Changing Face of State Bank of India: Strategic Priorities in Maintaining Market Leadership

            
 
Case Studies | Cases in Business, Management, Cases | Case Study

ICMR HOME | Case Studies Collection

Case Details:

Case Code : BSTR411
Case Length : 17 Pages
Period : 2006-2012
Pub Date : 2012
Teaching Note :Not Available
Organization : State Bank of India
Industry : Banking
Countries : India

To download Changing Face of State Bank of India: Strategic Priorities in Maintaining Market Leadership case study (Case Code: BSTR411) click on the button below, and select the case from the list of available cases:

Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies


Buy With PayPal

Amount to be paid:



Prefer to pay in another currency ?
Select Currency for Payment



Exchange Rates: Click Here
Delivery Details: Click Here

Price:

For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

» Business Strategy Case Studies
» Case Studies Collection
» Business Strategy Short Case Studies
» View Detailed Pricing Info
» How To Order This Case
» Business Case Studies
» Area Specific Case Studies
» Industry Wise Case Studies
» Company Wise Case Studies

Custom Search


Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



Chat with us

Strategic Management Formulation, Implementation, & Control, 12e

Please leave your feedback

Leave Your Feedback

ICMR India ICMR India ICMR India ICMR India RSS Feed

<< Previous

"One critical factor to look out for is whether the bank again loses momentum and goes back to its slow legacy banking-that will be quite negative."

-Saikiran Pulavarthi, an analyst at Espirito Santo Securities Ltd1 , January 2012.

In November 2011, HDFC Bank Ltd2. dethroned State Bank of India (SBI) in terms of market capitalization. HDFC Bank's market cap was Rs.3 1.1 trillion - almost a percent higher than SBI's Rs. 1.09 trillion. Earlier in October 2011, Moody's Investors Service had cut down SBI's financial strength rating from 'C-' to 'D+' as the bank's bad loans had been rising continuously, lowering in turn its core capital. Following the downgrading, SBI's shares were traded 5.35% lower on the Bombay Stock Exchange (BSE). Since Pratip Chaudhuri (Chaudhuri) took up the reins of SBI in April 2011, there had been an erosion in SBI's market capital and investors' wealth.

Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

Chaudhuri took over as chairman of SBI from his illustrious predecessor, Om Prakash Bhatt (Bhatt). Chaudhuri assumed charge of the bank at a time when its profits had peaked to Rs. 110.34 billion (as of March 2010). Back in 2006, when Bhatt became the chairman of SBI, the bank had been losing market share to private and foreign banks in India for over two decades. SBI, under Bhatt's leadership, adopted aggressive strategies from mid-2006 to raise its market share and compete against the private banks. Bhatt transformed the organization from an old hierarchical government bank into a modern, customer-focused bank. By 2011, SBI had doubled its deposits and profits and had regained and re-established its position as India's largest bank.

The foremost challenge Chaudhuri faced was to sustain the profits and stay ahead of the competition. Industry observers were keenly watching Chaudhuri's moves regarding issues like special loan rates on mortgages, amalgamation of associate banks, Non-performing Assets (NPA) provision requirements, etc. However, on May 17, 2011, Chaudhuri announced at an earnings conference that there had been a drop in the bank's profits. While Chaudhuri reasoned that the revision of interest rates and the provisions made for the NPAs was the main cause for the drop in profits, the announcement took analysts by surprise. While the bank's position in early 2012 was not as bad as it was in 2006, Chaudhuri adopted a conservative approach in handling the bank, had a certain set of challenges to face, and needed to steer the bank out of trouble. But some analysts were doubtful whether SBI would be able to remain in the position of a market leader under Chaudhuri.

The Indian Banking Scenario - Next Page>>


1] Banco Espírito Santo is a private Portuguese bank based in Lisbon and deals with retail and investment banking, insurance, asset management, and venture capital.
2] HDFC Bank Limited is an Indian financial services company that was incorporated in August 1994 and promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank is one of the Big Four banks of India, alongside SBI, ICICI Bank, and Punjab National Bank.
3] Rs. = Indian Rupees or INR. As of January 2012, US$1 was approximately equal to Rs. 52.72.


Custom Search





Case Studies in Business Strategy Volume VI

Case Studies in Business Strategy
e-Book on Business Strategy

Case Study Volumes Collection

Business Strategy
Workbooks Collection

Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Work Books, Case Study Volumes.