The past decade has been a trying time for banks. In a flat interest rate environment, thin margins on loans and overall difficult economic conditions have made it difficult to drive revenue growth based on loan portfolios. As Financial Institutions have focused on other ways to grow, the average share of net revenue non-interest income has expanded to over 40 percent. Yet, a survey done by American Banker magazine reported that 15% of bank corporate clients studied were actually unprofitable. So clearly something is amiss here. Banks need profitable corporate relationships to keep growing the bottom line, but too many of those relationships are actually a drag on profits. This is a serious conundrum that banks need to address – how to keep growing profits by getting the right deals?
Category: Bank Commercial Pricing
Ideas on improving pricing strategies for commercial banks.