The aim of this report is to analyse the financial performances of Santander UK plc to investigate the reasons behind their consistent performance over the last few years whereas other banks and financial institutions are suffering to maintain their profit margin.
Santander Group is a Spanish bank centred on Banco Santander which is being around from 1857. It has been founded mostly in family ownership and now being broadened to become a global bank. In terms of market value, it is the largest bank in Eurozone and also a leading bank in terms of market capitalization. Santander Group entered into the UK through the acquisition of Abbey National plc approved by the courts in November 2004. In 2008 it has also acquired Alliance & Leicester and Bradford & Bingley savings business. Alliance & Leicester plc transferred to Santander UK in January 2009. Abbey Bradford & Bingley and Alliance & Leicester rebranded as Santander. The bank offers a wide range of corporate, business personal, personal accounts including credit products, mortgages, savings and investments. It provides online banking services, including mobile apps. Santander also provides mortgages for Intermediaries through a division of Santander UK plc which is used by the brokers.
The bank is approved by the Prudential Regulation Authority. It is regulated through the Prudential Regulation Authority as well as by the Financial Conduct Authority. It is a member of the UK Payments Administration, Financial Services Compensation Scheme, Bankers' Automated Clearing Services (BACS), the Cheque and Credit Clearing Company, the Faster Payments Service, the British Bankers' Association and the (CHAPS) which is stand for Clearing House Automated Payment System. The reason for the research on Santander UK plc is that the banking is an industry always attracts me to research because it is my desired place to work and I have chosen Santander because of its robust financial performance over the past few years. Since the global recession in 2008 many banks have been limiting their activities and closing down their branches, but Santander has been continuing to expand their business. Moreover, I want to utilize my knowledge and skills I have gained during my MSc program especially Business Analysis, Financial Management and Corporate reporting modules. Some of my favourite theories and models I can implement very well during research on Santander.
Table of Contents
Introduction
Study Objective
Literature Review
Methodology
Analysis and Research
Profitability
Profit Margin
Return on Capital Employed
Return on Asset
Liquidity
Current Ratio
Solvency Ratio
Current Strategic Position
Strengths
Weakness
Corporate Social Responsibility
Economic Responsibilities
Legal Responsibility
Ethical Responsibility
Support for Startups to Corporate Business
Inclusion and Diversity
Environmental Management
Carbon Management
Philanthropic Responsibility
Central Fund: Learn & Grow and Money Skills
Helping UK Social Enterprises
Conclusion
Research Objectives and Focus
The primary aim of this report is to conduct a critical evaluation of the financial performance of Santander UK PLC between 2012 and 2014, while simultaneously identifying the strategic factors that have contributed to its success compared to competitors like HSBC. The research seeks to explain why Santander has maintained consistent growth and profitability in a challenging economic climate.
- Comparative financial performance analysis of Santander UK and HSBC UK.
- Evaluation of strategic positioning using the SWOT analysis framework.
- Assessment of Corporate Social Responsibility (CSR) policies and their impact on financial results.
- Utilization of financial and ratio analysis to determine operational strengths and weaknesses.
- Exploration of the relationship between sustainable business practices and profitability.
Excerpt from the Book
Methodology
This part is concerned with what types of data I have used in my research. The data for any research activities can be collected from two sources which are primary and secondary. Some research can be based on purely primary or secondary and some can be mixture of primary and secondary. What sources of data need to use totally depends on the ability, scope, time and power of researchers. Primary data is the data which is collected by an investigator from the original sources. Reviere, Rebecca, (1996) mentioned that primary data is the originally collected information that is obtained from institution of organization directly. On the other hand, Singh et al. (1996) stated that primary data is the original information gathered first hand by fieldwork such as assessing, measuring, counting, interviewing, taking photograph, sketch mapping. Secondary data have already been collected by the individuals or some agencies and which are now available in unpublished of published records.
Even though primary data are very powerful and strong methods of gathering information, but I have done my whole research on secondary data such as books and articles related with my research. Moreover, I have obtained all the financial information from the Osiris and the website of Santander bank. I have chosen secondary sources of data because as a student I could not manage sufficient information from the primary sources because of the two constraints. Firstly, the cost of data collection, primary data are much more expensive than secondary data because there need to have a dealing of market involvement where the expenditure of making and carrying out the research might be very high. And as a student it was not possible to afford such amount of expenditure. Secondly, Primary sources of data are much more time consuming than secondary data. Primary sources of information such as interviewing need huge amount of time but we have done our study under tremendous time pressure. We had to study lots of other modules on the same time. Therefore, I found it very appropriate and relevant to finish my project on secondary data.
Summary of Chapters
Introduction: Provides an overview of the Santander Group, its history, market position, and the rationale for researching its financial performance.
Study Objective: Defines the research goals, specifically focusing on the comparative analysis of financial performance, strategic positioning, and CSR impact.
Literature Review: Examines theoretical frameworks for financial and ratio analysis and explores the limitations inherent in using secondary data for such assessments.
Methodology: Details the rationale for using secondary data sources, including annual reports and financial databases, due to time and resource constraints.
Analysis and Research: Presents the core financial evaluation, including profitability metrics like profit margin and return on capital, and liquidity ratios.
Current Strategic Position: Employs SWOT analysis to evaluate the internal strengths and weaknesses of Santander, linking them to its overall market strategy.
Corporate Social Responsibility: Applies Carroll’s CSR Pyramid to evaluate how the bank's ethical, legal, and philanthropic responsibilities contribute to its performance.
Conclusion: Summarizes the findings and confirms that the initial research objectives were successfully met despite the reliance on secondary data.
Keywords
Santander UK, HSBC, Financial Performance, Ratio Analysis, Profitability, Liquidity, Solvency, SWOT Analysis, CSR Policy, Carroll's Pyramid, Strategic Management, Secondary Data, Economic Performance, Market Capitalization, Banking Sector
Frequently Asked Questions
What is the primary focus of this research?
The report provides a critical evaluation of the financial performance of Santander UK PLC from 2012 to 2014, benchmarking it against HSBC UK.
What are the main thematic areas covered?
The research centers on financial ratio analysis (profitability, liquidity, solvency), strategic positioning via SWOT analysis, and the implementation of CSR policies.
What is the central research objective?
The objective is to understand why Santander maintained robust performance and consistent growth while other banks struggled during the same period.
Which research methodology was adopted?
The study relies on secondary data, utilizing financial statements, annual reports, academic literature, and databases like Osiris for the analysis.
What is addressed in the analysis section?
The section evaluates key financial metrics such as Gross Profit Margin, Return on Capital Employed (ROCE), Return on Asset, Current Ratio, and Solvency ratios.
Which keywords best characterize this work?
Key terms include financial performance, ratio analysis, SWOT, CSR policy, Santander, HSBC, and strategic management.
How does Santander’s CSR policy influence its business success?
The author argues that fulfilling philanthropic and ethical responsibilities enhances the corporate image, attracts investors, and ultimately contributes to long-term profitability.
What limitations does the author mention regarding secondary data?
The author notes potential issues regarding the quality, appropriateness, and accuracy of secondary data, as it was originally gathered for purposes other than this specific study.
- Quote paper
- Md Kamrul Islam (Author), 2015, Critical Evaluation of the Financial Performance of Santander UK PLC, Munich, GRIN Verlag, https://www.grin.com/document/456098
