THE BANK, Strategic Analysis
In addition to the external pressure, the internal factors played their role as well. In a highlycompetitive environment, with low barriers to entry, under a continuous pressure from not onlythe large banks but from non-banking businesses that now offer substitute products, THE BANK found a strategy to maintain itself at a level of profitability. The interest income, the major contributor to the total income, shows a general upward trend; the interest margins, always under considerable pressure because of the intense competition for deposits, were found to be the keyinstrument of effectiveness. The second quarter was the most challenging, yet THE BANK remained profitable. Here are few input indicators of THE BANK strategy to success, all of themanalyzed in depth within the paper:
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the management was committed to maintain a ratio of loans to funding sources at amaximum of 90%;
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the capital structure has been adequate to support anticipated asset growth, as well as toserve as a cushion to absorb potential loses;
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asset/liability management activities have been designed to ensure adequate liquidity tomeet loan demand or deposit outflows; nonetheless the impact of interest rate fluctuationson net interest income was closely watched;
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both, a market penetration strategy with focus on increasing market share and loyalty anda product development strategy, a good tactic to help customers to overcome theeconomic downturns;
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an active presence in the community life making an in depth understanding of communityneeds possible as well as promoting a positive image;
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Introduction
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