Banking Report Essay
Name: Nguyen Tran
Our primary goal obviously is to maximize shareholder’s wealth or in this case, to maximize our bank’s stock price. In addition, we also aim to compete with other business banks from all three cities (New York, Denver, Seattle) in terms of efficiency and profitability. We are looking at no less than the best business bank all around and we will give our best to achieve it.
Quarter 0 As a business bank, our strategy is commercial-oriented which means we focus more on accepting deposits from and issuing loans to businesses/organizations rather than individuals. However, after looking at the balance sheet, we notice that Securities and Commercial loans are significantly higher than …show more content…
In order to help boost Net Income for this second quarter, we decide to lower some of the expenses, such as Salaries from $3.68 mil to $3.5 mil, Advertising Deposit and Advertising Loan each from $0.61 mil to $0.5 mil. In addition, we try to apply a non-dividend payout policy which brings dividend rate down to $0/share as we think more retained profit would contribute to our business growth and eventually increase the stock price. Our securities actually dropped by $65 mil from last quarter and that is exactly the amount of 3-Month T-Bills which will be maturing next quarter. Therefore, we would like to buy $75 mil worth of 3-Month T-Bills for the next quarter, just to make sure that we use our capital efficiently instead of having money laying around without doing anything. We also lower our Commercial loans rate from 6.01% to 5.8% to make more loans to the commercial market segment, which we should have done in the last quarter, and hope to achieve a slight increase in our stock price in the third quarter.
Once again, the stock price remains unchanged and Net Income only shows an increase of