SWOT Analysis of Bank Alfalah

Since its establishment in 1992, Bank Alfalah has grown to nearly 200 branches throughout the middle east. The bank has established itself as a reputable lender with opportunity for growth. A SWOT analysis can aid in understanding what strengths, weaknesses, opportunities, and threats may affect this business in coming years.

The core strength of Bank Alfalah is in providing Halal banking services. Halal is Arabic for, "that which is permissible"; Halal banking follows traditional Muslim laws. With a strong market in middle eastern countries. Their position in the oil rich middle east gives them a strong home market. Additionally, Bank Alfalah notes that they have a strength in correspondent banking, a form of banking that uses partner banks to transfer funds between different regions of the globe.

Bank Alfalah's adherence to Halal standards may be a strength in some markets, but it is a weakness in the west that makes moving outside of its home region market difficult. Specifically, adhering to Halal standards means that Bank Alfalah cannot offer the same range of products as conventional banks.

With the growth of Islam in the western world, Bank Alfalah has the opportunity to expand beyond the middle east and into markets in the United States and Europe in order to offer Halal banking services. Bank Alfalah notes that Islamic banking is currently growing at twice the rate of conventional banking throughout the world.

The main threat to Bank Alfalah is the threat posed by western banks who are able to engage in less restrictive sources of revenue generating. Bank Alfalah freely admits that they do not offer the full range of products of conventional western banks. These banks may pose a threat to them in their home market and will certainly pose a threat if they choose to expand into western markets.