Branch Expansion: Moving With Confidence

Bank executives wake up each day contemplating how to best allocate their resources to enhance franchise value. The key driver of franchise value is earnings growth, and there are only two avenues toward augmenting earnings growth - profitability enhancement or franchise growth. Once a financial ins...

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Bibliographic Details
Published inHoosier Banker Vol. 91; no. 4; p. 26
Main Author Cotton, Steve
Format Trade Publication Article
LanguageEnglish
Published Indianapolis Indiana Bankers Association 01.04.2007
Subjects
Bank earnings
Banking industry
Branch banking
Business growth
Competition
Costs
Cotton
Decision trees
Decomposition
Earnings
Executives
Family income
Financial analysis
Financial institutions
Households
Market positioning
Market saturation
Market strategy
Niche marketing
Profitability
Profits
Strategic planning
United States > US
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Summary:Bank executives wake up each day contemplating how to best allocate their resources to enhance franchise value. The key driver of franchise value is earnings growth, and there are only two avenues toward augmenting earnings growth - profitability enhancement or franchise growth. Once a financial institution achieves a high profitability, its ability to grow earnings becomes almost solely predicated on its franchise growth potential. Franchise growth potential is the synthesis of the growth potential of an institution's market area, or footprint, and its strategic alignment toward the higher-velocity niches within that footprint. Given the strong influence an institution's footprint has on franchise value, it is understandable that branch expansion currently is a heavily leveraged value-enhancement tool.
ISSN:0018-473X