Competitive Advantage: First National Bank

Topics: Bank, Namibia, Online banking Pages: 11 (2872 words) Published: May 13, 2009


Competitive advantage can be defined as anything a firm does better compared to rival firms or do or own something that other firms doesn’t.

We chose First National Bank (FNB) Namibia Holdings, given the highly competitive market it is trading in as well as the type of products and services they deal in.

Here are some of the questions we are going to try to answer in this paper.

How big is the market and how tight is it?
What is FNBs financial position?
What strategies do they have in place to attract investors? How reliable are the customers to the company?
What is FNB’s level of competitiveness?

FNB Namibia Holdings Limited operates as a financial services group. It offers cross-selling of banking and insurance products and services.

First National Bank commenced its activities in 1915 as the National bank of South Africa. In 1926 it was integrated with Barclays Bank. In 1987 the Anglo American Corporation acquired Barclays’ shareholding. First National bank of Namibia, which was established in 1988, became a Namibian subsidiary of First National Bank of South Africa. FNB Namibia was listed on the Stock Exchange in 1997. Shortly thereafter, management control of FNB of South Africa passed the Rand Merchant Bank in a transaction that saw the creation of the FirstRand Group. FNB Namibia subsequently became a subsidiary of FirstRand bank Holdings Ltd. FNB Namibia Holding Limited was incorporated in June 2003. It is the direct result of the merger between FNB of Namibia Limited and Swabou Holdings. The new Namibian financial powerhouse was created as a result of the visionary business consideration to create opportunities to attain significant economies of scale and scope with regard to operations and product offerings between First National Bank and Swabou Holdings.

Black Namibian ownership
During December 2004, a BEE (Black Economic Empowerment) transaction was concluded which resulted in Namibian investors, with a broad base of beneficiaries, owning almost 45% of FNB Namibia Holdings. The BEE consortium consist of two broad based groupings, Sovereign Capital (Pty) limited and Chappa’ Ai Investment 42 (Pty) Limited, as well as staff and black non-executive directors.

Competitiveness of First National Bank
Following the merger, about 290 former Swabou employees joined the rank and file of FNB Namibia Holdings, together with First National Bank’s total of 1160, reflecting the rich cultural and ethnic diversity of Namibia; Following the directives of the Employment Equity Commission, the Group has adopted and Affirmative Action Policy to achieve equity in the workplace and to enhance business competitiveness; FNB offers customized loans with competitive rates:

Commercial Construction and Real Estate Loans
Equipment Loans
Line of Credit
Small Business Administration (SBA) Loans
FNB Online Banking, previously Business Internet Solutions (BIS), is an Internet based, electronic banking solution designed with business needs in mind. This new solution merges First National Bank’s consumer and Business Internet banking solutions into a single offering. On login you are presented with a new enhanced website that includes a new look and feel as well as improved navigation features. The functionality is unchanged for business and corporate clients who previously used BIS. The electronic banking solution is suitable for small, medium and large businesses and offers an extensive range of functionality including: Optional dual authorization of payments

Post-dating of payments up to 12 months in advance
Real-time payments to FNB accounts
Same day value for payments to other banks
Referencing for all transactions
Remittance advices sent via fax or email
SMS notification of batch payments status
60 days transaction history on FNB accounts
Multiple levels of access and authorization (i.e. the option of restricting access as well as authorization ability on selected FNB...
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