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Where are we now?(Sample Presentation)
Rural Bank of XYZStrategic Planning-Workshop
Financial and Operational Analysis
Financial Performance(Last 3 Years)
Year 1 Year 2 Year 3
Total Assets 79,109,796 104,197,077
103,979,762
Annual Growth Rate 19% 32% -0.2%
3-Year Average 16.9%
Total Loan Portfolio (Gross) 68,579,492 89,408,314
75,831,355
Annual Growth Rate 23% 30% -15%
3-Year Average 13%
As % of Total Assets 87% 86% 73%
Financial Performance(Last 3 Years)
Breakdown of Gross Loan Portfolio
Current 58,086,487 80,780,947 62,984,424
Past Due 9,556,797 8,114,487 12,461,699
LIL 936,208 512,880 385,232
As % of Gross Loan Portfolio
Current Loans 85% 90% 83%
Past Due 14% 9% 16%
LIL 1% 1% 1%
Past Due Ratio 15% 10% 17%
Total Deposits Year 1 Year 2 Year 3
Active Savings (Ordinary)
29,444,182
39,503,989
37,942,840
Special Savings (Time Deposit-Passbook
based)
25,369,764
29,317,426
38,399,151
Time Deposit
2,128,923
3,205,982 387,677
Special Savings + Time Deposits 31,573,105
42,709,971
38,330,517
Total Deposits 61,017,287
82,213,960
76,273,357
Annual Growth Rate 19% 35% -7%
3-Year Average 15%
Financial Performance(Last 3 Years)
Financial Performance(Last 3 Years)
Deposit Mix (High cost vs. Low cost)
Active Savings 48% 48% 50%
Special Savings + Time Deposits 52% 52% 50%
Deposit to Loan Ratio 89% 92% 101%
Financial Performance(Last 3 Years)
Total Borrowings Year 1 Year 2 Year 3
Local Banks
6,256,750
9,644,400
4,110,891
Others
1,500,000
7,953,169
8,406,775
7,756,750
17,597,569
12,517,666
Annual Growth Rate 166% 127% -29%
3-Year Average 88%
Financial Performance(Last 3 Years)
Year 1 Year 2 Year 3
Total Liabilities
67,314,750
91,424,448
90,838,470
Annual Growth Rate 20% 36% -1%
Liability Structure (% Share)
Deposits 47% 47% 42%
Borrowings 12% 19% 14%
Financial Performance(Last 3 Years)
Year 1 Year 2 Year 3
Total Net Worth (Equity)
11,795,046
12,772,628
13,141,292
Annual Growth Rate 16% 8% 3%
3-Year Average 9%
Year 1 Year 2 Year 3
Total Operating Income
11,265,236
16,337,445
19,269,808
Total Operating Expenses
9,646,067
14,550,407
18,561,947
Net Operating Income
1,619,169
1,787,038
707,861
Growth in Total Income 30% 45% 18%
Growth in Net Income 241% 10% -60%
Financial Performance(Last 3 Years)
Financial Performance(Last 3 Years)
Expense & Net Income as % of Total Income Year 1 Year 2 Year 3
Total Expense 86% 89% 96%
Net Income 14% 11% 4%
Financial Performance(Last 3 Years, in % of Total Expense)
Expense Item Analysis Year 1 Year 2 Year 3
Interest on Deposits 42% 41% 35%
Interest on Borrowed Funds 4% 12% 10%
Others (Banking Fees) 0.3% 0.3% 0.2%
Finance Charges 0.0% 0.1% 0.2%
Compensation/Fringe Benefits 33% 31% 31%
Mgmt & Other Prof Fees 33% 31% 31%
Fines, Penalties & Other Fees 0.1% 0.0% 0.1%
Taxes & Licenses 2% 2% 2%
Insurance 2% 1% 1%
Depreciation/Amortization 3% 4% 7%
Litigation/Acquired Assets
Other Expenses 16% 18% 16%
Provisions 0% 2% 5%
Selected Ratios
Return on Assets (ROA) Year 1 Year 2 Year 3
2% 2% 0.68%
Net Income-Taxes
1,619,169
1,787,038 707,861
Avg. Assets
72,726,019
91,653,436
104,088,419
Return on Equity (ROE) 15% 15% 5%
Net Income-Taxes
1,619,169
1,787,038 707,861
Avg. Equity
10,989,511
12,283,837
12,956,960
Selected Ratios
Year 1 Year 2 Year 3
Portfolio Yield18% 21% 23%
Total Operating Income
11,265,236
16,337,445
19,269,808
Avg. Gross Portfolio
62,262,467
78,993,903
82,619,834
Debt to Equity 5.71 7.16 6.91
Liabilities
67,314,750
91,424,448
90,838,470
Equity
11,795,046
12,772,628
13,141,292
Selected Ratios
Year 1 Year 2 Year 3
Financial Expense Ratio (Blended Cost) 19% 12% 12%
Interest Expenses on Deposits and Borrowed Funds 4,047,000
5,955,176
6,401,648
Avg. Deposit + Avg. Borrowings 21,125,620
49,818,697
55,577,862
Financial Expense Ratio-Deposits 23.1% 11.3% 11.2%
Interest Expenses on Deposits 3,649,759 4,193,758 4,555,054
Avg. Deposit 15,786,552 37,141,538 40,520,244
Financial Expense Ratio-Borrowings 7% 14% 12%
Interest Expense on Borrowed Funds 397,240 1,761,418 1,846,594
Avg. Borrowings 5,339,068 12,677,159 15,057,618
Selected Ratios
Operating Expense Ratio to Avg. Gross Portfolio 8% 9% 12%
Operating Expense
5,201,827
6,790,591
10,279,818
Avg. Gross Portfolio
62,262,467
78,993,903
82,619,834
Operating Expense as % of Total Operating Income 86% 89% 96%
Operating Income as % of Total Operating Income 14% 11% 4%
Selected Ratios
Selected Ratios
Loan Product Analysis
Selected RatiosLoan Portfolio Quality
Results of Other Assessment
• Focus Group Discussion Results
• Customer Satisfaction survey
• Client Exit survey
• Competitors analysis
Growth Drivers
• Additional Branches are source of increase business opportunities (loans and deposits)
• Microfinance is the major source of growth in portfolio, active clients and revenue
Strategic Issues and Concerns(Areas for Improvement)
Financial Performance• ROA is below standard of 2% or
higher• ROE is below industry standard• Past Due Ratio is consistently a
double-digit level• Portfolio-At-Risk Ratio does not
meet accepted standards• Deposit mix leans toward the
more expensive source which is time deposit
• Income and expense ratio is very lopsided at 10% - 90% of total gross income
• No business planning template
Market Focus• Low portfolio outstanding and
number of clients per account officer
• 2-year holding period (non-withdrawal) of contractual savings in MF loans
• Clients complain of going to the bank to pay loan; want pick-up like what other providers do
• Bank do not offer incentives to long-time clients
• Bank does not offer a current/checking account
• Some loan product procedures are cumbersome to the clients
Strategic Issues and Concerns(Areas for Improvement)
Business Processes/ Operations
• No standardized manuals of operations
People/ Structure
• Inadequate training of staff especially on credit evaluation, loan appraisal and sales skills
• Inadequate computers to prepare credit evaluation report