The strategy to reduce non-performing loans (NPL) and enhance bank performance focuses on improving various banking operations over a three-year period. The main goal is to decrease NPL from 35% to 10%, grow deposits, enlarge the bank's loan portfolio, and optimize fixed asset management. One approach is to enhance risk management and credit analysis. This involves revising the credit risk framework and utilizing advanced analytics to predict credit behavior, allowing banks to manage risk proactively. For example, conducting regular training for credit officers ensures they can appraise risks accurately.
Another component of the strategy involves boosting customer deposits. This could be achieved by introducing innovative deposit products with fintech collaborations and offering competitive interest rates. For instance, launching digital savings accounts allows customers to make transactions effortlessly, increasing user engagement. Furthermore, community events and personalized marketing campaigns can attract new clients and build trust, fostering a culture of savings.
Lastly, expanding the loan portfolio and managing fixed assets are essential. This involves diversifying loan products to reach various segments and investing in technology for efficient asset management. By identifying high-yield opportunities through data analytics and creating strategic partnerships, banks can cross-sell products, thereby enhancing revenue. For example, regularly auditing fixed assets ensures optimal performance and alignment with business goals, ultimately leading to better capital allocation.
The strategies
⛳️ Strategy 1: Enhance risk management and credit analysis
- Review and update the credit risk management framework
- Implement rigorous borrower assessment processes
- Use advanced data analytics for predictive credit analysis
- Conduct regular training for credit officers on risk appraisal
- Strengthen early warning systems to identify potential defaults
- Introduce loan restructuring options to at-risk clients
- Increase provisioning for bad debts to cover potential losses
- Perform stress testing on loan portfolios quarterly
- Collaborate with credit rating agencies for consistent evaluations
- Regularly review and adjust credit policy as market conditions change
⛳️ Strategy 2: Boost customer deposits
- Launch targeted marketing campaigns for deposit products
- Offer competitive interest rates on fixed-term deposits
- Introduce digital savings accounts for seamless transactions
- Collaborate with fintechs to create innovative savings solutions
- Develop a loyalty program for long-term depositors
- Organise financial literacy workshops to promote saving culture
- Incentivise bankers for achieving deposit growth targets
- Enhance online and mobile banking features for customer convenience
- Segment clients for personalised deposit product offerings
- Engage in community events to build brand trust and attract deposits
⛳️ Strategy 3: Expand loan portfolio and manage fixed assets
- Diversify loan products to cater to different market segments
- Identify and enter new markets with untapped potential
- Enhance customer relationship management for cross-selling opportunities
- Set clear growth targets and monitor progress monthly
- Develop strategic partnerships to increase loan origination
- Use data analytics to identify high-yield asset opportunities
- Regularly audit fixed assets for performance and valuation
- Invest in technology to improve asset tracking and management
- Align asset management strategies with business goals
- Reduce non-core assets to improve capital allocation
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
