Critical Appraisal of Financial Performance of Banking Institutions

Critical Appraisal of Financial Performance of Banking Institutions



This assignment is about critically analysing financial performance of banking institutions.


What you are expected to deliver? 

Using financial statements and related information of one bank from column 1 (Big Fives), and one from column 2 (Small and newly constituted Banks) of the following table and compare and explain the financial performance of three banks over the past three years:


Big Five Banks

Small Banks

Royal Bank of Scotland Group PLC

Securities Trust Bank

Standard Chartered Bank

BGEO Group Plc                   

Barclays PLC

Virgin Money Holdings (UK) Plc       

Lloyds Banking Group PLC


Hong Kong and Shanghai Banking Corporation



You are expected to build a quick background on the topic, talking about history of banks you have chosen for analysis, makes references to the literature on the topic, conduct bank level analysis and critically discuss the key performance metrics, and highlight the factors that are affecting performance in the banking sector.  


The final output (your analyses) will be in the form of a report which you will submit via module NILE site using turnitin (further submission details are available in the following pages). Please note that you are required to:

Select at least 10 financial ratios and 3 non-financial measures to analyse the performance and financial position of the three institutions.

You are expected to use charts and graphs to compare performance of the three banking groups and demonstrate your skill to confront existing literature and include your critical analysis.

For clarity, you are expected to rank the banks based on the individual benchmarks. You will need to consolidate the individual rankings to develop an overall ranking chart. Your ranking analysis should highlight the critical success factors that drive performance in the financial services industry.     

Write a memo to the managing director of the worst performing bank with recommendations of how the financial performance of the business can be improved.                                     


Suggested Structure of the Essay: 


Introduction: Introduce the topic in local and global context and set the motivation for the study. Offer reasons for selecting ABC banks for performance analysis. Make references to the literature on the topic. Talk about the structure of the report.

Financial ratios: Analysis of ratios to determine success/failure of the banks. Ratios should cover all the main ratio groups and incorporate market data. To determine the financial strength of the bank in areas such as profitability, liquidity, investor ratios, gearing, and share price performance-other financial information of use. Use tables and charts to summarise data and show trends. Rank best and worst for each ratio analysed. Carry out overall ranking. Justify the chosen ranking method and discuss results.

Non-financial Ratios: Analysis of non-financial ratios to determine success/failure of the bank offer. Undertake these calculations and tabulate data. Ratios should be important to the retail sector. Rank best and worst for each ratio analysed. Justify the chosen ranking method.

Memo to MD of the WORST performing Bank

Present summary ranking for each ratio group and explain reasons for poor financial and no-financial performance. Outline and explain strategic recommendations to improve the firm performance in the medium term (3-5 years).

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