Bank Maanagement

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May 2004 Joseph E.Pegues

BANK MANAGEMENTBANK MANAGEMENT

STRATEGYSTRATEGY

Dakar, SenegalDakar, Senegal

Copyright Joseph

E.Pegues, May 2004


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Course Objectives

PROVIDE A COMPREHENSIVE FRAMEWORK FORMANAGING MODERN FINANCIAL INSTITUTIONS

DEMONSTRATE HOW A WELL THOUGHT OUT STRATEGICPLAN IS EFFECTIVELY LINKED TO DAY-TO-DAYOPERATIONS

DISCUSS THE PLANNING PROCESS

CORPORATE GOVERNANCE

CREDIT RISK MANAGEMENT AND LINK TO PLANNINGPROCESS


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MARKET LIBERALIZATION

GLOBALIZATION

WORLDWIDE FINANCIAL CRISES

EMERGING GLOBAL FINANCIAL SECTOR

STANDARDS

CHANGING REGULATORY ENVIRONMENT

OTHER ISSUESOTHER ISSUES


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STRATEGIC PLANNING FRAMEWORK


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WHAT IS A STRATEGIC PLAN?WHAT IS A STRATEGIC PLAN?

Serves as a framework for decisions or for securing support

Provides a basis for more detailed planning

Explains the business to others in order to inform, motivate& involve

Assist benchmarking & performance monitoring

Stimulates change and become building block for

next plan


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BASIC APPROACH:BASIC APPROACH:

Relate to the medium term i.e. 2/4 yearsRelate to the medium term i.e. 2/4 years Be undertaken by owners/directorsBe undertaken by owners/directors

Focus on matters of strategic importanceFocus on matters of strategic importance

Be separated from dayBe separated from day--toto--day workday work

Be realistic, detachedc and criticalBe realistic, detachedc and critical

Distinguish between cause and effectDistinguish between cause and effect Be reviewed periodicallyBe reviewed periodically

Be written downBe written down


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Before starting the planning process:Before starting the planning process:

Identify current status, objectives and strategies of existing

business or the latest thinking in respect to a new venture

Probe existing or perceived STRENGTHS,

WEAKNESSES, OPPORTUNITIES AND THREATS

(SWOT)


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PROCESS STRUCTUREPROCESS STRUCTURE

VISION

MISSION

OBJECTIVES

VALUES

STRATEGIESGOALS

PROGRAMS


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KEY STEPSKEY STEPS


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1.1. THE VISIONTHE VISION A written picture of the business in three or moreA written picture of the business in three or more

years time in terms of its size, client base, andyears time in terms of its size, client base, and

product offering, staffing, location, etc.product offering, staffing, location, etc.


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2.2. MISSION (statement)MISSION (statement)

Indicates the purposes of the business

1. what kind of bank to we want to be;

2. who will be our clients;

3. what is the product offering

4. How will we deliver the product

5. Where will we be located

6. Provides an indication of core values


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Mission Statements can beMission Statements can be HardHard or or SoftSoft

In reality most mission statements contain both hard

and soft elements

Core values are considered Soft

Example:

1. Expression of stakeholder concerns

2. Reason for eexistence

3. Expression of social concerns, etc.


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3.3 . OBJECTIVESOBJECTIVES

Should relate to the expectations and requirements ofall the major stakeholders, including employees, and

should reflect the underlying reasons for running the

business. These objectives could cover growth,

profitability, technology, offerings and markets.


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4.4. STRATEGIESSTRATEGIES

The rules and guidelines by which the mission,The rules and guidelines by which the mission,

objectives, etc. may be achieved.objectives, etc. may be achieved.

Can be focused on the business as a whole, orCan be focused on the business as a whole, or

functional areas.functional areas.

Example:

1. Restructure bank to focus on consumer business in

urban areas; reduce level of government ownership;

modernize operational systems; recruit staff with

consumer lending expertise; expand number of

branches in affluent communities, etc.


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5 . GOALS

These are specific interim or ultimate time-

based measurements to be achieved by

implementing strategies in pursuit of the banksobjectives.

Should be quantifiable, consistent, realistic and

achievable

They can relate to factors like market size and

share, products, profitability, etc.


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6. PROGRAMS/ACTION PLANS

Road maps for implenting key strategies

Must be inter-linked and consistent with each other


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Strategic Bank ManagementStrategic Bank Management

Documents

Bank Maanagement