SWOT analysis of Bank of Baroda (BOB)
This is a detailed SWOT analysis of Bank of Baroda (BOB). It aims to analyse the strengths and the weaknesses of Bank of Baroda (BOB). It also aims to explore the opportunities and the threats facing the bank. Bank of Baroda is an Indian multinational banking and financial services company, headquartered in Baroda, Gujarat, India. It was founded by the Maharaja of Baroda (Maharaja Sayajirao Gaekwad III) in 1908.
Strengths of Bank of Baroda (BOB)
Bank of Baroda is an Indian state-owned institution. It was nationalised by the Government of India in 1969. It operates across 21 countries and serves 127 million customers (Bank of Baroda, 2019). It has over 9,500 branches, and 13,400 ATMs in India. In fact, it is the second-largest public sector bank after State Bank of India (The Economic Times, 2019).
The service portfolio of Bank of Baroda is quite extensive. Its main services are categorised as retail banking, corporate banking, remittances, and wholesale banking. Savings account, current account, home loan, personal loan, car loan, education loan, fixed deposit, recurring deposit, credit card, debit card, mobile banking, and the Internet banking are some of the services provided by the bank.
The merger of Vijaya Bank and Dena Bank into Bank of Baroda in April 2019 has given Bank of Baroda a mega bank status. It has also strengthened the position of the bank in India with a balance sheet size of over Rs 15 lakh crore — with deposits worth of Rs 8.75 lakh crore and advances worth Rs 6.25 lakh crore (The Economic Times, 2019). The merger should help the bank improve its customer base and compete efficiently at the global level.
Weaknesses of Bank of Baroda (BOB)
Though Bank of Baroda is an international bank, its most focus is on its home market, India. This over reliance is a weakness and may turn out to be costly for the company should there be any massive economic challenges affecting the Indian economy.
A technical glitch in 2017 caused thousands of accounts of Bank of Baroda’s customers to be wrongly debited. The money was debited in the form of various bank charges (Times of India, 2017). The bank’s migration to a new version of the core banking system was blamed for the glitch; however, it should be noted that it created panic among thousands of customers and affected the image of the bank. The bank was also caught up in an alleged Rs 6000 crore forex scam in 2015.
Opportunities for Bank of Baroda (BOB)
Bank of Baroda can grow further in India by opening new branches or taking over smaller banks and or other financial institutions. It is currently operating across 21 countries; and therefore, opening new operations in more countries and territories is worth exploring.
There have been huge changes in consumer behaviour in India over the years. Adult Indians carry out financial transactions more through their bank accounts than through cash. Four-fifths of Indian adults have opened bank accounts by 2017 (The Economic Times, 2018). This is a good expansion opportunity for Bank of Baroda.
Threats to Bank of Baroda (BOB)
Threat is the last element to address in the SWOT analysis of Bank of Baroda. Bank of Baroda faces a number of strong competitors in the Indian market such as State Bank of India, Punjab National Bank, ICICI Bank, Union Bank of India, Canara Bank, IDBI Bank, Syndicate Bank, and Allahabad Bank to name but a few. It also competes with big global banking brands in its international markets.
Legal threats may turn out to be costly and challenging for Bank of Baroda. For instance, the bank was fined ₹11 million (equivalent to US$837,000) in 2017 by the South African Reserve Bank (SARB) for allegedly not complying with international money laundering regulations. Due to this and other challenges, Bank of Baroda announced its exit from South Africa.
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Last update: 23 December 2019
Bank of Baroda (2019) About us, available at: https://www.bankofbaroda.in/about-us.htm (accessed 05 December 2019)
The Economic Times (2019) What India’s new mega bank means for banks & customers, available at: https://economictimes.indiatimes.com/industry/banking/finance/banking/what-indias-new-banking-behemoth-means-for-banks-customers/articleshow/68671033.cms?from=mdr (accessed 10 December 2019)
The Economic Times (2018) Number of adult Indians with bank accounts rises to 80%, available at: https://economictimes.indiatimes.com/industry/banking/finance/banking/number-of-adult-indians-with-bank-accounts-rises-to-80/articleshow/63838930.cms (accessed 10 December 2019)
Times of India (2017) Tech glitch triggers panic among BoB depositors, available at: https://timesofindia.indiatimes.com/city/vadodara/tech-glitch-triggers-panic-among-bob-depositors/articleshow/60149900.cms (accessed 12 December 2019)
Photo credit: Times of India
Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.