Most community banks are interested in booking local C&I loans but are unable to generate meaningful outstanding balances.
Banks that are moving away from being transactional have recently been promoting more bundled accounts. For example, banks on their game actively market a high-net-worth elite checking product to the principals of their commercial accounts and commercial account packages to their high net worth business owners. This tactic can dramatically increase both new account growth and lifetime value.
We published an article on whether a centralized or decentralized banking model was best (HERE) last month that generated many comments both for and against. One such rebuttal, from a well-respected bank CEO of a $1B community bank, summed up the counter argument nicely.
Below you will find a link to Season 1, Episode 2 of our new podcast. You should go to iTunes and subscribe as podcasting is our latest experiment and this is really our intro episode that explains why we podcast and more importantly answers a question that we get asked all the time – why we share our data, policies, products, and thoughts with other banks. We also answer the question why we did an intro episode as our second show, instead of our first. We also set up our objectives for the first season.
Operational risk gets the short shrift in banking. Credit and interest rate risk are the big men and woman on campus (just to throw in a back to school metaphor) while operational risk is usually relegated to the shallow end of the pool. That is unfortunate because operational risk is real and often realized more than both credit and interest rate risk. Take payment risk for example.
It is likely your bank gives away plenty of gifts. For example, you likely have branded pens in your branch for the taking or have a bowl of candy. While nice, that does very little to help customer satisfaction. However, if you take that same gift and present it a different way, it can make a difference. In this post, we explore that art of bank gift giving and at the risk of sounding too Machiavellian will discuss how you can make that gift more meaningful.
The Academic Research
If banking had an Olympics, creating loan value would be an event. While many lenders and business development officers are good at gathering new business, they are often reactionary when it comes to structure not taking the time to find the best structure for the client. They may provide what the client wants, but not what the client needs.
It was in the 1930’s when in an attempt to stimulate lending to help post-depression economic growth, the U.S. government gave certain banks access to U.S. post office boxes so that they could collect their due loan repayments. Banks would enter their local post office after hours with their keys, open their PO box, grab the mail that was set to be delivered the next day, deposit the receipts and deliver the remittance document.
Ahh, the gentle breeze of Havana – the music, the people, the cigars, the mojitos and the embargo. Given the thawing relations and the new rules announced by the Obama administration, banking and financial transactions are now loosening….somewhat. While the lifting of the embargo will take an act of Congress and is not expected to be reviewed until next year, American companies are already in motion in preparation.
Commercial banks grew loan balances by 2.11% in the second quarter of this year compared to the first. This growth belies that some banks increased their commercial loan portfolios more than the industry average and other banks experienced shrinking loan volumes. While the industry is experiencing much needed total growth, that growth is not evenly distributed among banks.
- 1 of 2
- next ›