Commercial Bank Management Project Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Commercial Bank Management Project Case Study Solution

The reduced return on equity should be the serious concern of the bank on the ground that the investors found return on equity a much better metric at evaluating and assessing the growth of the bank and market value due to which Synovus focuses on better management of capitalwith core consideration of maximizing the value of shareholders versus growing earnings.

The policies of the regulatory authorities such as FBR’s monetary policies, competitive pressure and the local and regional economic conditions could affect the net interest income of the bank. In case of increase in the rate of interest, the company offers attractive interest rates to its depositors to compete for depositor in the primary market areas. To deal with the risk of increase and decrease interest rates, the bank has ongoing procedures and policies designed to manage the risk related to the changes in the market interest rates through hedging and other risk mitigation strategies(report, 2019).

Discuss about off-balance sheet items. Compared to the peers does the bank have more or less? Could you provide some reasons?

The off-balance sheet items refers to those items which are not directly owned by the bank and does not appear in the basic format of the balance sheet of the bank. The off-balance sheet items of the Synovus Bank included total unused commitment as well as the derivatives. The total unused commitment of the Synovus Bank is 26.85 percent, lower as compared to the unused commitment of the peer group i.e. 48.14 percent,which shows that the undrawn portion of the extended line of credit of firms and consumers, which could be drawn upon as required and would be converted into loan when the borrower draw on their line of credit.The reason behind the low unused loan commitment of the Synovus Bank could be to increase the loan rates (Kwan, 2010).

Another off-balance sheet balance of the Synovus Bank and the peer groups is the derivatives reported in the enhanced financial accounts. The derivatives of the Synovus Bank is 20.14 percent which is much lower that the derivatives of the peer groups i.e. 1098.62 percent, which shows that the Synovus Bank entered into the derivative contract to purchase the protection and to hedge its respective exposure (Meisenzahl, 2015).The difference between the derivatives of the Synovus Bank and the peer groups shows that the Synovus Bank less aggressively alter its exposure to the specific form of risk with the use of the off-balance sheet derivatives, the reason might be the fact that the losses on the derivative tends to restrict the financial institution from having sufficient regulatory capital (How do banks use financial derivatives?, 2009).

Comment on bank’s operational strategy compared with the competitor: what you like and dislike and provide you suggestions.

At Synovus Bank, the operation are recognized as a strategic function in the banking institutions as well as the investment in the new technologies is strategically directed with core consideration of strengthening the various operation decisions of the bank such as facility, capacity, process and quality. The plus point of the operational strategy of the Synovus Bank is that, thoughbanking services has been undergoing rapid changes with frequent introduction of the technology-driven services and products, Synovus Bank keep pace with these technological changes and use technology in order to grow as well as satisfy and grow the demand of the customers for the products and services.

In an effort to stay current with the rapid technological changes in the banking industry; the competitors of Synovus Bank tend to have greater resources to make investment in the technological improvements,so that they would be more able to heavily invest in adopting and developing new technologies, which in turn puts Synovus Bank at the competitive disadvantage. On account of the technological changes in the industry; the Synovus Bank is recommended to utilize the artificial intelligence to deliver the service and products as it has become more efficient and competitive as compared to the traditional products and services. Synovus Bank should implement technology-driven services and products and successfully undertake the marketing of these products or services to its customers. Also, Synovus Bank is advised to invest resources in the operational initiatives and the information system enhancement, to provide functionality and to improvise the operating efficiency and streamline the experience of the customers.(Mahesh C.Gupta, 2001).The strategic investment in the talent would also allow the bank to improve the customers’ experience and support the growth in near future.(Buell, 2019).........................................

This is just a sample partical work. Please place the order on the website to get your own originally done case solution.