bank performance i brent vanderheide. discussion starter q: which bank would you rather own and why?...

Bank Performance IBrent Vanderheide

Discussion StarterQ: Which bank would you rather own and why?

Bank A Bank BDifference

A-BInterest Income 3.55% 3.90% (0.35%)

Interest Expense 1.15% 0.60% 0.55%

Net Interest Income 2.40% 3.30% (0.90%)

Provision 0.80% 1.25% (0.45%)

Non Interest Income 1.70% 2.25% (0.55%)

Non Interest Expense 2.00% 3.00% (1.00%)

Net Overhead 0.30% 0.75% (0.45%)

Pretax Income 1.30% 1.30% -

Income Taxes 0.30% 0.30% -

Net Income 1.00% 1.00% -

2

Our Journey: Year 1 Retail Strategy

Retail Strategy• Customer acquisition• Branding & marketing• Product & pricing• Delivery optimization

Bank Management Strategy• Economic value & risk• Capital considerations• Analyst influences• 360° executive

management

Financial Strategy• Financial analysis• Key performance

drivers• Earnings power• Risk considerations

3

Objectives for Today’s Discussion

Understand the drivers behind Retail Bank Performance; connect drivers and outcomes

Explore Quality vs. Quantity of earnings—does it matter?

Provide some insight you can use in running your MarketSim bank and your Retail franchise back home

4

By way of review…Financial statements are a tool to summarize the results of the bank’s business activities. They represent the cumulative impact of transactions done by the bank and by the bank’s customers

Balance Sheet Income Statement Represents the financial

position of the bank as of a specific point in time (the balance sheet date)

Reflects all the assets, liabilities (obligations), and shareholders equity (investment) as of that point in time

Summarizes the income and expense impact of transactions over a specific period of time

Reflects all the income or revenue generated, and all expenses or costs incurred

The bottom line result – net income (or loss!) – is added to the Retained Earnings account (part of shareholders equity) on the balance sheet

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For Example:Balance Sheet

December 31, 2013Cash $100

Loans $1,000

Total Assets $1,100

Deposits $950

Shareholders Equity $150

Total Liabilities and Shareholders Equity $1,100

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Income Statement reflects Revenue & Costs:

Income Statement for year ended December 31, 2014

Transactions from January 1, 2014 through December 31, 2014

Interest income $50 (a) Rec’d interest at 5% rate on loans

Interest expense $(19) (b) Accrued interest at 2% rate on deposits

Net Interest income $31

Non Interest income $5 (c) Service charge fee

Non-interest expense $20 (d) Paid rent and salaries for the year

Pretax income $16

Income taxes $4

Net income $12

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Balance Sheet reflects increase in Cash, Deposits, and Profits:

Balance Sheet December 31, 2013

Results of 2014 Transactions

Balance Sheet December 31, 2014

Cash $100 +50+5-20-4 $131

Loans $1,000 $1,000

Total Assets $1,100 $1,131

Deposits $950 +19 $969

Shareholders Equity

$150 +12 $162

Total Liabilities and Shareholders Equity

$1,100 $1,131

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What this looks like in MarketSim

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What this looks like in MarketSim

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How to evaluate Performance11

Q: Bank A earned a 1% ROA for the period ending 12/31/14. How do you feel about that?

Comparison Time Period Questions to Ask1. Against Itself Analysis of bank

performance against itself over time (trend)

Are the results of management’s chosen strategy becoming more evident over time?

Do I like the direction?

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Comparison Time Period Questions to Ask1. Against Itself Analysis of bank

performance against itself over time (trend)

Are the results of management’s chosen strategy becoming more evident over time?

Do I like the direction?

2. Relative to peer performance

Analysis of bank performance against peers either as of a point in time, or trended over time

Are management’s chosen strategies being executed successfully?

Are these strategies driving better outcomes than peers?

Consider changes in underlying drivers like market share, asset mix, and risk tolerance.

Quantity vs. Quality

Q: Would you rather have high earnings, or high-quality earnings?

A: Both, of course!

The value of the bank is related to the sustainability and volatility of profits, perhaps more than the recent quantity of earnings.

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Quantity of Earnings

2 classic measures to gauge the quantity of earnings:

• Return on Assets

(ROA)

• Return on Equity (ROE)

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Return on Assets (ROA)

Measures the ability of the bank's investments to generate net income

Calculated as:

Commonly expressed as a percent, with 2 decimal places

In our example, ROA is:

$12[($1100+$1131)/2]

Net IncomeAverage Total Assets

= 1.08% or 108 basis points

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Net IncomeAverage Total Assets

Return on Assets (ROA)Balance Sheet

December 31, 2013Results of 2014

TransactionsBalance Sheet

December 31, 2014Cash $100 +50+5-20-4 $131

Loans $1,000 $1,000


Deposits $950 +19 $969

Shareholders Equity

$150 +12 $162


$1,100 $1,131

ROA = $12[($1100+$1131)/2]

1.08% or 108 basis points

= =

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Return on Equity (ROE)

Measures the net income generated based on the shareholders interest

Calculated as:

Commonly expressed as a percent, with 1 decimal place

In our example, ROE is:

Net IncomeAverage Common Stockholders Equity

$12[($150 + $162)/2]

= 7.7%

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Net Income

Return on Equity (ROE)Balance Sheet



December 31, 2014Cash $100 +50+5-20-4 $131

Loans $1,000 $1,000


Deposits $950 +19 $969

Shareholders Equity

$150 +12 $162


$1,100 $1,131

ROE= $12[($150+$162)/2] 7.7%= =

Avg. Common Equity

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Where is Equity in MarketSim?

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What is Equity?19Equity is a Source of Funds and serves as a ‘cushion’ on the balance sheet to reduce the risk that the bank’s creditors won’t be paid.

Investments

Loans

Non-earning

Assets

Bank A

Equity

Other Borrowings

Non-Int Bearing

Interest Bearing Deposits

Bank A

Liabilities & Shareholders Equity

Uses of Funds

Sources of Funds

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-1.00%

-0.50%

0.00%

0.50%

1.00%

1.50%

1930 1940 1950 1960 1970 1980 1990 2000 2010

Commercial Bank Industry Average ROA1934 - 2013

Quantity of Earnings

Source: FDIC, http://www2.fdic.gov/hsob/SelectRpt.asp?EntryTyp=10&Header=1

Q: What kind of ROA should a bank earn?

Commercial Bank Industry Averages (2013 most recent year)

Last 5 years 0.69%

Last 10 years 0.82%

Last 20 years 1.00%

1934 – 2013 series 0.74%

(2003, 1.35%)

(1934, -0.77%)

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The Balanced Scorecard

Q: Quantity of earnings is represented by only 2 metrics on the balanced scorecard, why?

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By way of review…

The Balanced Scorecard is intended to overcome issues with GAAP and focus on what management can control to drive sustainable earnings.

Pros (+) Cons (-)Focuses on Retail Strategy

Looks at all Drivers of Success

Contains both Leading and Lagging Indicators

Factors in Employees

May not directly sync with Exec’s incentive plans

Hard sell to CFO

Will the “Street” give you time for the Scorecard to drive

Earnings?

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Quality of Earnings

Q: Why is quality of earnings important?

A: The value of the bank is related to the sustainability and volatility of profits.

The notion of quality of earnings underlies 2 critical demands on management:

Grow the value of the Franchise

Generate Current Period Profit &1. 2.

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Quality of Earnings

• Net Interest Margin

• Asset Quality

• Non Interest Income

• Efficiency Ratio• Liquidity – Loan to

Deposit Ratio

BSI Metrics used to gauge the quality of earnings:

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Quality of Earnings - Example

Management desires to earn an ROA of 100bp, and have constructed this income statement profile to determine what rate to charge on loans:

Let’s compare that profile to recent results for the industry…

ROA 100 bp

Income Taxes + 30 bp

Non Interest Expenses + 200 bp

Non Interest Income -170 bp

Provision Expense + 80 bp

Interest Expense + 115 bp

Interest Income = 355 bp needed rate on loans

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Quality of Earnings - ExampleExample Bank Industry Average

Last 5 YearsDifference

(Example – Industry)Interest Income 3.55% 3.90% (0.35%)


Net Interest Income 2.40% 3.00% 0.60%

Provision Expense 0.80% 1.10% (0.30%)



Net Overhead 0.30% 1.20% (0.90%)

Pretax Profit 1.30% 0.70% 0.60%

Income Taxes 0.30% 0.20% 0.10%

Net Income 1.00% 0.50% 0.50%

What questions would you have for management?Industry Average Source: FDIC, http://www2.fdic.gov/hsob/SelectRpt.asp?EntryTyp=10&Header=1 (Rounded for Discussion)

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Net Interest Income

Interest income = f(rates earned on loans and investments) + f(proportion of the balance sheet made up of loans vs. securities vs. non-earning assets)

Interest expense = f(rates paid on deposits and borrowings) + f(proportion of the balance sheet funded by interest bearing liabilities vs. non-interest bearing deposits vs. equity)

Net Interes

t Incom

e

Interest

Income

Interest

Expense

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Net Interest IncomeWhich bank would have higher interest income?

Non-earning

Investments

Loans

Investments

Loans

Non-earning

Assets

Bank A Bank B

Equity

Other Borrowings

Non-Interest Bearing Dep


Equity

Other Borrowings

Non-Int Bear


Bank A Bank B

Liabilities & Shareholders Equity

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Interest expense?

Measures the difference between income generated from interest earning assets and interest paid to secure funding

Calculated as:

Commonly expressed as a percent, with 2 decimal places In our example, the NIM is:

Interest Income – Interest ExpenseAverage Earning Assets

Net Interest Margin (NIM)

$50-$19[($1000 + $1000)/2]

= 3.10%

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Net Interest Income








Pretax income $16

Income taxes $4

Net income $12

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Net Interest Income

Net Interest Margin (NIM)Balance Sheet



December 31, 2014Cash $100 +50+5-20-4 $131

Loans $1,000 $1,000


Deposits $950 +19 $969

Shareholders Equity

$150 +12 $162


$1,100 $1,131

NIM= $50 - $19[($1000+$1000)/2] 3.10%= =

Avg. Earning Assets

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HB&T Year 7 TCB Veritas Resource

Net Interest Margin (Assets) $173,980,206 $199,379,281 $146,744,328 $245,814,322 $265,658,098Interest Bearing Assets $5,539,461,953 $5,515,507,930 $6,065,791,996 $7,058,627,212 $6,255,544,808Net Interest Margin / Interest Bearing Assets 3.14% 3.61% 2.42% 3.48% 4.25%

Net Interest Income (Liabilities) $132,221,554 $125,745,629 $174,373,117 $97,491,695 $120,827,783Interest Bearing Liabilities $5,739,459,725 $5,423,700,775 $7,182,312,000 $6,232,652,325 $6,262,738,350Net Interest Margin / Interest Bearing Liabilities 2.30% 2.32% 2.43% 1.56% 1.93%

% of Average AssetsTotal Net Interest Income 5.53% 5.89% 5.29% 4.86% 6.18%Loan Loss Provisions - 1.63% - 1.96% - 1.58% - 2.43% - 2.90%Treasury Balancing Cost - 0.02% - 0.01% - 0.09% - 0.06% 0.00%Net Interest Margin after LLP and Treasury 3.88% 3.93% 3.63% 2.37% 3.28%Non Interest Revenue 2.60% 3.13% 2.00% 1.47% 1.80%Total Revenue 6.48% 7.06% 5.62% 3.84% 5.08%

Variable Costs - 3.18% - 3.75% - 2.46% - 1.90% - 2.48%Fixed Costs - 0.61% - 0.54% - 0.54% - 0.56% - 0.36%Delivery Costs - 0.82% - 1.19% - 1.50% - 0.58% - 0.72%Marketing Costs - 0.12% - 0.13% - 0.05% - 0.12% - 0.12%Service Costs - 0.25% - 0.20% - 0.23% - 0.20% - 0.22%Corporate, Compliance, and Regulatory Costs - 0.29% - 0.29% - 0.27% - 0.23% - 0.26%Total Costs - 5.28% - 6.10% - 5.05% - 3.58% - 4.16%Net Income before taxes 1.20% 0.97% 0.57% 0.26% 0.91%

Strategy in the Sim…Q: Which portfolio would you rather have based on Margin?

Net Interest Margin / Interest Bearing Assets 2.39% 2.28% 2.87% 1.38% 1.93%

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Provision

Provision = the credit loss expense for the (year; quarter; month)

Provision expense is based on a forecast of future credit losses. This forecast reflects: Recent past results, for example loan charge-offs in the last

year Forward looking indicators, for example the percentage of

loans that are delinquent as of the balance sheet date Environmental factors, for example the health of the housing

market may influence losses in a mortgage portfolio

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What is Risk?

Q: Is RISK the occurrence of a LOSS?A: NO!

Losses are an expected part of doing business Expected losses are included in the calculation

when you set the price. For example:

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Setting a Loan Rate

Income Contribution RateDesired Profit 1.50%Income Tax .50%Operating Expenses 1.50%Expected Credit Loss 1.00%Cost of Funds 0.75%Needed Customer Rate 5.25%

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What is Risk?

Risk is volatility in the range of possible outcomes; it is the possibility

of not achieving your objective.

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What is Risk?

Q: Is RISK the occurrence of a LOSS?A: No!

Risk taking results in volatility of [credit losses, net interest income, liquidity, etc.] – reflecting business choices

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Provision






Provision for Credit Loss $10 (e) 1% expected loss on $1,000 of loans



Pretax income $6

Income taxes $1

Net income $5

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Allowance for LossesBalance Sheet



December 31, 2014Cash $100 +50+5-20-1 $134Loans $1,000 $1,000

ALLL $0 +10 ($10)Total Assets $1,100 $1,124

Deposits $950 +19 $969Shareholders Equity

$150 +5 $155


$1,100 $1,124

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Asset Quality on BSI

Provision = f(expected loss by asset class as an outcome of risk appetite, credit standards, and go-to-market strategy) + f(environmental factors)

Average Earning Assets = f(target customer segments, product design, credit policy, other competitive factors)

Provision to Assets

Provision

Average

Earning

Assets

40

Measures the level of current period provision (expected loss) as a percent of average earning assets

Calculated as:

Expressed as a percent, with 2 decimal places In our example, Provision to Assets is:

ProvisionAverage Earning Assets

Asset Quality on the BSI

$10[($1000 + $990)/2] = 1.01%

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Asset Quality on the BSIBalance Sheet



December 31, 2014Cash $100 +50+5-20-1 $134

Loans $1,000 $1,000ALLL $0 +10 ($10)Total Assets $1,100 $1,124


$150 +5 $155


$1,100 $1,124

Provision= $10

[($1000+$990)/2] 1.01%= = Avg. Earning Assets

Provision to Assets

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Asset Quality43

Which bank would have better Asset Quality, all else held equal?

Non-earning

Investments

Home Equity

Investments

Home Equity

Non-earning

Assets

Bank A Bank B

Credit CardCredit Card

Lines / LoansLines / Loans

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Net Interest Margin (Assets) $173,980,206 $199,379,281 $146,744,328 $245,814,322 $265,658,098Interest Bearing Assets $5,539,461,953 $5,515,507,930 $6,065,791,996 $7,058,627,212 $6,255,544,808Net Interest Margin / Interest Bearing Assets 3.14% 3.61% 2.42% 3.48% 4.25%

Net Interest Income (Liabilities) $132,221,554 $125,745,629 $174,373,117 $97,491,695 $120,827,783Interest Bearing Liabilities $5,739,459,725 $5,423,700,775 $7,182,312,000 $6,232,652,325 $6,262,738,350Net Interest Margin / Interest Bearing Liabilities 2.30% 2.32% 2.43% 1.56% 1.93%

% of Average AssetsTotal Net Interest Income 5.53% 5.89% 5.29% 4.86% 6.18%Loan Loss Provisions - 1.63% - 1.96% - 1.58% - 2.43% - 2.90%Treasury Balancing Cost - 0.02% - 0.01% - 0.09% - 0.06% 0.00%Net Interest Margin after LLP and Treasury 3.88% 3.93% 3.63% 2.37% 3.28%Non Interest Revenue 2.60% 3.13% 2.00% 1.47% 1.80%Total Revenue 6.48% 7.06% 5.62% 3.84% 5.08%

Variable Costs - 3.18% - 3.75% - 2.46% - 1.90% - 2.48%Fixed Costs - 0.61% - 0.54% - 0.54% - 0.56% - 0.36%Delivery Costs - 0.82% - 1.19% - 1.50% - 0.58% - 0.72%Marketing Costs - 0.12% - 0.13% - 0.05% - 0.12% - 0.12%Service Costs - 0.25% - 0.20% - 0.23% - 0.20% - 0.22%Corporate, Compliance, and Regulatory Costs - 0.29% - 0.29% - 0.27% - 0.23% - 0.26%Total Costs - 5.28% - 6.10% - 5.05% - 3.58% - 4.16%Net Income before taxes 1.20% 0.97% 0.57% 0.26% 0.91%

Net Interest Margin on Assets - LLP 1.51% 1.66% 0.84% 1.05% 1.35%

Strategy in the Sim…Q: Which loan portfolio would you rather have?

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Net Overhead

Non Interest Income is primarily influenced by the business mix of the bank. Major categories of non interest income include deposit service charges, debit and credit card interchange and fees, trust fees, and mortgage fees

Non Interest Expense compromises both recurring expenses (major categories include personnel expenses, facilities (including branch) costs, operations and technology) and non-recurring expenses (notably goodwill impairment)

Consider the sustainability question – are all fees created equal? Should all expenses be viewed in the same light?

Net Overh

ead

Non Interes

t Incom

e

Non Interes

t Expen

se

45

Measures Non Interest Income contribution to ROA (as a percent of average earning assets)

Calculated as:

Expressed as a percent, with 2 decimal places In our example, Non Interest Income to Assets is:

Non Interest IncomeAverage Earning Assets

Non Interest Income to Assets

$5[($1000 + $990)/2] = 0.50%

46

Non Interest Income to AssetsBalance Sheet



December 31, 2014Cash $100 +50+5-20-1 $134



$150 +5 $155


$1,100 $1,124

Non Interest Income= $5

[($1000+$990)/2] 0.50%= = Avg. Earning Assets

Non Int. Inc. to Assets 47

47

Measures the level of operational expense it takes to generate a dollar of revenue

Calculated as:

Commonly expressed as a percent, with 1 decimal places In our example, the Efficiency Ratio is:

Non Interest ExpenseNet Interest Income + Non Interest Income

Efficiency Ratio

$20($5 + $31)

= 55.5%

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Efficiency RatioIncome Statement for year ended December 31, 2014


Interest income $50 (a) Rec’d interest at 5% rate on loansInterest expense $(19) (b) Accrued interest at 2% rate on depositsNet Interest income $31Provision for Credit Loss $10 (e) 1% expected loss on $1,000 of loansNon Interest income $5 (c) Service charge feeNon-interest expense $20 (d) Paid rent and salaries for the year

Pretax income $6Income taxes $1Net income $5

Non-interest Expense= $20

($5+$31)= =55.5% Total RevenueEfficiency

Ratio

49

Q: What causes bank failures?A: Insolvency (meaning not enough capital)?

Or lack of liquidity?

Consider IndyMac

Liquidity Risk

50

Liquidity risk is the possibility that over a specific time horizon the bank will become unable to settle obligations

with immediacy

Liquidity Risk

51

Liquidity Risk

How you can create liquidity risk As chief retail officer, you create two products – 5 year

fixed rate loans, and money market savings accounts Loan customers have the option to prepay, but the

bank has no option to demand early payment Deposit customers have the option to withdraw any

and all funds daily, but the bank has no option to restrict withdrawals

Does the bank have liquidity risk?

52

Measures the proportion of deposit funds that are invested in less liquid loan assets

Calculated as:

Commonly expressed as a percent, with 1 decimal places In our example, the Loan to Deposit Ratio as of

December 31, 2013 is:

Total LoansTotal deposits

Loan to Deposit Ratio

$990$969

= 102.2%

53

Loan to Deposit RatioBalance Sheet



December 31, 2014Cash $100 +50+5-20-1 $134



$150 +5 $155


$1,100 $1,124

Total Loans= $990

$969 102.2%= = Total Deposits

Loan to Deposit Ratio

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AssetsLoans $608,561,427 $358,887,069 $213,219,396 $458,271,892 $944,233,720Lines $475,559,775 $72,080,970 $1,004,664,180 $907,454,640 $874,156,020Credit Card $1,535,792,751 $1,703,403,891 $1,174,660,420 $1,799,860,680 $2,257,047,068Home Equity $2,919,548,000 $3,381,136,000 $3,673,248,000 $3,893,040,000 $2,180,108,000

Total $5,539,461,953 $5,515,507,930 $6,065,791,996 $7,058,627,212 $6,255,544,808

LiabilitiesChecking Total $2,282,910,600 $2,721,426,500 $3,378,438,950 $1,457,345,550 $2,801,247,000Savings $370,967,925 $180,935,625 $389,187,650 $491,917,950 $494,713,800Investment $28,584,950 $29,772,800 $66,568,400 $29,895,000 $8,212,050Money Market $1,466,264,250 $289,951,350 $1,110,645,000 $2,124,188,325 $1,280,256,000CD $1,590,732,000 $2,201,614,500 $2,237,472,000 $2,129,305,500 $1,678,309,500

Total $5,739,459,725 $5,423,700,775 $7,182,312,000 $6,232,652,325 $6,262,738,350

TreasuryTreasury Borrowing $0 $91,807,155 $0 $825,974,887 $0Treasury Lending $199,997,772 $0 $1,116,520,004 $0 $7,193,543Treasury Cost* $999,989 $459,036 $5,582,600 $4,129,874 $35,968

Liquidity RiskLoans $5,539,461,953 $5,515,507,930 $6,065,791,996 $7,058,627,212 $6,255,544,808Deposits $5,739,459,725 $5,423,700,775 $7,182,312,000 $6,232,652,325 $6,262,738,350Loan- to- deposit Ratio 96.5% 101.7% 84.5% 113.3% 99.9%

* Treasury Rate: 0.50%

Strategy in the Sim…Q: Which Market$im bank illustrates the lowest liquidity risk?

55

The Balanced Scorecard

We have reviewed Quantity of Earnings and a handful of normative metrics on Quality of Earnings, but what about the Drivers of Earnings?

c

56

56

Retail Bank Profitability Equation

NIM Net Interest Margin NII Non Interest Income NIE Non Interest Expense RLL Retail Loan Losses

NIM NII NIE RLL NIB

T

57

Customer Based Profitability

Moves financials out of accounting to the people who generate the profits

Can be computed on a single customer, a geography, or a market segment

Actionable information

58

Customers

Products per

Customer

Product Profitab

ilityDelivery

Costs Profits

Drivers and Outcomes

In order to drive long-term sustainability and current period balance sheet and income statement outcomes, Retail officers must focus on the underlying drivers.

Drivers must… Outcomes must… Be actionable Be measurable Be controllable by Retail

bank management Lead to long-term

predictable expected outcomes

Represent the future of your strategy

Be long-run focused Be not only bottom line

focused Drive current period

financial performance and great long-term value

59

Drivers on the BSI

Driver Description Customer ProfitabilityCRA LMI Performance Specialized products and

marketing Increased delivery costs

Product Breadth Products offered Broader customer appeal Increased product cost

Access to Delivery Branches, ATMs and Channels

Increased delivery costs Customer appeal & retention

Customer Service Call Center, Mobile & Online Increased delivery costs Customer appeal & retention

Market Share Customers, Balances More customers! Increased efficiency

Turnover Customers gained / lost Customer retention / growthCost per Tran Expenses, transactions Optimize delivery cost

60

Bank Performance Summary

Quantity

Quality

Business Strategy

Drivers

Outcomes

BSI Metric

ROE, ROA

Asset Quality, Liquidity Ratio, Efficiency Ratio, NIM, Non-interest income to Assets

CRA, Product Breadth, Access to Delivery, Customer Service, Market Share, Turnover, Cost per Tran

61

Why does this Matter?

This matters because we are managing a bank to create value!

Stock Price = EPS x P/E[earnings per share; price earnings ratio]

P/E = f(future earnings, variability of future earnings)

Variability = f(inherent risks, quality of risk management)

62

Compare two banks … different strategies, different results





Provision 0.80% 1.25% (0.45%)



Net Overhead 0.30% 0.75% (0.45%)



Net Income 1.00% 1.00% -

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Bank A Strategy Low investment operator (but might look like low cost operator) National geographic reach Reliance on wholesale deposits for funding Reliance on broker network for loan origination Limited customer cross sell and depth of relationship Non interest income primarily related to fees from selling loans

Bank B Strategy Tight geographic focus, dense retail delivery network Reliance on customer deposit base for funding Focus on in-market and customer cross-sell for loan origination High depth of relationship (number of services per household) Non interest income primarily related to core deposit productsLet’s look at the results again!

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Provision 0.80% 1.25% (0.45%)



Net Overhead 0.30% 0.75% (0.45%)



Net Income 1.00% 1.00% -

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Back to our Objectives…

Understand the drivers behind Retail Bank Performance; connect drivers and outcomes

Explore Quality vs. Quantity of earnings—does it matter?

Provide some insight you can use in running your MarketSim bank and your Retail franchise back home

66

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bank performance i brent vanderheide. discussion starter q: which bank would you rather own and why?...

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