SBI SWOT Analysis

1. SBI SWOT Analysis by
Naushad S Talukdar
Threat
Deregulation of Saving Bank Rate
As RBI had deregulated saving bank rate because of these private sector bank has increased
saving bank rate, so customer will be more attracted towards private bank.
External factor
High fuel price, power prices etc. are also hurting SBI, since the banks lend to all segments,
this will effect SBI. The point is, in context with huge lending to kingfisher where SBI was
the biggest lender.
Increased Competition from Private bank
Customer prefer to switch to private banks and financial service providers for loans and
mortgages, as SBI involves strict verification procedure and take long time for processing.
The scenario is opposite in case of private bank, private bank has better management and
faster processing times than SBI. Their DSA’s have strict sales target every month and hence
move faster to improve their performance. SBI employees are not bothered about this.
The way private banks deals with their customer has made banking easier and less torturous.
Instead of customer standing in queues at banks, the private banks started service to the
customer at their doorsteps.
According to Kotak securities, Private bank saw a rise in their market share from 14.9% to
17.8%.Their share in overall saving accounts increases from 11% in 2005 to 16% in 2011.
Employee Strike
In 2006 April there was a 7 days strike costs huge loss for SBI. (Rs. 55000 crore loss in MP,
Chattisgarh) strike was because of pension hike. During that time the government of U.P has
transferred its account to Allahabad bank, while Government of Maharastra was also in the
process to do so.
Venturing into Rural and Semi-Urban sector
Private bank has started venturing into rural and semi urban sector which used to be the
bastion of the SBI and other PSU banks.
According to RBI data, in 2012 no. of SBI branches increased by 4.9% whereas total no. of
bank branches increases by 6.6% in rural area. In case semi-urban, SBI branches increased by
3.44% whereas total no. branches increased by 11.11%.

2. SBI SWOT Analysis by
Naushad S Talukdar
Weakness
-Private Banks came with a great advantage from day one as they had core banking unlike
SBI or public sector bank. Whereas SBI had to transform their system into core banking for
this new skilled man power will be required.
- SBI has the highest Non-Performing Asset or NPA in the Industry. SBI’s NPA constitute
one third of gross NPA of all listed banks put together.
- In spite of modernization bank still carries the perception of traditional bank to new age
customer.
-Based on RBI data a research was conducted by ________________ to find the multiple
decision-making units efficiency point which was published in mbaskool.com. Following
factor were considered to find the multiple decision-making units efficiency point
-
-
Where SBI ranks 4th, Yes bank got the 1st position.
RBI has the largest no. of employee in the industry (more than 2lakh).Bank spends huge
portion of income on employee wages & salaries. Their wages accounted for 18.86% of the
bank’s total expenses. While the industry average was 14.83% during 2009-2010.
Business per employee of SBI is 6.36 crore against industry average of Rs. 8.373. In
contrast, business per employee of ICICI bank stood at 10.29 crore, while Axis Bank’s 11.11
crore HSBC bank’s 11.35 crore and Citi bank’s per employee contribution was 19.7 crore
during 2009-2010.
Opportunities

3. SBI SWOT Analysis by
Naushad S Talukdar
-Merger with five banks namely State bank of Hyderabad, state bank of Patiala, State bank of
Bikaber as Jaipur , state bank of Travancore and state bank of Mysore are in approval stage.
Merger will result in expansion of market share to defend its no. one position. As SBP
posted 87% growth in profit SBBJ’s profit groth is 311% while SBT & SBH 30% nd 18%
respectively. Moreover 5 associates banks has 6% market share in loans & deposits etc.
- Since the bank is yet to modernize few of its banking operations, there is a better scope of
using advanced technologies and software to improve.
- SBI attracts most talented pool of graduates in the industry, for 2013 PO exams 17
Insurance lakh student appeared. So chances are high that they will offer better customer
service in innovative way.
-Recently Government allowed insurance company to use banks distribution channel,
because of its vast distribution SBI can attract most of the insurance company and service
will not free of cost so new way of revenue generation.
-Good inflow from overseas operation: SBI has 150 offices in 32 countries which contribute
14-15% in net profit.
Strength
Wide distribution Network
SBI has more than 27000 ATM and SBI group i.e. including associate banks has about
45,000 ATM whereas total no. of ATM as on October are 104500. As on June 2012,SBI has
14127 branches and SBI group i.e. including SBI associates bank’s 21,500 branches as on
March 2012 where total no. of bank branches in India are 90732 . SBI has become the first
bank to install an ATM at Drass in the Jammu & Kashmir Kargil region.
Market leader
SBI has 20% market share in deposits and loans among Indian commercial banks. SBI
controls 22.35% in business as on RBI. SBI life stood at the no. 1 position with a market
share of 19.8% in private insurance business as of May 2011.
Government owned: Government owns 60% stake in SBI, this gives SBI an edge over private
banks in terms of customer security. They are automatically immune from failure because
they have access to Central Government support.

4. SBI SWOT Analysis by
Naushad S Talukdar
SBI has the first mover advantage in commercial banking service: SBI has started its
operation in very early stage. It acquire customer when there was very less competition or no
competition.
Brand Name: SBI bank has earned a reputation in the market over the period of time.