'...the number of companies in the country is expected to increase rapidly.' - Why is that important for a retail bank?

Bank growth strategy
New answer on Feb 24, 2021
5 Answers
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Estelle
Proficient
asked on Oct 27, 2020

Where a retail bank is a division of a bank for personal banking, not for businesses?

Many thanks,

Estelle

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Anonymous A replied on Oct 27, 2020

Think more jobs I believe.

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Jess replied on Feb 24, 2021

So our client can give out B2B loans to new businesses.

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Henning
Expert
updated an answer on Oct 27, 2020
Bain | passed >15 MBB interviews as a candidate

The answer lies in the Key Insight section just below the bullet you quoted in your question:

Key Insights

  • The local market is promising because there are positive macroeconomic trends (Poverty is decreasing because employment is increasing. This increases demand for bank services.)
  • The number of companies is increasing rapidly. (Our client could be these companies’ bank and offer them products such as B2B loans.)

Regarding the second bullet: I could imagine that in markets where a large share of the economy consists of small one-person or one-family enterprises, the difference between retail and corporate banking is fluid.

(edited)

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Anonymous C replied on Oct 27, 2020

More individual transactions which is where they can earn more service charges and fees. More companies doesn't necessarily mean more jobs or a growing economy with more personal deposits but it does mean that the bank has more clients who they can give loans to.

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Anonymous B replied on Oct 27, 2020

More companies - more salaries - more deposits/credit eligible clients. If there is a considerable growth of number of companies that means economy is doing good, there are investors/commercial loans are more affordable, internal market will grow correspondingly.

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