--%>
Assignment Help - homework help

Bank assignment

You have just been hired as the branch manager for a big bank in XYZ. You were told that the bank is going to open a new branch at Island Learning Centre of the Open University of XYZ. The management of the bank is much concerned that the new branch might not be able to attract adequate customers to meet its gain projection. Your task is to propose the different services the bank must offer originally to form an adequate customer base. Below is a list of the services the branch could propose:

• current accounts
• savings deposits
• security underwriting
• personal trust management services
• retirement savings plans
• venture capital loans
• plant and equipment loans
• automobile loans
• residential real estate loans
• home improvement loans.

a) List five kinds of information you will require concerning the local community to aid you decide which of numerous possible services are likely to have adequate demand to make them gainful. Elucidate your answer in short.

b) Divide the probable services into two groups: those you think must be offered opening day and those you believe can be provided later as bank grows. Elucidate your outcome.

E

Expert

Verified

Part (a): Information collected from the local community include

(1) Historical growth rate of underwriting securities in domestic market. The bank can estimate the potential growth rate of this business. Securities underwriting can be profitable for emerging markets

(2) The sentiment of the property market. The sentiment of property market can determine the demand of the mortgage in the market

(3) The penetration rate of retirement savings. This information can help us to estimate the demand for retirement saving plans for the local community.

(4) The forth information required to determine the sentiment of the local population about investment services as it can help the bank to determine the potential growth rate of the personal trust services.

(5) The fifth information collected from local community is the factories in the city. It can be used to estimate the demand for plant and equipment and hence the amount of loans needed

Part (b):

The list of services that should be offered on the first day of business include:

  • Current accounts
  • Saving deposits
  • Residential home loans
  • Home improvement loans
  • Retirement saving plans and
  • Personal trust management services

 

The remaining part of the services in the list should be offered later. The first group of the services is the basic service offered by the bank to personals. For the new bank in the market, it is very important to obtain market presence. The first group of banking service is required to build up the brand.

   Related Questions in Corporate Finance

  • Q : Who described option pricing with

    Who described option pricing with deterministic volatility?

    		•
  • Q : Iterative System Solvers Iterative

    Iterative System Solvers, Power Methods, and the Inverse Power Method for Boundary Value Problems. 1. Code and test Jacobi and Gauss-Sidel solvers for arbitrary diagonally dominant linear systems. 2. Compare performance/results with tridiagonal Gaussian elimination so

    		•
  • Q : What impacts have on value of a

    What impacts have on the value of a business of high inflation?

    		•
  • Q : Profitability Ratios Profitability

    Profitability Ratios: These ratios comprise the Gross profit Margin, Net profit Margin, Operating Margin, Return on Equity (ROE), and Return on Total Assets. Such ratios help the firm to examine its profitability, the trend in profits and aid to take

    		•
  • Q : Define Capital Projects Capital

    Capital Projects: It is a long-term investment made in order to build on, add or enhance on a capital-intensive project. A capital project is any undertaking that requires the usage of notable amounts of capital, together with financial and labor, to

    		•
  • Q : Define the term Stock Market crash

    Stock Market Crash was responsible for the Great Depression. Middle class families lost all their savings as they had gambled the market on margin.Those banks which were under the loan ofbrokers’ started removing money out of the savings account

    		•
  • Q : Problem on raising new capital AB

    AB Corporation has 3 million shares of common stock selling at $19 each. It also contains $25 million in bonds with coupon rate of 8%, selling at par. AB requires $10 million in new capital that it can raise by selling stock at $18, or bonds at 9% interest. The expect

    		•
  • Q : Define Effective Utilization of Funds

    Effective Utilization of Funds: It is just the decision to maximize the return on investment of funds. When finance manager is not capable to raise the return by investing fund in profitable assets or other profitable projects, company’s busines

    		•
  • Q : Could we explain that the shares’ value

    Could we explain that the shares’ value is intangible?

    		•
  • Q : Problem on arbitrage opportunity John

    John Chan considers purchasing a six-month stock futures contract on the shares of Li & Fung Limited. Shares of Li & Fung Limited are now presently trading at $50 per share and it is predicted that Li & Fung Limited will pay a dividend of $1 per share in o

    		•