2016 was a very challenging year for most British based banks but not for Lloyds Banking Group. A sustainable and responsible business model characterised by a very low risk appetite enabled Lloyds bank to ride the turbulent macro climate faced by other banks. While rivals such as Royal Bank of Scotland and Barclays continue to undergo mega restructurings and battle legacy conduct issues, Lloyds has relied on its simple low cost operating model to become currently the second largest banking group in the UK after HSBC.
With the UK government completing its divesture from bank on the 17th March 2017, Lloyds is no longer burdened with any conduct issues resulting from its involvement in the 2008 financial crisis. This has translated into strong financial performance. Nevertheless, given its UK focus, the banks performance is inextricably linked to the UK macro environment which was affected by factors such as Brexit, the low interest environment as well as a sluggish UK economy, among the key external macro factors that have impacted the operational environment of UK banks.
In the following report, we will identify the major drivers of change behind the banks external environment and banking industry in general to help us understand how Lloyds Banking Group can utilise internal core competencies so as to take advantage of macro environmental opportunities while neutralising inherent threats from the external environment.
Lloyds Bank Strategy Case Study
Key Learning Outcomes
- Understand the broad macro-environment of Lloyds bank and the UK banking industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
- Use our swot analysis example to gain an overall understanding of Lloyds Bank's strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the Pestle analysis example on it's business environment.
- To apply strategy business models and frameworks such as Pestle/Pest/Steeple, Swot etc to real company cases.
Analyse the internal and external environment of Lloyds Banking using SWOT & PESTLE
1.0 INTRODUCTION
Lloyds Banking Group is a UK based banking, insurance and financial services provider with operations in England, Wales and Scotland. In England and Wales, it operates as The Halifax and Lloyds Bank brands while in Scotland, it operates as Bank of Scotland where it has been serving Scottish customers since 1695. Lloyds Banking Group has operations in a diverse set of consumer and wholesale markets including retail and personal finance (operating as Halifax and Lloyds Bank), commercial and corporate lending (operating as Black Horse and Lex Autolease) and pensions & insurance (operating as Scottish Widows). It is part of the UK big four, referring to the four largest UK-based banking groups which also include HSBC, Royal Bank of Scotland and Barclays. Latest revenues for the year ending 31 December 2016 were approximately £39.611 billion on operating profits (before tax) of £4.2 billion (Lloyds Bank Annual Report 2016).
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