Economic development of a country is highly regulated by the performance of its banking sector (Haleblian, Kim and Rajagopalan, 2006). Mobility of the funds is one of the most important functions of the banks. Moreover, banks govern savings and investments of the public as well as the government (Miller and Noulas, 2011). The banking sector of UK is majorly dominated by large banks such as Lloyds Group, Barclays, the Royal Bank of Scotland (RBS) and HSBC (Economics Online, 2016). In this report, the recent performance of Barclays bank will be presented. In addition, the report will also highlight on the contemporary situation of the UK banking industry in a brief manner.
In terms of the market share, it can be stated that the UK banking sector is oligopolistic (Economics Online, 2016). The market shares for the most reputed banks of UK are presented as under:
Figure 1: Market shares of the UK banks
(Source: Economics Online, 2016)
After the period of financial crisis, UK banking industry has gone through a process of consolidation (Economics Online, 2016). In 2009, Halifax bank of Scotland has merged with Lloyds to set up a single banking group known as the Lloyds Group (Economics Online, 2016). As a result of that, within 2015, the market share for Lloyds Group has climbed to 27%.
During the early stage of 2002, Competition Commission (Presently named as Competition and Market Authority, CMA) has reported that in UK, banking sector operated under a complex monopoly market. As a result of that, small and medium sized banks have faced it difficult to enter into the market. Moreover, the level of competition has also been reduced for the detrimental customers. For instance, the customers did not want to switch over the banks as all of them offered almost same sorts of benefits.
However, after the financial crisis, the level of concentration in the banking sector has increased significantly. The H-H index for the banking sector has hiked to 1736 in 2010 from 1401 in 2007 (Economics Online, 2016). However, an index of 2000 is considered as highly concentrated market (Economics Online, 2016). Moreover, post financial crisis, tight regulation has been imposed on the UK banks like that of the US and EU banks. In order to reduce the stress factor on the banks and ensure a highly competitive financial market, regulators of the UK banking sector has primarily focused on balancing the financial stability (Chirwa and Mlachila, 2014). Financial Conduct authority (FCA) is responsible for a proper functioning of the financial market in UK (Gilligan and Smirlock, 2011).
Barclays is considered as one of the most popular banking and financial services company of UK. The bank is also known as one of the oldest private bank across the globe. In the year 1690, Barclays bank has been established and it is headquartered in London (Barclays, 2015a). The universal operations of the bank include retail, wholesale and private banking services (Barclays, 2015a). In addition, it is also engaged in mortgage lending and wealth management. The bank operates in almost 50 countries and has a customer base of almost 48 million (Barclays, 2015a).
Barclays has started as a goldsmith banking business by James Barclay in London (Barclays, 2015a). In 1896, banks such as Gurney’s Bank and Backhouse’s bank have been united and formed Barclays and Co. However, in the upcoming years, the bank has expanded its operation and established itself as a multinational financial service company. World’s first cash dispenser has been deployed by Barclays. Moreover, the bank has made important strategic alliances with the banks such as British Linen Bank, The Woolwich and Lehman Brothers (Barclays, 2015a). Barclays has been listed in the London Stock Exchange and also a part of the FTSE 100 index. In addition, it is also listed in the New York Stock exchange.
The products and services offered by Barclays majorly focus on three types of entities such as individuals, small and medium businesses and corporate or institutions.
Products and services for the Individuals: Products and services for the individuals have been designed to cater the demand for the common people (Barclays, 2015c). These products are again segregated into personal banking, premier banking, international banking, Barclaycard and wealth management (Barclays, 2015b).
Personal banking products offered by Barclays are as mentioned as follows:
Mortgages: Through this services, the expertises of the bank offer advice the customers about the different types of mortgages and the home loan market (Barclays, 2015d).
Individual savings account: It enables the customers to save money without paying taxes on the interest (Barclays, 2015c).
Bank account: Provides customised bank accounts to the customers.
Insurance: It offers personalised policy to the individuals according to their requirements.
Loans: In this case, Barclays offers personal loans to the customers that can help them to finance a car, purchase or repair homes or consolidate the debts (Barclays, 2015e).
Investments: With these services, the managers of the bank suggest the customers about the suitable investment opportunities available in the market.
Premier banking products of Barclays is mainly concerned with the premier accounts that provide additional benefits to the loyal customers of the banks (Barclays, 2015e). International banking facility of Barclays offers the scope of offshore banking to its customers and also gives the facility to open a multi-currency account (Barclays, 2015e). Barclaycard helps the individuals in balance transfer and make international transfers. On the other hand, wealth management services of the bank helps the customers to manage wealth from in the international market and also offers fiduciary services, brokerage and research facilities (Barclays, 2015e).