Islamic Banking case - Term Paper Example

Al Bateen Bank (ABB) In a SWOT analysis for Al Bateen Bank, the major strength of the bank isthat it has been able to establish a loyal customer base that will not change banks regardless of the existing circumstances. Therefore, the bank can use the loyal customers to establish a foundation to attract potential customers and maintain those keen on leaving the bank to try Islamic Banking services. On the other hand, the bank’s ability to grow by 25% each year, for a period of five years, is a major strength for the bank.

In this case, such growth is not possible without establishing proper structures and systems that enhance growth. Moreover, the fact that the owner of the bank plays a huge role in managing the bank is strength, which makes it possible to analyze the bank’s current position in the market and make management decisions in a quick way.The biggest weakness in the bank regards the vulnerability posed by the lack of knowledge on other products in the market, and especially by competing products.

In this regard, it is evident that Sultan does not know the principles and concepts of Islamic Banking, which is a major weakness since the bank is losing customers to other banks that offered products based on these concepts and principles.ABB’s major opportunity for development and growth lies within the bank’s niche market amongst the local community. With proper restructuring of the bank’s policy in banking, the bank can maintain this segment of clientele since locals have been the target market since the bank’s inception.

In addition, the CEO, who is also the owner, has a “substantial inherited personal wealth” that he wishes to reinvest in the bank. In effect, this potential source of capital is essential as the bank seeks to position itself in the competitive banking industry due to the increasing role of Islamic Banking principles and concepts.Finally, the major threat that the bank faces is the increasing role of Islamic Banking, which has made some of ABBs customers switch to banks that offered services based on Islamic Banking principles and concepts.

In line with this, the threat posed by Islamic Banking concepts and principles requires a rethinking since the bank is losing existing and potential customers due to its failure to establish Islamic Banking principles and concepts. Hence, this market trend is a threat to the long-term objectives of the bank and the bank can only restructure to accommodate this market trend.Sultan can restructure ABB’s banking structures and systems to accommodate Islamic Banking concepts and principles. In this case, ABB does not need to carry out a full restructuring and only offer Islamic Banking services, but the bank should incorporate these concepts into the existing products in order to attain new customers while retaining the existing customers.

Hence, the best strategy that Sultan can use is incorporating the concept of Wadiah in the existing framework of ABB.