Top 10 Ways Banks
Can Grow in 2012
Source:
Grant Thornton LLP
www.us.gt.com
Even in the
midst of current
industry
challenges,
banks can
take simple
steps to grow
in the year
ahead, according to a recently released
report by Grant Thornton LLP.
With the squeeze in interest margins,
decrease in lending opportunities,
and increase in capital-level requirements,
bankers need to focus more
clearly on where to deploy capital for
the greatest return.
The following are excerpts from
the report titled “Top 10 ways banks
can grow in 2012.” For more details,
visit:www.us.gt.com.
1. Focus the strategic plan on growth
Banks should develop and modify
their 2012 strategic plans with a renewed
emphasis on growth objectives.
This focus may include:
• training and incentive program
changes that may be needed to incent
employees to assist in growth objectives
• focus marketing and public relations
budgets and promotional campaigns
on growth
• investing in business intelligence
and related IT advancements that will
support research of growth opportunities
• e-evaluating previous decisions to
exit certain products and markets that
may now be profitable
• examining large or profitable customers
lost in past years and developing
plans to recapture those relationships.
2. Examine an acquisition
Weaker institutions are deciding
whether they can shoulder the challenges
alone, presenting a potential
M&A opportunity for healthier competitors.
Acquirers should have a
team available to address issues from
the moment they begin evaluating
whether to bid, all the way through
the integration of the acquired institution.
3. Implement smart tax strategies
and structures
Banks should review their state and local
tax positions, examine recent rules
that affect the jurisdictions where they
pay the most tax, and consider new
ideas for dealing with these changes.
Federal benefits from credits and bonus
depreciation should be analyzed.
4. Develop new service offerings
Seek to maximize the reach of existing
service offerings by:
• exploring opportunities presented
by health care reform
• increasing cross-selling
• re-emphasizing services and customers
neglected during the downturn
• considering teaming with other entities
to provide fee services
• acquiring participations in high
quality loans from other banks that
may be shrinking to improve capital
ratios.
5. Make technology work for you
and your customers
• transition to tablets for board and
executive meetings
• examine the use of cloud technology
to better allocate capital and human
resources.
6. Send the right message with social
media
Is your bank using social media wisely
and do you know its risks?
7. Ready your bank for risk
• With constantly emerging and
changing risks, do you know if your institution
is prepared? Do you have a
chief risk officer? Is the board of directors
actively involved in discussions
regarding risk?
• Does your bank utilize an Enterprise
Risk Management approach to assess
and address the full risk profile of the
bank?
8. Understand regulations
• Focus on the regulations for which
the cost and ramifications of noncompliance
can be daunting.
9. Plan for the worst-case scenario:
stress testing
• Stress testing should cover: asset
concentration and credit quality, contagion
risk, and capital structure and
availability.
10. Build a stronger foundation for
mortgage lending
• If properly managed, a new or expanded
mortgage banking effort can
be profitable.