Tag: Capital Allocation

What Bank Business Lines Will You Invest In?

Bank Capital Allocation Strategy

If you have an MBA or have any corporate strategy training, undoubtedly you have been exposed to the famous Boston Consulting Group’s Boston Matrix. McKinsey & Company promoted their version of it and Jack Welsh at General Electric made it an art form. The framework is used by many banks today and charts each line of business along the twin dimensions of growth potential and market share. The problem is, this framework can get a community bank in trouble.

Balance Sheet Rebalancing For Banks In 2016 – The Macro View

Rebalancing Bank Balance Sheets In 2016

The truth is that your bank should discuss balance sheet rebalancing every time credit spreads or rates are expected to materially change, any time the risk tolerance of the bank changes or at least once per year. 2016 just happens to coincide with the start of a rising interest rate cycle so now is the perfect time to have that conversation with your board and management team if you haven’t done so already. Every fund manager knows that making the right asset allocation decision is one of the best ways to stay ahead of the competition.

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