Let me tell you a story…
…About how I came to focus on #depositprofitability
A longtime client (large and sophisticated) was acquiring a bank.
The target bank (small and rural) had a branch network in a new market area.
My client was in the midst of a multiyear deposit rewards program.
They thought they had a great handle on their deposit costs.
Imagine their surprise when they realized their net deposit costs were MUCH higher than the small country bank they purchased.
They were in a quandary.
Cutting deposit costs risked running off the deposit base.
Raising rates at the acquired bank would significantly dilute the #bankprofit they hoped to achieve.
I built #depositanalytics to answer their questions about deposit profits.
When I reviewed results with the CFO, CBO and CIO the answers leapt off the page.
Immediately my client realized exactly where they could cut without putting their deposit base at risk.
They saw their biggest, most obvious opportunities to build noninterest income and profits.
All because they decided to look deeper at the actual instrument level, transaction detail profitability for each and every deposit account and relationship.
We’ll look at how to do this in my next post.
Have you ever wondered if your deposit profits were up to snuff?