Chief Retail Officer, Chief Financial Officer, and Business Plan Functional Lecture Mike Allen

Executive Banking School Objectives Retail Strategy Customer acquisition Branding & marketing Product & pricing Delivery optimization Bank Management Strategy Economic value & risk Capital considerations Analyst influences 360° executive management Financial Strategy Financial analysis Key performance drivers Earnings power Risk considerations 2

MarketSim Objectives 3

Functional Lecture Objectives  To focus on areas of responsibility  To review decision responsibilities  To review the tool kit of worksheets  To discuss common issues  To answer common questions 4

The Role Chief Retail Officer  Sets policy, provides direction  Coordinates the efforts of the group, and interacts with senior management and regulatory authorities  Manages the decision-making process and balances the work load of team members  Ensures assignments and decisions are submitted on time. 5

The Role Chief Financial Officer  Develops plans and forecasts for the retail area as a whole  Evaluates cost data on retail activities  Works with other officers to coordinate balanced scorecard and financial results  Prepares other financial analyses as directed by the bank’s Chief Retail Officer. Reminder: Many expectations that you may have for ratios like Efficiency Ratio are quite different when only exploring the Retail Division versus the entire bank. Using the Efficiency Ratio example, a reasonable goal for an entire bank may be 50%. That ratio may be unattainable in a retail division with its heavy reliance on fixed assets and FTE. 6

MarketSim Process 7 AnalyzePlanForecastExecuteReview Retail Bank MarketSim Process Flow

Analysis 8

Balanced Scorecard Index 9

Competitive Report 10

Current Decisions 11

CRA Report 12

Balance Sheet 13

Income Statement 14

Call Report I 15

Call Report II 16

ROE Decomposition and Key Ratios 17

Planning & Forecasting 18

CRA Reporting Status 19

Management Direction Consensus 20

MarketSim Business Plan I 21

MarketSim Business Plan II 22

MarketSim Business Plan III 23

MarketSim Business Plan IV 24

MarketSim Business Plan V 25

MarketSim Business Plan VI 26

MarketSim Business Plan VII 27

MarketSim Strategic Planning I 28

MarketSim Strategic Planning II 29

MarketSim Strategic Plan III 30

Retail Bank Condition Consensus 31

Risk Assessment of Direction 32

BSI Analysis 33

Planning & Forecasting 34

Finance Report Forecast I 35

Finance Report Forecast II 36

LLP Forecast Analysis I 37

LLP Forecast Analysis II 38

NIM Forecast Analysis 39

Product NII & Expense Forecast 40

Product NII & Expense Worksheet II 41

Product NII & Expense Worksheet III 42

Execute On Task On Time On Strategy On Budget 43

Review Results 44

Best Practices Be inclusive Develop consensus Strategy first, detail second Fast and proximate versus to the penny and late 45

Today’s Assignment Build the Business Plan! 46

Review Course Objectives  To focus on areas of responsibility  To review decision responsibilities  To review the tool kit of worksheets  To discuss common issues  To answer common questions 47

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