This Macro Business environment analysis is prepared for HSBC UK and for UBL of Pakistan. The analysis concentrates on a comparative statement of the different environment both organisations compete in.
HSBC is the market leader in UK with market capitalization US$172 billion at 31 December 2003, while UBL is the second largest bank in Pakistan assets of over Pak Rs. 190 billion. HSBC is established in 79 countries with 9500 branches of the world while UBL operates mainly with in Pakistan with 1100 local and only 11 international branches. (www.hsbc.co.uk),(www.ubl.com.pk)
An analysis of macro and competitive factors revealed a number of threats and opportunities for both bank and we have found that UBL is operating is more vulnerable market.
HSBC's operational efficiencies, internationally proves strength with strong financial position in international market and other competitive advantages provide it with a very strong position to further improve their financial performance to achieve their strategic goals.
Effects of External Environment
Economic Factors Affecting HSBC & UBL
Current Economic Indicators of UK& Pakistan
Economic Indicator UK
GDP 2.7% 5.1%
Inflation 1.2% 3.9%
Balance of Payments current account - BoP (ÃÂ£ billion) -5.2%
GDP per capita 25000$US 2000$US
Unemployment 4.8% 7.8%
Interest Rate 4.0% App 7.0% App
British pound 1 British Pound=1.8 US$ 1 PKR. = 0.017
* Source: National Bureau of Statistics UK & Yahoo Finance & CIA world fact-book
"The two most studied economic problems in banking are interest rates and exchange rates, which are important to our large corporate (company) customers." (Geoffrey Lipscombe, 1994 P5) "If the inflation rise, the government may increase interest rates to curtail the excess domestic demand. This increase in interest rates often attracts foreign investors, who buy the currency, for short-term investment, and thus increase exchange rate." (Geoffrey...