Finance Statement Analysis: Barclay's, HSBC, and Standard Charted

ACF 308 FINANCIAL STATEMENT ANALYSIS
Group Coursework Assignment

Presented by:
Swati Arora

Table of Contents

1. Company Overview : 3
1.1. Standard Chartered Bank: 3
1.2. HSBC Bank: 3
1.3. Barclays Bank: 4
1.4. Country Evaluation: 5
1.4.1. UK GDP Growth 5
1.4.2. Exchange Rate: 6
1.4.3. Balance of Trade: 6
1.4.4. Consumer Confidence: 7
1.4.5. Business Confidence: 8
1.4.6. Interest Rate: 8
1.4.7. Employment Rate: 9
1.4.8. Industrial Production 10
1.4.9. Stock Market 9
1.5. UK Banking Industry Analysis: 11
1.5.1. PESTEL Framework: 11
1.5.2. Competition Analysis: 13
1.6. Company Analysis: 14
1.7. Ratio Analysis: 16
1.8. Financial Forecasting: 28
1.9. Calculating Intrinsic Value of Standard Chartered: 35
1.9.1. Dividend Discount Model: 35
1.9.2. Relative Valuation Method: 36
1.9.3. Justification for Using Valuation Methods: 36
2. Company Performance Evaluation: 38
2.1. ROCE Analysis: 38
2.2. Economic Value Added (EVA) Analysis: 38
2.3. Shareholders Value Added Analysis: 39
2.4. Critical Analysis: 41

1. Company Overview:
The banking industry is one of the oldest industry, tasks with providing efficient allocation of capital and safeguarding of consumer deposits. To this end, the industry is involved in 3 types of businesses broadly: wholesale or corporate banking, retail banking and investment banking. The industry has seen wild swings and earnings through boom and bust years of the economy and has to grapple with internal scandals, and heavy regulations. The late 80s and the 90s, were boom years for western banks punctuated in part by the stock market crisis of 1997, the Asian financial crisis of 1997, the dotcom crisis of 2001 and the great financial crisis of 2008, the last of which has signaled an end of light regulation in the banking industry.

Barclay’s, HSBC and Standard Charted are all British banks, with both retail and corporate banking services. All three banks have had a high focus on investment banking, trading and corporate banking

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