Lafferty Report Ranks Retail Banking Strategies Of The Leading World Banks

By Wynne Evans

A new Lafferty Group report, The Global 100,ranks retail banking strategies of the top 100 global banks, with surprising results. Using rankings of 'focused', 'fuzzy' and 'fragile', the report assesses the approach to retail banking as described in each bank's most recent annual report.

Top ranked are Canadian banks, with all five receiving a 'very focused' rating. Generally, it is those banks with a strong regional focus that are viewed as having a clear retail strategy, whereas the large global players (including some large US, German and UK banks) are less likely to exhibit the same commitment to retail banking.

Countries whose banks within the top 100, almost without exception, receive 'fuzzy' ratings include China, Italy, Japan and Russia,

Explaining the methodology used, Michael Lafferty said “Our determination of whether a bank is focused, fuzzy or fragile in its retail banking strategies is based on what the banks say about themselves. The bank that anchors itself in retail banking and demonstrates its commitment with an activity report that puts retail in its right place – at the beginning – is credible from the very start. And a comparison of stock market indicators for highly focused banks and the remainder shows how important this is.”

The main ratings used in the report may be summarised as follows:

Focused – institutions that have developed a clear strategy, with specific objectives, that is described in detail in their report to investors

Fuzzy – describes a situation where the bank's brand and goals remain unclear to an outside observer

Fragile – refers to institutions that 'even if they put on a brave front, are clearly back on their heels'.

The report notes that the 'fragile' rating 'is a defensive posture that applies to some of the world's biggest and most renowned banks, from Barclays or RBS in the UK to Bank of America in the US', banks that have been hard hit by the financial crisis. They have been left weakened and have been forced to 'shed business, rebuild capital and in general retrench', leaving questions as whether they will be able to 'regain their footing'.

The Global 100 is written by Darrell Delamaide, the international financial journalist who is a regular contributor to USAToday and MarketWatch.

Lafferty Group
Lafferty Group is a major provider of knowledge services – from benchmarking research and Councils to professional education – for the financial industry worldwide, with particular specialisations in the field of retail banking and cards and payments. The company's International Academy of Retail Banking is a global educational and professional body for the retail banking industry and was created in the belief that retail banking should be a profession – like accountancy and law – and offers similar professional education programmes and examinations.