Private Bank Anytown disposes total assets of approx. EUR 3 bn on December 31, 2014. The growth strategy of the institution determined at the end of 2010, however, has a higher impact on the cost side than on the income side.
Aggregated to the return on equity as defined central parameter of the bank, the negative result of EUR -640 k in 2014 resulted in a key figure of -0.3%. Thus, the bank is miles away from the target parameter of 20% ROE defined by the supervisory board. Since no improvement is in sight for 2014, the board of directors of Private Bank is asking you for help.
Further Questions
Which important functions can be fulfilled by a consultancy in this case? How could the consultancy’s task structure look like?
Possible answer:
The first important function that can be realized by a consulting company with a “view from the outside” has already been derived. Benchmark values from vast research work and project experience are provided for the consultants allowing for—as mentioned before—identifying “market-usual” income parameters for individual institutions and calculating potentials. If a credit institution decides to fill the income gap together with zeb, further tasks will arise.
*box-open green*Share Diagram 3 with an overview of the project setup (see below).*box-close*
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In addition to the annual reports of Private Bank which have already been prepared by your colleague, the research department of your institution could already compile first reference values of the private banking sector.