Performance Consulting Solutions for Banks


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Case Study: Strategic Opportunity Assessments

Bank CFO Selects CMPG to Perform a Strategic Opportunities Assessment

At this bank, the Chief Financial Officer (CFO) was responsible within the Executive Leadership Team for developing and leading the strategic financial goals for this multi-billion dollar institution. Lack of growth and eroding earnings compelled management to identify and implement a succinct solution set to reverse reduced financial performance from historic levels. The organization was coming to the realization that the business model based upon methods, locations and staffing as it had been conducted over prior decades, would no longer provide adequate financial returns to secure independence.

Of critical importance was identifying and articulating the required changes in strategy to key stakeholders and the board. This analysis needed to build upon historic success and how changes in the market have impacted the organization requiring a change in strategic direction.

This is why CMPG with our unique analysis methods were engaged to lead this effort.

The CFO, coupled with the Executive Leadership Team, set out to secure assistance to accomplish the following:

  • Identify appropriate benchmarks to evaluate performance against peer organizations
  • Based upon the peer benchmarking effort, identify strategies that would allow improvement in key performance metrics
  • Quantification of the improvement expectations over a designated time horizon
  • Identify trends that would indicate future earnings concerns
  • Evaluate the complexion and risk exposure to income sources and income diversity
  • Create a roadmap of steps that could be presented and approved for implementation

The project focused on ensuring that an appropriate peer group was assembled and analyzed across multiple time periods. CMPG utilizes a proprietary EarningsVision Normalized Index (EVNI) which compares and normalizes the evaluation across over fifty performance category comparisons.

For example:

  • How and where are peer organizations outperforming or underperforming our client?
  • What are the metrics required to ensure improvement is being monitored?
  • What is the impact to overall profitability from key income statement measures and ratios?
  • Is underwriting identified in the comparison as a strength or weakness?
  • What is the comparative diversity and density of Non-Interest Income?
  • What are the comparative staffing strategies and organizational structure?

A plan was drafted that allowed the completion of the project over a 30 day period. This included:

  • A participative evaluation and selection of the comparative peer group
  • Identification of areas of performance strength
  • Identification and quantification of existing performance shortfalls
  • Identification of revenue and expense potential profit deterioration
  • Development of a strategic plan, with defined steps to improve financial performance

Company:Southern Regional Bank
Asset Size:$4 Billion
Services:Project Management
Duration:30 Days
Key Challenges:
  • Identify appropriate benchmarks to evaluate performance against peer organizations
Key Benefits:
  • The detailed assessment of performance was completed by an un-invested party in the status quo
  • Detailed strategies emerged from the analysis that allowed creation of tactical plans to immediately initiate steps and stages of financial improvement
  • Performance metrics were identified to allow tracking of performance improvement momentum