mueller, 2021) Example (HSBC Year 2020) 0.9

Current Ratio = Current Assets 680,384,000

= 1.04 0.85
Current Liabilities 656,420,000 2010 2012 2014 2016 2018 2020 2022
Duration (Year)
(Hayes, 2021)
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Current Asset/ £680,384,000.0 £249,556,000.0 £601,393,000.0 £812,475,000.0 £810,721,000.0 £720,751,000.0 £788,205,000.0 £725,204,000.0 £732,406,000.0 £812,015,000.0
Current
HSBC £656,420,000.0 £230,111,000.0 £562,880,000.0 £755,596,000.0 £745,144,000.0 £678,726,000.0 £749,662,000.0 £765,942,000.0 £763,309,000.0 £767,384,000.0
Liabilities*100
1.04 1.08 1.07 1.08 1.09 1.06 1.05 0.95 0.96 1.06

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
1.036507114 1.0845027 1.068421333 1.075277 1.088005808 1.061917475 1.051413837 0.946813205 0.95951443 1.05815993
BARCLAYS Current Asset/ £1,057,016,000.0 £873,534,000.0 £869,926,000.0 £1,116,710,000.0 £1,198,694,000.0 £1,103,706,000.0 £1,341,830,000.0 £1,295,346,000.0 £1,471,193,000.0 £1,543,150,000.0
Current
£1,004,356,000.0 £824,713,000.0 £828,579,000.0 £1,060,020,000.0 £1,114,839,000.0 £1,050,043,000.0 £1,264,999,000.0 £1,243,428,000.0 £1,424,115,000.0 £1,493,301,000.0
Liabilities*100
1.05 1.06 1.05 1.05 1.08 1.05 1.03 1.04 1.03 1.03

(Fame, 2022)
Profitability – Gross Profit Gross Profit Margin

Margin (Profit Before Interest 25.00

BM HSBC BARCLAYS

Paid) 20.00

 Profit before interest paid is used to analyse the performance of

a company's core operations without the costs of the capital 15.00
structure and tax expenses impacting profit. (Pritchard, 2021)

Ratio
 Profit before interest paid can also be a profitability measure 10.00
that provides for greater comparability among companies that
pay a varying amount of taxes. (Pritchard, 2021)
5.00

Example (HSBC Year 2020)

Operating Profit 0.00
* 100
Turnover 2010 2012 2014 2016 2018 2020 2022
1,614,000,000
*100 = 14.48 Duration (year)
11,145,000,000
(Hayes, 2021)

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Operation profit £1,614,000.0 £672,000.0 £1,974,000.0 £2,370,000.0 £874,000.0 £2,971,000.0 £1,953,000.0 £3,294,000.0 £1,004,000.0 £3,111,000.0
HSBC Turnover *100 £11,145,000.0 £11,421,960.0 £16,670,000.0 £19,760,000.0 £20,041,000.0 £18,630,000.0 £18,313,000.0 £32,463,000.0 £20,451,000.0 £21,626,000.0
14.48 5.88 11.84 11.99 4.36 15.95 10.66 10.15 4.91 14.39

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
BARCLAYS Operation profit £3,075,000.0 £3,112,000.0 £1,286,000.0 £3,166,000.0 £4,383,000.0 £2,841,000.0 £2,309,000.0 £2,885,000.0 £99,000.0 £5,974,000.0
Turnover *100 £20,503,000.0 £16,248,000.0 £19,704,000.0 £26,721,000.0 £27,224,000.0 £32,400,000.0 £32,708,000.0 £36,873,000.0 £34,337,000.0 £43,102,000.0
15.00 19.15 6.53 11.85 16.10 8.77 7.06 7.82 0.29 13.86

(Fame, 2022)
Profitability – Net Profit Net Profit Margin

Margin 20.00
BM HSBC BARCLAYS

 Net profit is the source of compensation to a company’s shareholders. If a

company can not generate enough profit to compensate owners, the value of 15.00
shares will plummet. If a company is healthy and growing (with increased
profits), higher stock prices should result. (Murphy, 2022) 10.00
 Net profit margin helps investors assess if a company's management is
generating enough profit from its sales and whether operating costs and

Ratio
5.00
overhead costs are being contained. (Murphy, 2022)
 Net profit margin is one of the most important indicators of a company's 0.00
overall financial health. (Murphy, 2022) 2010 2012 2014 2016 2018 2020 2022

Example (HSBC Year 2020) -5.00

Net Income
Turnover *100 1,478,000,000 -10.00
*100 = 13.26
11,145,000,000 Duration (Year)
(Murphy, 2022)
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Net Income 1478000.00 178000.00 1506000.00 1809000.00 -212000.00 1942000.00 1354000.00 2495000.00 2384000.00 2329000.00
HSBC Turnover *100 11145000.00 11421960.00 16670000.00 19760000.00 20041000.00 18630000.00 18313000.00 32463000.00 20451000.00 21626000.00
13.26 1.56 9.03 9.15 -1.06 10.42 7.39 7.69 11.66 10.77

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
BARCLAYS Net Income 2451000.00 2780000.00 835000.00 -1298000.00 3324000.00 911000.00 528000.00 963000.00 -723000.00 3616000.00
Turnover *100 20503000.00 16248000.00 19704000.00 26721000.00 27224000.00 32400000.00 32708000.00 36873000.00 34337000.00 43102000.00
11.95 17.11 4.24 -4.86 12.21 2.81 1.61 2.61 -2.11 8.39

(Fame, 2022)
 Profitability – Return on ROCE

Capital Employed
BM HSBC BARCLAYS
9.00

8.00

7.00
 Return on capital employed (ROCE) is a financial ratio that
measures a company’s profitability in terms of all of its capital. 6.00

(Horton, 2021) 5.00

 The ROCE ratio is one of several profitability ratios financial

Ratio
4.00
managers, stakeholders, and potential investors may use when
analysing a company for investment. This can help neutralise 3.00
financial performance analysis for companies with significant debt. 2.00
(Horton, 2021) Example (HSBC Year 2020) 1.00

Profit (Loss) before Interest paid 0.00

Total Assets – Current Liabilities 1,614,000,000 2010 2012 2014 2016 2018 2020 2022
= 6.53
24,730,000,000 Duration (Year)
(Hayes, 2022)
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Profit (Loss) before
HSBC £1,614,000.0 £692,000.0 £1,974,000.0 £2,370,000.0 £874,000.0 £2,971,000.0 £1,953,000.0 £3,294,000.0 £1,004,000.0 £3,111,000.0
Interest paid
Total Assets Less
£24,730,000.0 £31,031,390.1 £42,078,000.0 £63,272,000.0 £71,685,000.0 £49,215,000.0 £47,627,000.0 £45,753,000.0 £52,172,000.0 £60,586,000.0
Current Liabilities
6.53 2.23 4.69 3.75 1.22 6.04 4.10 7.20 1.92 5.13

Profit (Loss) before
Barclays £3,075,000.0 £3,112,000.0 £1,286,000.0 £3,166,000.0 £4,383,000.0 £2,841,000.0 £2,309,000.0 £2,885,000.0 £99,000.0 £5,974,000.0
Interest paid
Total Assets Less
£55,375,000.0 £51,959,000.0 £49,121,000.0 £69,323,000.0 £99,116,000.0 £70,684,000.0 £93,694,000.0 £69,412,000.0 £66,632,000.0 £70,101,000.0
Current Liabilities
5.55 5.99 2.62 4.57 4.42 4.02 2.46 4.16 0.15 8.52

(Fame, 2022)
 Return on Share Holder Funds
Profitability - Return on BM HSBC BARCLAYS

Shareholder Funds 12.00

10.00

 Return on shareholder funds an accounting measure of the rate of return that 8.00
shareholders have obtained on the capital which they have invested in the business.
(Fernando, 2021) 6.00

Ratio
 A ratio lower than 10% is considered a poor performance on return on shareholder
4.00
funds. (Fernando, 2021)
2.00
Example (HSBC Year 2020)
Profit (Loss) before Tax 0.00
* 100 2010 2012 2014 2016 2018 2020 2022
Shareholder Funds 1,614,000,000 *100 = 6.82 -2.00
23,666,000,000
(Javed, 2021) Time (Years)

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC Profit (Loss) before Tax/ 1,614,000,000 -334,142,100 1974000000 2,370,000,000 874,000,000 2,971,000,000 1,953,000,000 3,294,000,000 1,004,000,000 3,111,000,000
Shareholder Funds*100 23,666,000,000 24,039,000,000 26878000000 43,462,000,000 39,930,000,000 37,497,000,000 36,078,000,000 32,370,000,000 31,675,000,000 31,090,000,000
6.82 -1.39 7.34 5.45 2.19 7.92 5.41 10.18 3.17 10.01

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Barclays Profit (Loss) before Tax/ 3,075,000,000 3,112,000,000 1,286,000,000 3,166,000,000 4,383,000,000 2,841,000,000 2,309,000,000 2,885,000,000 99000000 5974000000
Shareholder Funds*100 53,710,000,000 50,615,000,000 47,709,000,000 65,733,000,000 67,433,000,000 64,105,000,000 63,794,000,000 61009000000 60,038,000,000 62,078,000,000
5.73 6.15 2.70 4.82 6.50 4.43 3.62 4.73 0.16 9.62

(Fame, 2022)
 Profitability – Net Asset Net Asset Turnover
BM HSBC BARCLAYS

Turnover Margin 0.8

0.7

0.6
 Net asset turnover is a financial measurement which is intended to
gauge how well a company turns its assets into revenue. (Hayes, 2022) 0.5
 A company with a high net asset turnover ratio is usually doing an
0.4

Ratio
efficient job of turning its capital into revenue. By contrast, a low ratio
could be a sign of inefficiency, although the ratios are most effective 0.3
when compared with companies in similar industries. (Hayes, 2022)
0.2

0.1
Turnover Example (HSBC Year 2020)
0
Total Assets - Current Liabilities 2010 2012 2014 2016 2018 2020 2022
11,145,000,000
= 0.45 Duration (Year)
(Beers, 2021) 24,730,000,000

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC Turnover/ 11,145,000,000 11,421,960,000 16,670,000,000 19,760,000,000 20,041,000,000 18,630,000,000 18,313,000,000 32,463,000,000 20,451,000,000 21,626,000,000
Total Assets less Current Liabilities 24,730,000,000 34,612,000,000 42,078,000,000 63,272,000,000 71,685,000,000 49,215,000,000 47,627,000,000 45,753,000,000 52,172,000,000 60,586,000,000
0.45 0.33 0.40 0.31 0.28 0.38 0.38 0.71 0.39 0.36

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Barclays Turnover/ 20,503,000,000 16,248,000,000 19,714,000,000 26,721,000,000 27,224,000,000 32,400,000,000 32,708,000,000 36,873,000,000 34,337,000,000 43,102,000,000
Total Assets less Current Liabilities 55,375,000,000 51,959,000,000 49,121,000,000 69,323,000,000 99,116,000,000 70,684,000,000 93,694,000,000 69,412,000,000 66,632,000,000 70,101,000,000
0.37 0.31 0.40 0.39 0.27 0.46 0.35 0.53 0.52 0.61

(Fame, 2022)
Efficiency - Debtor Turnover Debtor Turnover
BM HSBC BARCLAYS

Ratio 0.80

0.70

 Debtor Turnover ratio is an activity ratio that finds out the relationship 0.60
between net credit sales and average trade receivables of a business.
0.50
(Murphy, 2021)
 It helps in cash budgeting as cash flow from customers can be computed

Ratio
0.40
on the basis of total sales generated by a business. (Murphy, 2021)
0.30

Example (HSBC Year 2020) 0.20

Turnover
0.10
Trade Debtors
11,145,000,000
= 0.02
504,985,000,000 0.00
2010 2012 2014 2016 2018 2020 2022
(Murphy, 2021)
Duration (Year)

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC Turnover/ 11,145,000,000.00 11,421,960,000.00 16,670,000,000.00 19,760,000,000.00 20,041,000,000.00 18,630,000,000.00 18,313,000,000.00 32,463,000,000.00 20,451,000,000.00 21,626,000,000.00
Trade Debtors 504,985,000,000.00 502,656,000,000.00 533,911,000,000.00 698,708,000,000.00 743,114,000,000.00 597,792,000,000.00 650,194,000,000.00 648,205,000,000.00 671,643,000,000.00 745,295,000,000.00
0.02 0.02 0.03 0.31 0.28 0.38 0.38 0.71 0.39 0.36

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Barclays Turnover/ 20,503,000,000.00 16,248,000,000.00 19,714,000,000.00 26,721,000,000.00 27,224,000,000.00 32,400,000,000.00 32,708,000,000.00 36,873,000,000.00 34,337,000,000.00 43,102,000,000.00
Trade Debtors 756,336,000,000.00 661,221,000,000.00 729,889,000,000.00 943,448,000,000.00 1,020,386,000,000.00 1,042,646,000,000.00 1,282,623,000,000.00 1,245,065,000,000.00 1,380,409,000,000.00 1,431,322,000,000.00
0.03 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.03

(Fame, 2022)
 Efficiency - Creditor Creditor Turnover
BM HSBC BARCLAYS

Turnover Ratio 0.05

0.04
 Creditor’s turnover ratio is an activity ratio that finds out the relationship
between net credit purchases and average trade payables of a business. 0.03
(Murphy, 2020)

Ratio
 It finds out how efficiently the assets are employed by a firm and indicates
0.02
the average speed with which the payments are made to the trade
creditors. (Murphy, 2020)
0.01
Example (HSBC Year 2020)
Turnover 0.00
Trade Creditors 11,145,000,000 = 0.03 2010 2012 2014 2016 2018 2020 2022
428,652,000,000 Duration (Year)
(Murphy, 2020)

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC Turnover/ 11145000000 11421960000 16670000000 19760000000 20041000000 18630000000 18313000000 32463000000 20451000000 21626000000
Trade Creditors 428652000000 420789000000 460,271,000,000 727,860,000,000 737,952,000,000 656,038,000,000 719,468,000,000 743,635,000,000 742,741,000,000 759,174,000,000
0.03 0.03 0.04 0.03 0.03 0.03 0.03 0.04 0.03 0.03 0.30 0.03

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Barclays Turnover/ 20503000000 16248000000 19714000000 26721000000 27224000000 32400000000 32708000000 36873000000 34337000000 43102000000
Trade Creditors 886,084,000,000 819,154,000,000 822,929,000,000 1,026,917,000,000 1,039,888,000,000 1,035,073,000,000 1,239,429,000,000 1,228,713,000,000 1,386,844,000,000 1,456,840,000,000
0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.02 0.03 0.26 0.03

(Fame, 2022)
 Solvency Ratio
Solvency 7
BM HSBC BARCLAYS

 Ability to meet long-term debts and other financial obligations to 6

continue operating in the future. It is one measure of an organisations
financial health. (Hayes, 2020) 5
 Solvency is one measure of a company’s financial health, since it
demonstrates a company’s ability to manage operations into the 4
foreseeable future. (Hayes, 2020)

Ratio
 A solvency ratio indicates whether a company’s cash flow is sufficient to 3
meet its long-term liabilities and thus is a measure of its financial health.
An unfavourable ratio can indicate some likelihood that a company will 2
default on its debt obligations. (Hayes, 2020)
Example (HSBC Year 2020) 1

Shareholder Fund
*100 23,666,000 *100 = 3.47 0
Total Assets 2010 2012 2014 2016 2018 2020 2022
681,150,000
Duration (Year)
(Hayes, 2021)

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC Shareholders Fund / £23,666,000.0 £21,782,000.0 £26,878,000.0 £43,462,000.0 £39,930,000.0 £37,497,000.0 £36,078,000.0 £32,370,000.0 £31,675,000.0 £31,090,000.0
Total Asset*100 £681,150,000.0 £548,664,987.4 £604,958,000.0 £818,868,000.0 £816,829,000.0 £727,941,000.0 £797,289,000.0 £811,695,000.0 £815,481,000.0 £827,970,000.0
3.47 3.97 4.44 5.31 4.89 5.15 4.53 3.99 3.88 3.75

Barclays 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Shareholders Fund / £53,710,000.0 £50,615,000.0 £47,709,000.0 £65,733,000.0 £67,433,000.0 £64,105,000.0 £63,794,000.0 £61,009,000.0 £60,038,000.0 £62,078,000.0
Total Asset*100 £1,059,731,000.0 £876,672,000.0 £877,700,000.0 £1,129,343,000.0 £1,213,955,000.0 £1,120,727,000.0 £1,358,693,000.0 £1,312,840,000.0 £1,490,747,000.0 £1,563,402,000.0
5.07 5.77 5.44 5.82 5.55 5.72 4.70 4.65 4.03 3.97

(Fame, 2022)
 Gearing
Gearing
BM HSBC BAYCLAYS
250
 Gearing ratios are a group of financial metrics that compare shareholders' equity to
company debt in various ways to assess the company's amount of leverage and 200
financial stability. (Accounting Tool, 2021)
 Gearing is a measure of how much of a company's operations are funded using debt
150
versus the funding received from shareholders as equity. (Accounting Tool, 2021)

Ratio
 A higher gearing ratio indicates that a company has a higher degree of financial
100
leverage and is more susceptible to downturns in the economy and the business cycle.
(Accounting Tool, 2021)
50
Example (HSBC Year 2020)
(Short Term Loans & Overdrafts + Long Term Liabilities)
*100 1,614,000 *100 = 4.50 0
Shareholder Funds 2010 2012 2014 2016 2018 2020 2022
23,666,000 Duration (Year)
(Kenton, 2022)
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Short Term Loan
HSBC 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -10441000000.00 -908000000.00
& Overdraft - -16664000000.00
Long term
-1064000.00 -4370000.00 -15200000.00 -19810000000.00 -31755000000.00 -11718000000.00 -11549000000.00 -13383000000.00 -20497000000.00 -29496000000.00
Liabilities -
Shareholders
23666000.00 37542955.33 26878000.00 43462000000.00 39930000000.00 37497000000.00 36078000000.00 32370000000.00 31675000000.00 31090000000.00
Fund * 100
4.50 11.64 56.55 45.58 79.53 75.69 32.01 41.34 97.67 97.79

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Short Term Loan
BARCLAYS 0.00 0.00 -4000.00 -24196000.00 -6000.00 0.00 -113000.00 0.00 -24457000.00 -24934000.00
& Overdraft -
Long term
-1665000.00 -1344000.00 -1412000.00 -3590000.00 -31683000.00 -6579000.00 -29900000.00 -8403000.00 -6594000.00 -8023000.00
Liabilities -
Shareholders
53710000.00 50615000.00 47709000.00 65733000.00 67433000.00 64105000.00 63794000.00 61009000.00 60038000.00 62078000.00
Fund * 100
3.10 2.66 2.97 42.27 46.99 10.26 47.05 13.77 51.72 53.09

(Fame, 2022)
 Resource Integration
HSBC
 Chinese Storm (2015)
 HSBC lost $2.6 trillion across the globe stock market. HSBC’s main source of income is from
Hong Kong. HSBC covered by 2.9% by 2016 by incentivising employees’ who exceeded in
their performance by offering holidays and bonuses. (Ferguson, 2017)
Net Profit Margin
 Mortgage Fine (2016)
 HSBC fined £325 million for abusive mortgage practices and £59.3 million in compensation BM HSBC BARCLAYS
to borrowers who lost their homes. In order to compensate the negative brand image and 20.00
to recover from the decline HSBC invested in financial education (Knowledge You), which
was tailored to employee learning styles of its 45,000 UK employees. (Neate, 2016) 15.00

 Covid-19 (2019)
10.00
 HSBC suffered a loss of 65% in pre-tax profit in the first half of 2019 total pre-tax profit for
2019 was £8.8 billion which increased to £18.9 billion in 2020. (Makortoff, 2020)

Ratio
 HSBC Asia accounts for the majority of the organisational success, however due to the crash 5.00

in estate price dropped by 5% contributed to the loss as main source of profit is lending and
mortgages. (Makortoff, 2020) 0.00
2010 2012 2014 2016 2018 2020 2022
 How HSBC recovered from Covid-19:
 HSBC moved its headquarters from Hong Kong to London UK. (Makortoff, 2020) -5.00
 Employed 41,000 staff across its UK divisions throughout the pandemic. (Wilson,
2021) -10.00 Chinese
 Shifted its focus from retail to wealth management in the UK to increase profit.
Storm Duration (Year) Covid-19
(Wilson, 2021)
 Closed 81 branches across UK and deployed staff within 15 mile radius. (HSBC, 2021)
HSBC
 Introduced Mobile branches. (HSBC, 2021)
Mortgage
 ‘The Play’- changed from traditional top down approach to free flowing (employee
Fine
motivation) (HSBC, 2021)
 Introduced a fairer recruitment process (allowing for more diversity). (HSBC, 2021)
Resource Integration
Barclays
 Libor Scandal (2012)
 In June 2012, as a result of an international investigation, Barclays Bank was fined a
total of £290 million for manipulating the daily settings of London Interbank Offered Net Profit Margin
Rate (Libor Scandal). As a result of this Barclays employee retention decreased 17%. Covid-19
BM HSBC BARCLAYS
(Chakrabortty, 2012)
20.00
 Barclays Business Scandal (2017)
 Barclays had a net loss of £2.5bn, after taking big hits from selling its African operation. 15.00
In order to accommodate the increase in profit the year after, Barclays reduce shares
from 60% to 15%. With the successful implementation of the Dynamic Working 10.00
Scheme, the employees enable Barclays to gain a 10% pre-tax profit. (Treanor, 2017)
 One-off net tax charge of £901m due to the US Tax Reforms. (Kollewe, 2017)

Ratio
5.00
 Qatar PPI Scandal, resulting in a loss of £700m. (Marriner , 2017)
0.00
 Covid-19 (2019) 2010 2012 2014 2016 2018 2020 2022
 Even though, within the first quarter of 2019 Barclays lost £2.1bn, the saw an increase
-5.00
in profit as the corporate investment sector saw a raise of 31% jump in income to £6.9
billion. This is a result of the shift in leadership style within the corporate investment
sector as managers realised that employees are highly educated, allowing for the -10.00 Libor
adoption of a democratic leadership approach. (Insider, 2020) Scandal Duration (Year)
 The drastic increase in profit during 2018 was fuelled by Barclays bank employees
working dynamically, employee motivation increased by 57% due to flexible working Barclays
conditions. With the implementation of the Herzberg 2-factor framework managers Business
were able to encourage employees by making them a part of the decision making. Scandals
(Insider, 2020)
 Investors Choice
Performance Indicators HSBC Barclays Benchmark Remarks - HSBC Remarks - Barclays
Liquidity 1.04 1.05 1.03 Good Good
Profitability (Gross Profit) 10.46 10.64 10.92 Bad Bad
Profitability (Net Profit) 7.99 5.40 7.51 Good Very Bad
Profitability (ROCE) 4.28 4.25 4.08 Good Good
Profitability (Return on 5.71 4.85 4.99 Good Bad
Shareholder Funds)
Profitability (Net Asset 0.40 0.42 0.39 Good Good
Turnover)
Efficiency (Debtor 0.29 0.03 0.11 Very Good Very Bad
Turnover)
Efficiency (Creditor 0.03 0.03 0.04 Bad Bad
Turnover)
Solvency 4.34 5.07 5.57 Very Bad Bad
Gearing 54.23 27.39 67.50 Good Very Good

The Green represents the more suitable choice for

The data is the average for the 10 years.
the performance indicator.
 Conclusions
 When considering the HR and financial aspects of both companies it appears that Barclays is performing better than HSBC:
 Profitability – Unlike Barclays, HSBC is above the benchmark for the Net Profit, ROCE and Return on Shareholder Funds.
 Efficiency – HSBC is very good for Debtor Turnover, for investors this is important as they are more likely to receive dividend
payments.
 Gearing – Even though Barclays is a lower risk investment, data suggests that HSBC gearing is decreasing, therefore, within the next
5 years it is projected that investors will receive a greater return on investment as shown by the data related to return on
shareholder funds.

 Overall
 Before Covid-19, the return on shareholder funds increased at a ratio of 3.0 per year. As a result of the cost of shifting
employees to work online there was a dip in the return on shareholder funds, hindering dividend payments throughout this
period. HSBC profits increased during the pandemic, showing the positive impact of the HSBC university and this is beneficial
for investors.
 Even though HSBC net profit decreased between 2015-2016 and 2019 as a result of external events, data suggests they were
able to overcome these issues through the continuous investment in their human resources and their effective
implementation of change management techniques.
 Management Accounting and Considerations for Investors

 In order to help recover from the Covid-19 pandemic the government has
introduced no stamp duty to first time home buyers at homes valued less that
£300,000. To increase the market share HSBC management is now offering a
lower interest rate for first time home buyers making the business more
attractive, thus increasing revenue and this is beneficial for investors.

 Furthermore, the growing implementation of the HSBC University for all

employees (available online) is a decision made by HSBC management to help
improve efficiency throughout the entire organisation. This is a benefit for
investors as the debt turnover is increasing along with the reducing gearing is
decreasing the risk for investment in HSBC.

(Financial Yard, 2022)

 Lessons Learnt
Conceptualising the Delegating tasks to the Forming the conclusion
Synthesising the Grouping the findings and practicing the
businesses that are suitable team information
going to get compared members presentation

 Successes  Challenges
 Familiarity with group members strengths and weaknesses as  Availability of all team members at the same time
we have worked together previously due to personal commitments
 Efficient delegation of tasks  Language barriers
 Effective time management  Rate of work required for the set deadlines
 The knowledge of different industries incorporated in
managing the workload
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 Appendix
Appendix A – Benchmark for Gearing
GEARING
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 4.50 11.64 56.55 45.58 79.53 75.69 32.01 41.34 97.67 97.79

BARCLAYS 3.10 2.66 2.97 42.27 46.99 10.26 47.05 13.77 51.72 53.09

LLOYDS 26.91 24.49 43.47 40.84 61.56 87.56 12.14 89.89 507.99 782.35

NATWEST 45.49 74.84 11.60 49.95 84.48 76.15 13.67 53.76 50.07 44.67

STANDARD
34.56 36.73 35.57 66.35 43.31 114.41 88.21 58.57 44.91 45.19
CHARTERED

SANTANDER 20.88 3.71 7.84 30.38 34.79 89.08 33.47 10.47 38.61 214.78

Added 135.44 154.07 158.00 275.37 350.66 453.15 226.55 267.80 790.97 1237.87 Added /10
Average 22.57 25.68 26.33 45.90 58.44 75.53 37.76 44.63 131.83 206.31 674.98 67.50
(Fame, 2022)
 Appendix
Appendix B – Benchmark for Debtor Turnover
Efficiency Debtor Turnover
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 0.02 0.02 0.03 0.31 0.28 0.38 0.38 0.71 0.39 0.36
BARCLAYS 0.03 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.03
LLOYDS 0.04 1.22 0.04 0.04 0.04 0.05 0.06 0.07 0.2 0.2
NATWEST 0.03 0.04 0.04 0.03 0.04 0.51 0.03 0.03 0.03 0.04
STANDARD CHARTERED 0.03 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.04 0.05
SANTANDER 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.04 0.03
Added 0.17 1.38 0.21 0.48 0.46 1.04 0.58 0.93 0.73 0.71 Added Average/10
Average 0.03 0.23 0.03 0.08 0.08 0.17 0.10 0.15 0.12 0.12 1.11 0.11
(Fame, 2022)
 Appendix
Appendix C – Benchmark for Creditor Turnover
Efficiency Creditor Turnover
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 0.03 0.03 0.04 0.03 0.03 0.03 0.03 0.04 0.03 0.03
BARCLAYS 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.02 0.03
LLOYDS 0.03 0.05 0.04 0.04 0.04 0.04 0.07 0.07 0.12 0.09
NATWEST 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.02 0.03
STANDARD CHARTERED 0.03 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.05
SANTANDER 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.04
Added 0.16 0.18 0.19 0.18 0.18 0.21 0.22 0.25 0.27 0.26 Added /10
Average 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.04 0.05 0.04 0.35 0.04
(Fame, 2022)
 Appendix
Appendix D – Benchmark for Gross Profit

Profitability (Profit Before

Interest Paid)
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 14.48 5.88 11.84 11.99 4.36 15.95 10.66 10.15 4.91 14.39
BARCLAYS 14.97 19.15 6.53 11.85 16.10 8.77 7.06 7.82 0.29 13.86
LLOYDS 28.99 16.15 22.75 23.03 9.46 4.42 5.62 1.70 -0.86 -3.43
NATWEST -15.23 12.45 17.27 9.67 -5.10 -3.42 15.82 -2.28 -1.97 -7.39
STANDARD CHARTERED 20.45 10.61 12.00 12.84 3.07 -6.68 16.87 23.30 29.67 27.60
SANTANDER 10.07 14.01 21.10 24.46 23.67 16.62 17.08 13.34 12.47 13.72
Added 73.73 78.25 91.49 93.84 51.56 35.66 73.11 54.03 44.51 58.75 Added /10
Average 12.29 13.04 15.25 15.64 8.59 5.94 12.19 9.01 7.42 9.79 109.16 10.92
(Fame, 2022)
 Appendix
Appendix E – Benchmark for Net Profit
Net Profit
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 13.26 1.57 9.03 9.16 -1.06 10.41 7.39 7.70 11.67 10.77
BARCLAYS 11.96 17.11 4.25 -4.85 12.22 2.81 1.63 2.61 -2.11 8.40
LLOYDS 29.73 10.19 21.75 18.93 5.27 2.14 4.37 -0.76 -2.30 -1.94
NATWEST -13.36 11.97 16.85 7.32 -4.66 -2.98 16.24 -2.19 -2.88 -6.53
STANDARD CHARTERED 16.80 9.25 4.43 6.01 -1.25 -10.46 10.54 15.92 18.22 19.80
SANTANDER 7.84 9.89 14.56 16.62 15.95 11.60 13.55 10.70 9.51 9.82
Added 66.23 59.98 70.87 53.19 26.47 13.52 53.72 33.98 32.11 40.32 Added Average
Average 11.04 10.00 11.81 8.87 4.41 2.25 8.95 5.66 5.35 6.72 75.07 7.51
(Fame, 2022)
 Appendix
Appendix F – Benchmark for Solvency

Solvency Ratio (Asset

Based)
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 3.47 3.97 4.44 5.31 4.89 5.15 4.53 3.99 3.88 3.75
BARCLAYS 5.07 5.77 5.44 5.82 5.55 5.72 4.7 4.65 4.03 3.97
LLOYDS 6.84 5.84 6.79 6.17 5.96 5.74 5.63 5.07 5.13 5.12
NATWEST 5.49 6.02 8.11 6.55 6.09 6.55 5.45 5.71 5.19 4.97
STANDARD CHARTERED 6.39 6.99 7.27 7.76 7.47 7.52 6.4 6.86 7.13 6.8
SANTANDER 5.4 5.63 5.47 5.1 5.26 5.52 5.14 4.63 4.42 4.26
Added 32.66 34.22 37.52 36.71 35.22 36.2 31.85 30.91 29.78 28.87 Added /10
Average 5.44 5.70 6.25 6.12 5.87 6.03 5.31 5.15 4.96 4.81 55.66 5.57
(Fame, 2022)
 Appendix
Appendix G – Benchmark for Liquidity
Liquidity
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 1.04 1.08 1.07 1.08 1.09 1.06 1.05 0.95 0.96 1.06
BARCLAYS 1.05 1.08 1.05 1.05 1.08 1.05 1.06 1.04 1.03 1.03
LLOYDS 1.05 1.08 1.07 1.07 0.87 1.01 0.97 1.07 0.55 0.56
NATWEST 0.98 1.08 1.08 1.07 1.11 1.08 1.05 1.07 0.98 1.05
STANDARD
0.85 1.08 1.09 0.84 1.06 1.1 1.09 1.05 1.05 1.09
CHARTERED
SANTANDER 1.05 1.08 1.05 1.06 1.06 1.09 1.04 1.03 1.04 1.13
Added 6.02 6.48 6.41 6.17 6.27 6.39 6.26 6.21 5.61 5.92 Added /10
Average 1.00 1.08 1.07 1.03 1.05 1.07 1.04 1.04 0.94 0.99 10.29 1.03
(Fame, 2022)
 Appendix
Appendix H – Benchmark for ROCE

ROCE
BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 6.53 2.23 4.69 3.75 1.22 6.04 4.1 7.2 1.92 5.13
BARCLAYS 5.55 5.99 2.62 4.57 4.42 4.02 2.46 4.16 0.15 8.52
LLOYDS 12.58 8.21 8.7 7.04 2.7 1.69 4.18 1.08 -0.18 -0.34
NATWEST -18.04 7.91 5.54 3.89 -4.55 -3.64 4.18 -9.13 -6.84 -0.72
STANDARD
8.43 5.39 3.75 3.5 0.82 -2.14 6.01 12.77 14.65 11.46
CHARTERED
SANTANDER 3.66 6.15 9.18 8.68 8.93 4.58 9.36 8.24 8.69 3.2
Added 18.71 35.88 34.48 31.43 13.54 10.55 30.29 24.32 18.39 27.25 Added /10
Average 3.12 5.98 5.75 5.24 2.26 1.76 5.05 4.05 3.07 4.54 40.81 4.08
(Fame, 2022)
 Appendix
Appendix I – Benchmark for Return on Shareholder Funds

Return On Shareholder Funds

BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 6.82 -1.39 7.34 5.45 2.19 7.92 5.41 10.18 3.17 10.01
BARCLAYS 5.73 6.15 2.7 4.82 6.5 4.43 3.62 4.73 0.16 9.62
LLOYDS 13.13 10.23 12.24 9.91 3.99 2.92 4.69 2.04 -0.98 -3.03
NATWEST -18.02 9.72 5.97 4.63 -8.4 -5.06 4.62 -14.03 -7.58 -1.02
STANDARD CHARTERED 8.68 7.37 5.09 4.69 0.85 -3.16 9.12 13.11 15.16 16.64
SANTANDER 3.84 6.38 9.91 11.32 12.03 8.66 9.86 9.1 9.51 9.96
Added 20.18 38.46 43.25 40.82 17.16 15.71 37.32 25.13 19.44 42.18 Added /10
Average 3.36 6.41 7.21 6.80 2.86 2.62 6.22 4.19 3.24 7.03 49.94 4.99
(Fame, 2022)
 Appendix
Appendix J – Benchmark for Net Asset Turnover

Net Asset Turnover

BM 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
HSBC 0.45 0.33 0.4 0.31 0.28 0.38 0.38 0.71 0.39 0.36
BARCLAYS 0.37 0.31 0.4 0.39 0.27 0.46 0.35 0.53 0.52 0.61
LLOYDS 0.43 0.51 0.38 0.31 0.29 0.38 0.75 0.63 0.22 0.1
NATWEST 0.32 0.29 0.26 0.26 0.17 0.23 0.3 0.29 0.35 0.36
STANDARD CHARTERED 0.4 0.36 0.35 0.31 0.4 0.29 0.35 0.54 0.57 0.41
SANTANDER 0.36 0.44 0.44 0.35 0.38 0.28 0.55 0.62 0.7 0.23
Added 2.33 2.24 2.23 1.93 1.79 2.02 2.68 3.32 2.75 2.07 Added /10
Average 0.39 0.37 0.37 0.32 0.30 0.34 0.45 0.55 0.46 0.35 3.89 0.39
(Fame, 2022)