Friend Bank: The Time for Hope Case Solution
Introduction:
Slocomb National (now Friend Bank) was established in 1905. Friend Bank acquired many banks which, added offices in Hartford and Newton. Harris Johnson, father of Lawrence Harris, served as bank President from 1972 until his death in 1991.
After a year, Hope returned to Slocomb to begin an apprenticeship at Friend Bank. Under her father's guidance, she worked in each area of the bank and started to develop an understanding of each area in the bank operations. In 1996, she became president and in 2010, she wanted to expand their business with a 20-year growth plan. She decided to open a second office and execution of the plan was going well. Initially, the returns were quite good, but that financial crisis in 2008, affected the bank’s financial performance.
The Slocomb national bank was providing private banking and was known for giving out $150 loan to small entrepreneurs. The bank was trying to attract clients by providing the best opportunity to small businesses, non-profit organization, retires, and pre-retirees so that they are able to create value proposition. The bank is providing loan to that borrower who is the creditworthy borrower. In other words, one who has the good ability to pay the loan. Along with that, Friend Bank is providing higher rates on deposit and charge lower fees than the competitors, so that they can attract their customers.
The bank is successful in delivering its value proposition to client. The value proposition of the bank directly depends on the skill of employees. The bank provides training to the employees, opportunity for advancement, and reorganizes annual employee awards, which increase the skills of employees and create the value proposition to the client.
Friend Bank as (community bank)
Friend Bank was a community bank. Community bank generally means that any bank who has assets that amount to less than 1 billion. Community banks have only 23% of the assets in the US. These banks play a unique role in serving the communities. Almost 90% of the community banks were privately held, 50% owned and capitalized by the individual. The small size of the community bank has some competitive advantages as well as some disadvantages.
Advantages of community bank
Interest rate:
A community bank is offers low-interest rate than other commercial banks.
More attention for small business:
These banks give more attention to the local families, small business, and farmers.
Better customer services:
The managers of the bank are bound to know whether you are a part of the small community of customers, there are chances that you will get more attention, and get the best facility to meet your needs........................
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