Detailed Financial and Strategic Analysis of Al Baraka Banking Group

This report provides a comprehensive analysis of Al Baraka Banking Group, a major banking corporation in Bahrain. It covers the company's background, vision, mission, and the influential figures behind it. The analysis includes an examination of the internal and external environments using PESTEL factors (political, economic, social-cultural, technological, environmental, and legal) and a SWOT analysis (strengths, weaknesses, opportunities, and threats). The report also discusses the policies and procedures used by the bank, performance measures, target setting, and recommendations for improvement, particularly emphasizing the importance of employee training and skilled personnel. The document concludes with a bibliography referencing sources used in the analysis. Desklib offers this and other solved assignments for students.

COMPANY ANALYSIS 1
Al Baraka Banking Group analysis
Name
Affiliation

COMPANY ANALYSIS 2
Al Baraka Banking Group analysis
Introduction
Al Baraka Banking Group is the biggest bank corporation in Bahrain which is located at
Manama, Bahrain. The company was formed around 2002 in Manama, Bahrain. In terms of
business, Al Baraka Banking Group is listed on the Bahrain stock exchange as well as
NASDAQ. In the long run, the business offers retail, corporate and investment banking and
treasury services. The above services are in accordance with principles of the shari’a in 15
countries. In 2012 Al Baraka Banking Group was estimated to have assets totaling to around
$70.2 billion. Two of the most influential people who supports the Al Baraka Banking Group are
Saleh Abdullah Kamel and Abdullah A. Saudi the two are not only influential in Al Baraka
Banking Group only but also at finance in the middle East and North Africa for the recent
decade. For instance, Saudi is a Libyan banker who has also been an advisor to the Bank of
Lebanon since around 1997 when he was employed as an advisor. Also, to some extent he served
in the central bank of Libya from around 1958 to 1972. Also he is a celebrated founder and
general manager of the Libyan Arab Foreign Bank, Libya from 1972 to 19801. Apart from all
this he was also a celebrated chief executive officer of Fiat Automobiles. Researchers have
shown that Saudi was the pioneer of finance in the middle east so much so that he is a celebrated
founder of the renowned Arab bank Corporation.
Vision and Mission developed with justification of existence
The Al Baraka Banking Group has a clear and direct vision which state “To be world’s best
participation bank.” The vision clear tries to attract as many people as possible even from the
1 Patrick PL, Abdrakhmanova G, Myrzakozha D, Kurmantayeva A. To be or not to be? Islamic
banking in Kazakhstan

COMPANY ANALYSIS 3
outside country by trying to assure them that the bank is the world’s best participation. By this
statement, the bank is able not only to attract locals by also foreigners who believe in this vision
and invests in Al Baraka Banking Group in the long run.
Also the company has a clear mission which states, “the Al Baraka Banking Group mission is to
satisfy financial needs of society by sharing their common benefits with their customers sharing
success with Al Baraka Banking Group, employees and shareholders by adhering to the
principles of interest-free banking, in an appropriate way to their corporate values and ethical
principles of banking.” The above mission player’s two important roles one is encourage workers
as well as employee in reaching the company goals and objective. The mission is used as a
direction to direct the employees both junior and senior managements in the long run.
Internal and External Environment Screening
Just like other companies Al Baraka Banking Group is controlled by certain factors. Those
factors are divided into two categories which are internal environment and external environment
The internal environment
Al Baraka Banking Group internal environment comprises of the elements which are within it.
Such elements include current employees, management and the culture. In most cases corporate
culture define the employee behavior in and outside the company. Even though some factors
affect the company as a whole others affect the manager only2. However, one must understand
that other factor which affects the employee service deliverance is manager’s philosophy and
leadership style. In many organizations some of internal environment factors which affect the
2 Zins A, Weill L. Islamic banking and risk: The impact of Basel II. Economic Modelling.1 Aug
2017;64:626-37

COMPANY ANALYSIS 4
company performance in one way or the other include value system, mission and objective,
human resources, unions, organization structures, physical resources and corporate culture.
External environment
These are factors outside Al Baraka Banking Group which affects its operations. Those factors
are classified as PESTEL analysis which is a short form of political, economical, social-culture,
technology, environment and legal factors. These factors affect the Al Baraka Banking Group
operations in different ways as discussed below.
Political factors
Bahrain is a country which is politically stable. This means Al Baraka Banking Group is not
highly affected by politics. However, the bank’s policy are affected politically by rules and
regulations made by national parliament.
Economical factor
Another factor which affects Al Baraka Banking Group operations is economical. The country is
rich economically. Due to this, it enables the customers to save more in the bank.
Social-culture
The country is made up of diverse social and cultures. As a result the Al Baraka Banking Group
is forced to embrace different cultures. As a result the bank is able attract and serve many
customers in the long run. Culture is an asset to the company; this is because the behavior and
success of employees in Al Baraka Banking Group is mostly affected by the social-culture.
Technology factor

COMPANY ANALYSIS 5
Technology is an innovation which is used by Al Baraka Banking Group as a competitive
advantage. Currently, majority of banks in the whole world is making great improvement to their
technology to serve more customers. Some of improvement which is currently made in Al
Baraka Banking Group technology is to enable their customer’s access their services through
mobile phone. This means technology has improved in such a way that majority of customers
can access their account in comfort of their homes.
Legal factors
These are legal factors which the bank must first fulfill before it’s allowed to operate in a
country. These factors prevent financial services from stealing from the public. Every bank must
follow laid down rules and regulation which are formulated by other banks fraternity or the
government parliaments. The main roles of legal factors are to protect customers against losing
their money.
SWOT analysis for Al Baraka Banking Group
A SWOT analysis of an Al Baraka Banking Group formally evaluates its financial institutions
strength, weakness, opportunity and threats. The analysis indentifies these four major elements
which eventually helps the management to better leverage the strengths to take advantage of the
future business opportunities while better understanding its operational weaknesses to combat
threats to potential growth. In the long run a SWOT analysis may also address many other
scenarios, which includes new business initiatives, advertising campaigns or even marketing
budgets3.
3 Raja A, Waldecker L, Zipfel J, Cho Y, Brem S, Ziegler J, Taniguchi T, Watanabe K, Malic E,
Berkelbach T, Heinz T. The influence of disorder in the external environment of 2D
semiconductors on their electronic and optical properties. Bulletin of the American Physical
Society. 6 March 2018.

COMPANY ANALYSIS 6
Strengths
 The success should be internal components reflective of the Al Baraka Banking Group
physical and human resources
 For instance the Al Baraka Banking Group strength include high client retention, high
yield bond rate, product line diversification, users friendly website, low overheads and
low staff turnover.
Weaknesses
 The weaknesses in a Al Baraka Banking Group SWOT analysis must highlight where the
bank is falling short of reaching its goals or non-competitive
 Some of Al Baraka Banking Group weakness include low brand recognition low
customer satisfaction, low staff morale, minimal product line and high loan rate.
Opportunities
 This section must highlight areas where the Al Baraka Banking Group have room for
growth or could take advantage of opportunities in the market.
 Some of the opportunities for Al Baraka Banking Group include growing economy,
banking deregulation, increase in the average saving rate, as well as the new high-yield
investment products which is realized in the company or a less competitors in the market.
Threats
 This includes areas where Al Baraka Banking Group has potential to decline or be
harmed by other factors in the market.

COMPANY ANALYSIS 7
 They should also be external components reflective of current business.
 Some threats associated with Al Baraka Banking Group includes decline economy, some
cases there are an increase in insurance rates which is caused by unpreventable factors, to
some extent, there is an increase in capital gains taxes which might affect the company,
every company is affected by cases of high unemployment rate in the country and
banking industry or in some cases there is more competitors in the marketplace
Policies and Procedures used
Strengths
For instance the Al Baraka Banking Group
strength include high client retention, high
yield bond rate, product line diversification,
users friendly website, low overheads and low
staff turnover. Weaknesses
me of Al Baraka Banking Group weakness
include low brand recognition low
customer satisfaction, low staff morale,
minimal product line and high loan rate.
Opportunities
Some of the opportunities for Al Baraka
Banking Group include growing economy,
banking deregulation, increase in the
average saving rate, as well as the new
high-yield investment products which is
realised in the company or a less
competitors in the market.
Threats
Some threats associated with Al Baraka
Banking Group includes decline economy,
some cases there are an increase in insurance
rates which is caused by unpreventable
factors, to some extent, there is an increase in
capital gains taxes which might affect the
company, every company is affected by cases
of high unemployment rate in the country and
banking industry or in some cases there is
more competitors in the marketplace.
Al Baraka Banking
Group SWOT analysis

COMPANY ANALYSIS 8
Majority of banks are guided by policies and procedures made by central bank as well as national
government. The said rules and regulation is mainly used to protect and safeguard the customers
against losing their money. For instance, there is maximum amount of money a customer is
supposed to withdraw in a day. These policies and procedures are made to protect both bank
against theft and also reduce corruption cases in a country. Some of the policies and procedure
used by Al Baraka Banking Group to evaluate and to monitor the implementation of the strategy
includes
 Thoroughly checking any new customers credit record
 Using the first sale to start building the customers relationship
 Establishing the credit limits
 By making sure the credit terms of any sales
 Using the credit or political risk insurance
 By using factoring
 Developing a standard processes which is used for handling overdue accounts in the
company
Performance Measures and Target Set
The Al Baraka Banking Group measures its operations through the number of customers it have.
The more the customers the higher chances of making huge profit in the long run. The company
has used this method for long. From the statistics the company performance recorded has been
doing so well. The target set by the company is also so clear which is highlighted on its mission
and vision. Mostly, the company’s target set is to serve all people across the world equally
without any discrimination.

COMPANY ANALYSIS 9
Recommended
One of the great recommendations I would recommend Al Baraka Banking Group is that, all
leaders across different departments in the company are supposed quid their junior employee
how to work. The company can make sure that all departments are working properly. The
greatest assets of a company are its human resources and as a result the company must hire
skilled personnel who would assist it in reaching it overall goals in the long run.

COMPANY ANALYSIS 10
Bibliography
1. Patrick PL, Abdrakhmanova G, Myrzakozha D, Kurmantayeva A. To be or not to be?
Islamic banking in Kazakhstan.
2. Raja A, Waldecker L, Zipfel J, Cho Y, Brem S, Ziegler J, Taniguchi T, Watanabe K,
Malic E, Berkelbach T, Heinz T. The influence of disorder in the external environment of
2D semiconductors on their electronic and optical properties. Bulletin of the American
Physical Society. 6 March 2018.
3. Song J, Sun Y, Jin L. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews. 1 Dec
2017 ;80:276-89.
4. Zins A, Weill L. Islamic banking and risk: The impact of Basel II. Economic Modelling.1
Aug 2017;64:626-37.