--%>
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 : When the dividend shows real money The

    The dividend is the part of the net income which the company distributes to shareholders. When the dividend shows real money, the net income is also real money. Is it true?

    		•
  • Q : Calculate their after tax cost of debt

    Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of whichrequire semiannual interest payments. Bond A has a coupon rate of 4.0%; a price qu

    		•
  • Q : Explain influences of financial

    Does financial leverage (i.e. debt) have any influence on the Free Cash Flow, upon the Cash Flow to Shareholders, upon the growth of the company and upon the value of the shares?

    		•
  • Q : Calculating the Cost of Equity You are

    You are an analyst in the financial division of Flipper Industries (FI) which has a beta of 1.80 (you are risk-philic, so you enjoy the thrill of working somewhere so risky). The company just paid a dividend of $1 and dividends are expected to grow at 5% per year. The

    		•
  • Q : Efficient Market Hypotheses Write

    Write Efficient Market Hypotheses in brief?

    		•
  • Q : How present value of tax shields be

    I have two valuations of the company that we set as an objective. Within one of them, the present value of tax shields (D Kd T) computed using Ku (required return to unlevered equity) and, in one, by using Kd (required return to debt). The second valuation is too high

    		•
  • Q : Explain breakthroughs on

    Explain breakthroughs on low-discrepancy sequences.

    		•
  • Q : Explain market efficiency hypothesis

    According to what I read inside a book, market efficiency hypothesis means that the expected average value of variations is zero in the shares price. Thus, the best estimate of the future price of a share is its price now, as this incorporates all the available inform

    		•
  • 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 : Does the equity of shareholders have

    Does the equity of shareholders represents the savings a company has accumulated by the years?

    		•