Introduction Banking success is all about sustained profitability through the application of robust scientific investments and gap management strategies. It is imperative for banks to keep a close watch on the interest rate cycle: if rates are rising they have to ensure that their lending rates rise alongside or before the borrowing rate and vice versa. The premier position that Barclays enjoyed in the financial industry for over 3 centuries is a validation of the fact that it was built on the strong principles of finance. However, the last couple of decades have seen an erosion in its reputation due to the breaching of those very principles. Barclays Bank is one of the biggest British multi-national banks headquartered in London with a …show more content…
Barclays of the future, according to their chief executive Antony Jenkins, will be a focused international bank with four core businesses, namely Personal and Corporate, Barclaycard, Africa, and Investment Bank. Each core business will be balanced and strive to win in its field of operation. This paper will investigate several theoretical financial principles and their applications by Barclays. Special emphasis will be on Investment Banking and Wealth management services of the bank. These are the divisions in Barclays that handle markets and are involved in the trading of stocks, bonds, commodities, forex, interest rates and market indexes. Trading in derivatives is commonly employed by Barclays to hedge risks, but we will see that the fund managers in the last decades exposed the bank to risks by indulging in huge speculative investments. Let us investigate a few financial principles now. Capital Assets Pricing Model (CAPM) CAPM is a highly acclaimed theory of risk and return for securities in a competitive capital market. The path breaking theory won Sharpe and Markowitz the Nobel Memorial Prize in Economics in 1990. CAPM establishes the beta coefficient as a measure of the systematic risk of an asset. Systematic risk is also known as market risk. This risk cannot be eliminated nor is it controllable. Unsystematic risks include the risk that influences a single company or a small group of companies, and it is controllable and can be mitigated through
CAPM results can be compared to the best expected rate of return that investor can possibly earn in other investments with similar risks, which is the cost of capital. Under the CAPM, the market portfolio is a well-diversified, efficient portfolio representing the non-diversifiable risk in the economy. Therefore, investments have similar risk if they have the same sensitivity to market risk, as measured by their beta with the market portfolio.
Plastic bags begin as crude oil, natural gases, or other petrochemical derivatives. By some estimates almost 12 million barrels of petroleum oil are used to make 100 billion plastic bags. One solution is to stop using plastic bags. Plastic bag bans are spreading across the country with over 100 community bag bans across 16 states. Hawaii right now is the only state in the nation to adopt a full statewide ban. Internationally,19 countries from Bangladesh to Ireland have passed bans. Reducing plastic bag usage and shoppers to use reusable bags will help decrease our demand for a new fossil fuel and reduce our environmental impact. As a nation we need to begin to move away from the concepts of single use and waste. Plastic is made from oil.
Investors hold diversified portfolios : One of the assumptions of CAPM model is that investors are holding only portfolios which are subjected to systematic risk , the unsystematic risk can be ignored , therefore the unsystematic risk has been ignored (Lakonishok & Shapiro , 1986)
This report compares financial performance of two major banks of UK i.e. HSBC Bank Plc and Barclays Bank Plc on the basis of their Balance sheets and profit and loss accounts for the year 2009. This report also provides SWOT analysis of both banks i.e. HSBC and Barclays Bank Plc and provides an insight into their Banking Strategies.
Even though there are flaws in the CAPM for empirical study, the approach of the linearity of expected return and risk is readily relevant. As Fama & French (2004:20) stated “… Markowitz’s portfolio model … is nevertheless a theoretical tour de force.” It could be seen that the study of this paper may possibly justify Fama & French’s study that stated the CAPM is insufficient in interpreting the expected return with respect to risk. This is due to the failure of considering the other market factors that would affect the stock price.
According to group´s performance from 2002-2006 identifies that Barclays´ performance underpinnings are represented by its strategy of acquiring other banking (such as ABN Amro and Banco Zaragozano) concerns to expand its retail as well as other banking services through representation in international markets as represented by the bank’s presence in 60 countries. This provides Barclays with the means to sell its highly profitable investment banking services as well as be positioned to service the cadre of multinational companies that utilize its diverse banking financial service packages.
3a) Identify Barclays Bank’s current strategy i.e. market entry, substantive growth, limited growth, retrenchment etc. and explain why it is an appropriate and justified strategy for the business.
At the preschool level, biting and hitting is quite common, but the first thing we as educators need to do is “Stop the Behavior Immediately” (Laureate, 2015) Next have the “offender put an ice pack on the child who is bitten, this builds empathy.” (Laureate, 2016) Honestly, this shocked be because in the districts I have worked in the child bitten was immediately taken to the school nurse. Dr. Gootman also states, “We want to give the child responsibility for the child they hurt.” (Laureate, 2016) yet to me will this young child truly understand at the young age of 3 or 4 years old what they did?
During the volatile and instable period, the risk was obviously brought to a new level. Morgan’s Private Bank kept their eyes open all the time. I concluded two main aspects.
Barclay’s over its long history has grown into one of the largest financial groups in the United Kingdom3. Since there early start in banking, Barclays has since then diversified itself into investment banking, and investment management as well. They operate over 850 branches in over 60 countries in which 2000 are based in the United Kingdom3. “The company has over 4.5 million registered online bankers and over 10.6 million Barclaycard customers in the United Kingdom”3. Barclay’s is currently the 7th largest bank in the world with assets valuing $2.41 trillion.
Threats alternatives : Barclays Bank Provided products different from the rest of the banks that offer similar products in order to maintain the survival of the bank at the forefront among its competitors , by providing securities fixed income , mutual funds and insurance , in contrast there is a significant threat to Barclays Bank in sustainability with the existence of institutions Non-banking that provides financial services Such as that provided by the
However, Barclays shifted the group’s international ambitions at that time. It had the intention to become a major global bank, by moving away from its legacy in retail banking, but offering Foreign Exchange (FX), broking, corporate finance and investment management services worldwide. In the last decade of the 20th century Barclays developed its two-pillar strategy of international expansion: expansion in the markets of developed economies and emphasis on investment, rather than on retail banking. Regarding the Asian market, Barclays was devoted to the narrow product-service offering. In Singapore it was offering investment banking services solely, while in Australia it was engaged in lending to small-and medium-sized
As the title of the article elucidates, the author’s purpose for writing this article was to expose and clarify the inherent risks associated with banking and financial sectors of the economy. People over all have the tendency to be protective of the thing they have earned, money is not different. As the general public’s knowledge of finance and general investing is, for the most part, limited, they will, at one time or another, trust their earnings to a financial institution. The author defines
Further, Government intended to reform Barclays management and operation, but Middle Eastern focused on the opportunity to profit. Therefore, it is wise to accept Middle Eastern offer. Lastly, cooperating with Middle Eastern investors might lead Barclays expend to Middle Eastern area and increase commercial opportunities.
As part of Barclays customers are more valuable assets, as one of the goal for Barclays is that they want to be the ‘Go-to’ bank for customers and client within the next five years, this is done by having a sustain forward momentum. Furthermore, having an essential banking service that customer need across the sector, region and around the