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.