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AFF5280 - Institutional Asset & Liability Management
Table of Contents
EXECUTIVE SUMMARY 3
1. COMPANYANALYSIS 5
1.1 Company overview 5
1.2 Product & Services 5
2. INDUSTRY ANALYSIS 8
2.1 Industry overview 8
2.2 Competitors analysis 8
2.3 Current state of the economy 8
2.4 Porter’s five forces 13
2.5 SWOT Analysis 16
3. BUSINESS AND FINANCIAL RISKS ANALYSIS 16
3.1 Liquidity Risk 16
3.2 Capital risk 19
3.3 Strategic risk 22
3.4 Credit risk 23
3.5 Foreign exchange risk 25
3.6 Market risk 27
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Finally, the recommendation about the risk management strategy of the company will be presented in order to make a conclusion about the overall content of the report.
The primary purpose of this report is to provide a financially risk management analysis of Bendigo & Adelaide Bank Ltd.
The main content of the report is relied on the current state of economy, industry & peer analysis and financial information of the company’s operation and business structure. In order to complete the report, both qualitative and quantitative methods are implied to perform the industry and peers analysis.
Most of the financial and statistics data in the report have been obtained from academic databases including IBIS World, Index Mundi, Fin Analysis and Bank Scope. Moreover, the company’s annual reports, Reserve Bank of Australia (RBA) have been taken into account effectively.
Assumptions and Limitations
Some financial and academic information related to the bank’s operation and position is restricted to publicly available. It leads to limitation in the ratio calculation as well as risk management strategies recommended.
1.1 Company overview
The Bendigo & Adelaide Bank Group was established in November 2007 as a result of the merger between Bendigo Bank and Adelaide Bank with an aim to become Australia’s leading customer-connected banking group. Taking the advantage in economies of scale, the company provides an extensive range of banking and financial services under four distinct brands comprising of Bendigo Bank, Adelaide Bank, Bendigo Wealth and Sandhurst Trustees.
However, the major focus of the company is the retail banking and wealth management services which are responsibly presented by the Bendigo Bank. Therefore, the primary purpose of the report will critically analyse and evaluate the business structure as well as the performance of Bendigo Bank.
At the present, Bendigo Bank officially serves its customers via a diverse distribution network of more than 900 outlets, 190 company-owned branches, 275 locally-owned Community Bank branches, 90 agencies and 1900 ATMs. The critical priority of the bank is to develop a broader network and higher quality of services in order to maintain its strong growth and retention of customer deposit base. In 2012, according to the Roy Morgan’s Bank customer satisfaction survey, Bendigo was rewarded as the “business bank of the year” by leading the industry in customer satisfaction.
1.2 Product & Services
The bank’s traditional products and services can be classified into three main aspects including (1) Wealth management, (2) personal banking and (3) business banking
2. INDUSTRY ANALYSIS
Due to the major focus on retail banking and wealth management services in Australia market, Bendigo & Adelaide Bank Ltd’s industry sector should be classified as “National and Regional Commercial Banks”. Apparently, the industry major...