Profitability Management in Banks
(20.12.19 to 21.12.19)
Despite the ongoing slowdown, Indian economy has robust potential to grow. In this context, banks have a major role in providing the required amount of financial resources for such a growth and banking industry therefore is rightly meant to work as engine of growth of real economy. But in order to sustain the growth momentum, banks would have to continue to provide funding on a large scale to the ever growing needs of the different sectors of the economy. This requires the banking industry to be profitable & continue to be on sound footing, because low profitability weakens the ability and willingness of banks to finance the wider economy, which may in turn, weaken the overall growth prospects. It will further put downward pressures on both profitability and the growth of bank assets.
During the last few years, banks have witnessed & continue to experience erosion in their interest income on account of weak incremental rise in business, low interest rates, surplus liquidity, increasing level of NPAs, enhanced regulatory requirements, competitive pressures from peer banks, new banks such as SFBs, payment banks and NBFCs etc. All these factors contribute to create pressure on profitability. Way forward, the pressure on net interest margin (NIM) will go up due to competition from differentiated pricing strategies of banks which can offer better interest rates on demand deposits.
In order for established existing banks to compete with new entrants, the methods of profitability management will have to undergo seminal changes. It calls for process reforms using technology and innovation in aligning costs and pricing to improve operational efficiency. The uses of CRM has to be fine tuned to offer "Best Fit" services as a part of bank's strategy to step up profitability. The new challenges posed by changing customer aspirations need re-engineering organisational structure to maintain optimum operational efficiency, hence profitability remains at the centre stage of business strategy. This programme has been designed to discuss & deliberate on the prevailing macro & micro economic conditions, banking developments & challenges impacting profitability of banks and is also aimed at stimulating thought processes amongst participants on the nuances of better management of profitability.
Programme Contents :
Recent developments in economy & banking & impact on bank’s profitability
Cross sectional analysis of profitability trends in different bank groups
Enhancing profitability of banks - challenges, strategies & action plans
Participant’s active involvement thru case study, group discussions and presentation