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Comprehensive SWOT Analysis of NatWest – One Of The Big 4 Clearing Banks In The UK

by | Case Studies | 0 comments

In our previous blog, we conducted a SWOT analysis of Barclays – arguably one the most powerful transnational corporations in the world. In this blog, we will be discussing the detailed SWOT analysis of NatWest.

National Westminster Bank is one of the UK’s four big clearing banks. In 2017, it was honoured as the Best Banking App in the British Bank Awards. Before the financial crisis in 2008, for a brief period, this group was one of the largest banks in the world. However, post this period, the bank’s ranking fell sharply and it had to be bailed out by the UK government. Today, the government holds and manages a 54.7% stake in this bank.

Today, NatWest has adapted to the growing digital world and has created a strong social media presence for itself. Digital Marketing is very important for the growth, development and expansion of businesses today. If you want to know more about digital marketing, check out IIDE’s Free Masterclass for Digital Marketing by the CEO and founder of IIDE, Karan Shah.

Want to know more about NatWest and how it got to where it is today? Before we dive into the SWOT analysis of NatWest, let’s first understand its history.

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About NatWest

SWOT Analysis of NatWest - Natewest ATM and Bank

NatWest came into being in 1970 by the merging of three well-known banks of the time: Westminster Bank, National Provincial Bank and its subsidiary District Bank. In 2000, through a 21 billion dollar deal, the Royal Bank of Scotland acquired NatWest – this was the biggest deal in British history at that time. This group continued to grow and operated several other banking brands. However, after the economic downturn in 2008, the RBS became highly vulnerable and became partially owned by the government. The group’s name was changed to NatWest.

Today, NatWest has over 3400 cash machines all over the UK and 960 branches to serve nearly 7.5 million customers and 850,000 small business accounts. In 2019, NatWest reported a profit of 1,326 GBP million in comparison to the 3,526 million GBP in 2018. This decrease can be attributed to impairment losses and an increase in operating expenses. 

With assets worth  £799.491 billion and equity of £43.824 billion as of 2020, it can be said without a doubt that NatWest is an integral part of the British economy. The group has a net worth of $32.27B as of November 30th, 2021. In addition to having a primary share listing on the London Stock Exchange, it is also listed on the New York Stock Exchange.

 

Quick Stats on NatWest
Chairman Sir Howard Davies
Year Founded 1968
Origin United Kingdom
No. of Employees 59,900 (2020)
Company Type Public
Market Cap $ 35.94 Billion (2021)
Annual Revenue £10.796 Billion (2020)
Net Income/ Profit £0.434 Billion (2020)

 

Services by NatWest

As one of the largest groups in the UK, with several subsidiaries, NatWest offers a range of services:

  • Finance and insurance
  • Retail banking
  • Corporate banking
  • Investment banking
  • Private banking
  • Mortgages
  • Credit cards


Competitors of NatWest

Being such a large group providing numerous services, NatWest has competition from several other companies. These include:

  • Barclays
  • HSBC
  • Lloyds Bank
  • Standard Chartered
  • Nationwide Building Society


With this brief overview, we hope you have a general idea of NatWest. Now without further delay, let’s begin with the SWOT analysis of NatWest.


SWOT Analysis of NatWest

Through SWOT analysis, one can gain insight into the functioning of a company by studying its strengths, weaknesses, opportunities and threats. This can help identify what factors affect a company’s functioning and how this can be improved upon. SWOT-analysis helps us create realistic forecasts of sales based on market conditions and also identify whether assistance from outside professionals in legal, marketing and financial domains is required.

To better understand the SWOT analysis of NatWest, refer to the infographics below:

SWOT Analysis of NatWest - SWOT Infographics of NatWest

Below is a step-by-step detailed guide to help you with the SWOT analysis of NatWest.

Strengths of NatWest

NatWest has several strengths which have helped them establish itself as one of the biggest groups in the UK.

  • Mortgage Plans: It offers 80 different mortgage plans to its customers which last for two, three, five, or 10 years with impressive interest rates as compared to other banks.
  • ATMs and Branches: NatWest serves around 7 million customers through its network of 3,400 cash machines and 1,600 branches. A large number of outlets ensure that NatWest’s services are available to a large number of people.
  • Capital Expenditure: For 5 consecutive years (pre-2020), NatWest has earned continuous profits. With the successful execution of new projects, NatWest has generated good returns on capital expenditure and has built new revenue streams.
  • Employee Orientation: The significant and effective systems of learning and training their employees by professional trainers. NatWest spends heavily on the recruitment and the development of its employees, contributing and looking for a workforce that is highly trained and driven to bring great evolution.
  • Digital Marketing Strategy: NatWest online presence on every social media site is used to build customer relationships. Want to know how social media works as a strength for NatWest? Then you must check out the benefits of social media marketing to get the answer to your query.


Weaknesses of NatWest

With its strengths, there are also weaknesses. So let’s try understanding what are NatWest’s drawbacks.

  • Takeover and Acquisitions: Once NatWest was Britain’s profitable bank but in 2000 Bank of Scotland acquired NatWest at £21 Billion bid, leaving NatWest bank delisted from Britain’s top profitable banks. It now runs as a normal bank with its banking licence.  
  • Controversies: Over the past few years, NatWest has been subject to allegations of money laundering and internal audits which have damaged brand image.
  • Weak Financial Position: NatWest’s financial position in terms of annual revenue and net income has weakened post-2020, its debt in proportion to its loan stock portfolio is increasing.
  • Customer Service: NatWest customer services are worst in managing customers but also the employees of their customer service management feel that they aren’t treated well, wealth insurance is not given and they are expected to work for long hours.
  • Cannot Face Challenges: When it comes to facing challenges by the new entrants in the market, NatWest has not been able to tackle the situation and lost a small market share in the niche categories. NatWest highly needs to build an internal feedback mechanism directly with its sales team to deal with such challenges.
  •  


Opportunities for NatWest

With changing global trends, several opportunities have opened up for NatWest. Let’s have a look at some of these:

  • Work on Building Strong Position: Currently, NatWest position in the banking sector is not up to the mark as compared to other banks in the UK. Working on building a strong position will help NatWest to outperform competitors during an economic downturn and build a strong reputation for being one of the safest banks for depositors to invest in. 
  • Demographics: The population is always growing and it always shows a positive rate in the coming future. It helps the companies to create new target markets for their products and services.
  • Technological Advancement: Technology has boosted the economy in many ways. It helps in automating the processes to reduce cost. It brings numerous benefits to many departments. One major benefit of technology is better data collection and market research.
  • Expanding to Cities & Countries: Developing business sectors offer the bank openings for additional development. Working in new geological areas is likewise worth investigating.


Threats to NatWest

NatWest also has several threats which could serve as a hurdle to their performance.

  • Allegations of Money Laundering: In December 2021, Barclays paid £264.8 million to settle the allegations of money laundering, violating and disregarding worldwide illegal tax avoidance laws.
  • Shutdown: After the collapse and financial losses in 2008, NatWest is facing challenges to maintain its position in the market. In the UK, the bank is recognized as the worst bank and fraud. If such controversies and allegations continued will no longer take NatWest to get shut down completely.
  • Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages which are being sent by competitors. It clutters up the space, which leads to losing out on customers. NatWest is trying to adopt a variety of the latest digital marketing skills to get ahead of the competition. You must also check out these skills to achieve the same.  
  • Competitor Technical Advancements: New technological advancements by a few competitors within the sector constitutes a threat to NatWest since customers who are drawn to this new technology may switch to competitors, reducing NatWest’s overall market share.
  • Other Issues: Growing credit issues, financial losses and unethical behaviour among the banks and financial institutions may lead to a shrink in the pool of prospects and customers.


This brings us to the end of our SWOT Analysis of NatWest. By understanding all facets of the company’s workings and the factors affecting them, plans can be made to improve business.

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To Conclude

NatWest has to maintain its reputation and hold the market’s interest, it becomes prudent to evolve with the changing environment. They must adapt to the constantly shifting global market and improve on their financial planning to move ahead of their competition. 

Another problem they face is being subject to several allegations which affect their brand image. They are threatened by several emerging competitors. That being said, NatWest also has several opportunities to improve themselves by implementing proper strategies to increase profits and enhance brand image.

Using social media as a platform to promote themselves is an excellent way to grow their customer base. With the advent of technology, the world today has seen growth in the field of digital marketing. The skills learnt from this new subject of study are very important in this day and age and should become an integral part of one’s skillset. If you are interested to know more about this field and wish to upskill yourself, check out the 3 Months Advanced Digital Marketing course to know more.

We hope this blog on the SWOT Analysis of NatWest has given you a good insight into the company’s strengths, weaknesses, opportunities, and threats. 

If you enjoy in-depth company research just like the SWOT analysis of NatWest, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and please leave your thoughts in the comments box below about this case study of the SWOT analysis of NatWest.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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