In a previous article, we had done a detailed SWOT Analysis of one of the toughest contenders in the private banking sector, HDFC. This time, we will tackle the SWOT Analysis of Bandhan Bank – In-depth.
9th best private bank – Bandhan Bank is an Indian Banking and Financial Services Company. It all began in 2000 when Bandhan made history by growing into a bank that serves all socio-economic sections across the country. Bandhan Bank has truly expanded but its mission remains the same-to build a new and financially inclusive India.
Another aspect that made Bandhan Bank the giant it is now, is its marketing efforts. As the world goes online, marketing is changing and if you are interested in learning about the latest check out our free Masterclass on Digital Marketing 101 by the CEO and founder of IIDE, Karan Shah.
Do you want to learn how Bandhan bank became so successful in the banking industry? In this blog, we will learn about the SWOT Analysis of Bandhan Bank and decode the answer, Before we begin, let us learn more about Bandhan Bank, its founding, products, financial status and competitors.
About Bandhan Bank
(Chandra Shekhar Gosh – The Founder of Bandhan Bank)
Bandhan Bank Ltd. is an Indian banking and financial services company established in the year 2015 after the Reserve Bank of India granted the universal banking license to Bandhan Bank. The bank is headquartered in Kolkata, West Bengal. Bandhan Bank is present in 34 out of 36 states and union territories of India, with 5,618 banking outlets and more than 2.43 crore customers.
It all began in 2001 when Chandra Shekhar Ghosh observed the plight of Kolkata’s small-time traders. To grow their business, they had no option except high-interest loans from traditional moneylenders. His deep desire to help them led to the creation of Bandhan, a microfinance institution providing loans and hope to the poorest. Bandhan Bank provides customers access, to simple, cost-effective and innovative financial solutions courteously and responsibly.
|Founder||Chandra Shekhar Gosh|
|Origin||Kolkata, West Bengal, India|
|No. of Employees||48,252|
|Market Cap||Rs 51,406 Crore (2021)|
|Annual Revenue||Rs 7,800 Crore (2021)|
|Net Income/ Profit||Rs 859 Crore (2021)|
Products & Services By Bandhan Bank
Bandhan Bank has been in the banking industry for more than 7 years and deals in:
- Banking, commodities
- Credit cards
- Mutual funds
- Mortgage loans
- Equities trading
Competitors of Bandhan Bank
Top 5 competitors of Bandhan Bank:
- HDFC Bank
- Axis Bank
- Kotak Mahindra Bank
- ICICI Bank
- IDBI Bank
Now that we know the company’s background, let’s further look at the SWOT analysis of Bandhan Bank.
SWOT Analysis of Bandhan Bank
A SWOT analysis infers a company’s strengths, weaknesses, opportunities, and threats in comparison to its competitors. It’s an impressive tool for assuming where the firm grows and where it sputters and determines how the organization may broaden. So, let’s look at the SWOT analysis of Bandhan Bank.
To better understand the SWOT analysis of Bandhan Bank, refer to the infographic below:
Let’s proceed further with expanding on the strengths of the Bandhan Bank from the SWOT analysis of Bandhan Bank.
Strengths of Bandhan Bank
Strengths are the Bandhan Bank capabilities and resources that it can leverage to build a sustainable competitive advantage in the marketplace.
- Nation Presence: Bandhan bank has a strong distribution network with countless outlets in more than 34 states in India. Bandhan Bank, which nearly started with 501 branches and 50 ATMs in its founding year, today hit another milestone of operating more than 5000+ banking outlets.
- Minimal Cost Structure: As we know that Bandhan bank previously started as a not-for-profit enterprise providing microloans to the underprivileged sections of society. It started barely with a minimal cost structure and today has a solid financial position, which gives it a bit of advantage over the opposition.
- Financial Position: Bandhan Bank has a solid financial position with positive benefits revealed this year i.e. 2022 compared to previous year i.e. 2021 which marked a 35.7% year on year jump in company’s net profit. One of the reasons behind such succession of banks is it having a solid resource base.
- A Strong Workforce: A strong workforce is always the reason behind the great success of any organization. It has a talented work force of more than 55,000+ employees that are profoundly qualified, creative and enhanced in their field of areas.
- Mergers and Acquisitions: In a very small period Bandhan Bank became so successful that it started merging and acquiring popular firms just like recently in 2019 Bandhan Bank acquired Gruh bank which was backed by HDFC bank.
- Competitive Interest Rates: To draw clients, Bandhan Bank maintains its fees at competitive rates. To support the small industries, the interest rates on MSME and agricultural loans, as well as service fees, are kept modest depending upon the economic climate of the country.
- Customers as Main Priority: They emphasise providing benefits to customers. Bandhan Bank main motive is customer satisfaction that’s why Bandhan Bank comes up with effective financial solutions and home loan services.
Weaknesses of Bandhan Bank
Weaknesses of Bandhan Bank can either be the absence of strengths or resources of capabilities that are required but at present, the organization doesn’t have.
- Rental Branches: Bandhan Bank most of the branches are on rental basis. A high extent of property being used by Bandhan Bank is on lease and rental charges should be paid.
- Innovation: Bandhan Bank competitors are ahead in terms of releasing new innovations and the reason could be the competitors being the oldest players in the market. Bandhan Bank should look over its spending on innovative work as compared to the opposition.
- Use of Digital in Rural Area: The use of the digital mode of banking and other finance-related works is not known by many rural peoples.
- Lagging Behind Many Banks In Capital Structure: Though Bandhan Bank is one of the largest banks in the country, its competitors are moving forward than Bandhan Bank in terms of capital structure.
- Few No. of Branches as Compared with the Leading Banks: Many of the leading competitors of Bandhan Bank are expanding rapidly to capture more of the market cap but in terms of expansion, Bandhan Bank is working slowly.
Opportunities for Bandhan Bank
Opportunities are potential areas where the firm can identify potential for – growth, profits, and market share.
- Population Growth: The exponential expansion in the population, and especially in the prevailing or potential customer sectors is a great growth chance for the business organization. The shifting of customer needs, tastes, and preferences can work as an opportunity if the business organization has favourable market knowledge.
- Aggressive Use Of Social Media: The emergence of e-commerce and social media marketing as a fashion can be a great opening for Bandhan Bank if it can assure strong online existence on different social media networking sites.
- Government Subsidies: Development in ecologically agreeable items and administrations just like Bandhan Bank who is working on the sustainability of underprivileged sections of society are getting government offerings of subsidies on these.
- Interest Rates: Reduction in the interest rates make fundraising and financing at lower cost simpler for the business organization.
- Global Presence: Many of Bandhan Bank’s competitors are expanding globally. To increase their customers globally, it’s the best chance for Bandhan Bank to expand their market.
Threats to Bandhan Bank
Threats are factors that can be potential dangers to the firm’s business models because of changes in macroeconomic factors and changing consumer perceptions. Threats can be managed but not controlled.
- Amendments in Regulations: The changing regulatory framework and preface of different stricter regulations assess a major threat to the Bandhan Bank. It makes adherence to legal standards more complicated for the business organization. Incapability to adjust to changed regulations increases the risk of expensive lawsuits.
- Private Sector Banks are Increasing Its Competition: Private sector banks are developing novel investment packages and thereby gaining market share among retail consumers.
- Economic Crisis: As a result of the economic crisis, clients are not saving money in banks, reducing bank liquidity and making it difficult to operate efficiently.
- Changing Policies: Banking policies are governed by Reserve Bank of India (RBI) laws and regulations, therefore any changes made by the RBI have a direct impact on the bank’s operations.
- External Factor: The climb in inflation increases the cost of production and influences business profitability.
- Poor Economic Conditions: The deteriorating economic conditions affect business execution when they directly affect the customers’ spending habits and purchasing power.
This ends our study on the SWOT analysis of Bandhan Bank. Let us conclude our learning below.
The Banking Industry is one of the fastest-changing and growing industries in the world. Bandhan Banks are adopting new technologies to increase their business. They have also contributed in general to the world’s economic growth.
With increasing competition in a saturated market such as banking and financial service, companies are left to battle it out by winning over their customers with better marketing efforts. In a changing landscape where digital marketing is of utmost importance, being well versed in the field is a must for all marketing enthusiasts. If you are interested in learning more and upskilling, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
We hope this blog on the SWOT analysis of Bandhan Bank has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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