October 21, 2009

Portfolio management of Standard Chartered Bank (SCB) Pakistan

Portfolio management of Standard Chartered Bank (SCB) Pakistan




  1. Introduction


The ideal research approach significant for research is by means of thorough applications of comprehensive financial analysis imposing standards and strength from within into useful research paradigm through case study assimilation as well as having factual evidence that can be directed to financial aspect of the banks as supported by reliable case studies presented through reliable journals and articles as based on the topic. The involvement of SCB Pakistan in annual report and or press releases of banking finance statements is of positive factor to value application of financial approaches found within case patterns and such financial context and principles. The research can have the analytical underpinnings for new class of active investment managers. There needs for a qualitative active management, of better financial analysis and such process to try to beat the market pointing to financial economics in delivering investment returns, from perspective of financial economist, active portfolio management appears to be reliable consideration from active, effective management.



  1. Methodology


The need for a qualitative approach adhering to portfolio management of SCB Pakistan that investigates superior returns and risk control, this will work out through case study analysis of SCB that caters to their financial statements in recent figures and the recognizing of financial strength as the case study will analyze in terms of SCB reports relating to Pakistan and an organized discussion, analysis as well as interpretation of the research depending on data presented through SCB's financial reports that overlook for a possible active portfolio management on desired approach. Method goal is to provide a structured approach for active investment management applied for SCB Pakistan. The process includes researching ideas as qualitative or not, forecasting exceptional returns, constructing and implementing portfolios, observing and refining their performance then, to provide better set of strategic concepts and rules of thumb which broadly guide the portfolio process. The utilizing of financial methods for SCB Pakistan as these type of methods are the most popular of the various project selection and prioritization methods with 77 percent of businesses using this method overall, and 40 percent reporting it as the dominant method they rely on. The methodology can be based on literature studies of SCB through research analysis as supported by reviewed studies of understanding the background of the bank's financial strength and how it relates to pricing opportunities as the banks do strive to become more financial competitive centered (Rugby Estates, 2000). The data required for case analysis have been collected SCB Pakistan's annual reports and statements have been referred for the collection of accurate data (Barth et al., 2002; Calomiris and Powell, 2001).



  1. Objectives


The need to plan, execute and understand the process of portfolio management of Standard Chartered Bank, the case of Pakistan Standard Chartered Bank Pakistan will need to adopt such approach to financial planning and management which deploy an effective banking network by linking towards a better financial approach determining financial statement in its value and strength, the research will present better framework for analysis and crafting of financial patterns of Standard Chartered Bank in portfolio management into Pakistan context. The need to know and recognize the importance of portfolio management as research pertains to Standard Chartered Bank involvement in such controlling of risks as well as provide of superior returns can achieve better financial status and competence without experiencing much delinquency of its financial statements like, found in cash flows and balance sheets with Pakistan banking sectors for managing portfolio engagements linking to other Pakistan banking sectors (Venkatraman and Henderson, 1998). The setting of portfolio standards by SCB is an important factor upon determining success towards financial strength and other matters.


4. Hypothesis


H1: There is active and effective approach towards portfolio management of Standard Chartered Bank


H2: There is inactive and ineffective approach towards portfolio management of Standard Chartered Bank


H3: There is positive portfolio assessment method of SCB upon considering comprehensive financial information


H4: There is negative portfolio assessment method of SCB upon considering comprehensive financial information



  1. Literature review


New product portfolio management is about how there investment in business's product development resources is allowing SCB project prioritization, allocating resources across development projects. There has been several goals in portfolio management such as the maximizing the value of the portfolio, seeking the right balance of projects, ensuring that the bank's portfolio is strategically aligned, and making sure SCB don't have too many projects for its limited resources and lots of tools to use for measuring portfolio as some quantitative/qualitative, others graphical, strategic as such being designed to help the bank chose the right portfolio of projects. According to Morton and Pliska (2006), there can be presence of "optimal portfolio management policies for an investor who must pay transaction cost equal to a fixed traction of the portfolio value each time he trades, showing that the optimal policy reduces to solving single stopping time problem as when there is risky stock, there can be system of equations whose solution determines the optimal rule and observe the general qualitative results" (p. 337). Thus, portfolio management is fundamental to new product success but as easy as it seems not only must SCB seek to maximize the value of your portfolio, but the development projects in the portfolio must be appropriately balanced, there must be the right numbers of finances and other related aspects, portfolio management must be strategically aligned. No one portfolio model can deliver on the goals, so SCB may integrate multiple methods to select effective projects. SCB is known and trusted for having high standards of corporate responsibility as the bank is committed to building sustainable business through social inclusion, environmental protection and good governance, by combining the global capabilities with deep local knowledge, SCB develop innovative products and services to meet the diverse and ever-changing needs of individual, corporate and institutional customers in some of the world's most exciting and dynamic markets (SCB report, 2007). Financial statements is to provide information about the financial strength, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions, intended to be understandable by readers who have reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently (Klüh and Stella, 2008). Financial strength was used in describing certain extent to which an entity is constrained by its financial situation in pursuing its strategic goals or policies. An entity is financially strong when it is relatively unconstrained and weak when financial constraints are binding on policy choices. The financial strength of the banks is intimately linked to the successful management of the enterprise (Stella, 2005).




6. Literature cited



Barth, James R., Gerard Caprio Jr., and Ross Levine. 2002. Bank Regulation and Supervision: What Works Best. World Bank Working Paper 2725


Calomiris, Charles W., and Andrew Powell. 2001. Can Emerging Market Bank Regulators Establish Credible Discipline? The Case of Argentina. In Prudential Supervision: What Works and What Doesn't ed. F. S. Mishkin. Chicago: University of Chicago Press


Creswell, J.W. (1994). Research design: Qualitative and quantitative approaches. Thousand Oaks, California: Sage


Klüh, Ulrich and Peter Stella, 2008, "Central Bank Financial Strength and Policy Performance: An Econometric Evaluation," forthcoming (Washington: International Monetary Fund


Morton, Andrew and Pliska, Stanley. 2006. Optimal Portfolio Management with Fixed Transaction Costs. Mathematical Finance Volume 5 Issue 4, Pages 337 - 356 Published Online: 6 Dec 2006, 2009 Wiley Periodicals, Inc.


Rugby Estates (2000), Annual Report, Rugby Estates, London


SCB Annual Report, Interim 2007, Leading the Way http://www.standardchartered.com/about-us/en/index.html


Stella, Peter, 2005, "Central Bank Financial Strength, Transparency, and Policy Credibility," IMF Staff Papers, Vol. 52, No. 2 (September)


Venkatraman, N, Henderson, J.C (1998), "Real strategies for virtual organizing", Sloan Management Review, Vol. 4 pp.33-48


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