SWOT analysis is a technique used by managers to analyze a company's strategic situation by identifying its strengths, weaknesses, opportunities, and threats. The Royal Bank of Scotland's (RBS) internal strengths include support from the UK government and ownership of global franchises. However, its weaknesses include large loan losses impacting profitability. External opportunities for RBS include profitable commodity trading and partnerships in Asia. Threats include rising loan defaults, issues from acquisitions not providing benefits, and reputational damage from investigations.

1. Royal Bank of Scotland SWOT Analysis
“SWOT is an acronym for the internal Strengths and Weaknesses of a firm
and the environmental Opportunities and Threats facing that firm. SWOT
analysis is a widely used technique through which managers create a quick
overview of a company’s strategic situation. The technique is based on the
assumption that an effective strategy derives from a sound “fit” between a firm’s
internal resources (strengths and weaknesses) and its external situation
(opportunities and threats). A good fit maximizes a firm’s strengths and
opportunities and minimizes its weaknesses and threats. Accurately applied, this
simple assumption has powerful implications for the design of a successful
strategy.”
Royal Bank of Scotland
The Royal Bank of Scotland Group plc (RBS or the group) is the holding
company of one of the world's largest banking and financial services groups. The
group operates in the UK, US and internationally through its two principal
subsidiaries, the Royal Bank and NatWest. In the US, the group operates
through its subsidiary Citizens. It is headquartered in Edinburgh, UK and employs
about 199,500 people.
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2. Royal Bank of Scotland SWOT Analysis
Strengths, Weaknesses, Opportunities and Threats (SWOT)
TYPE OF FACTORLocation of Factor
Favorable Unfavorable
Internal Strengths
UK Government’s
support ensures
adequate ratings
Though in trouble,
RBS owns a number of
global franchises that
make it a globally
leading financial group
Ownership of leading
franchises in domestic
market
Weaknesses
Large loan losses
impacting
profitability and
capitalization
Loan book excess
growth over
deposits impacting
liquidity
Declining
operational
efficiency impacting
margins
External Opportunities
Commodity trading
expected to be
profitable in the long
run
Restructuring likely to
reposition RBS as a
strong financial
services provider
Partnership with Bank
of China likely to help
the group participate in
Asian economic
growth
Threats
Loan defaults likely
to rise in future due
to low quality loan
book
ABN AMRO
restructuring may
not realize the
anticipated benefits
for the Group
SEC Investigation
causing
reputational
damage
Increasing online
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3. Royal Bank of Scotland SWOT Analysis
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frauds in the UK
likely to create
operational snags