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Private Central American Bank

Improving profitability within a bank's SME unit


YEARS

2012

CLIENT DESCRIPTION

The client, a private bank in Central America, wanted to benchmark its SME lending department against international best practices.

CLIENT'S OBJECTIVE

Increase the market share of its SME lending department in line with best practices.

Results

BUSINESS RESULTS

Enclude’s small business banking diagnostic illustrated that the bank’s extremely conservative approach to asset quality, one of the bank’s four profit drivers, was unnecessarily reducing its profitability.

The diagnostic also demonstrated that the greatest market opportunity was serving subsegments of its current client base by offering two new loan products. The bank is currently implementing this recommendation.

SOCIAL & ENVIRONMENTAL OUTCOMES:

Once the new loan products are launched, the targeted small businesses will have access to finance previously unavailable to them.

Activities

Conducted a small business banking diagnostic that compared the bank’s practices and overall bottom line against international best practices in emerging markets.

Recommended strategic changes in the target market, loan products, credit policies and processes which, if implemented together, will lead to significantly increased profitability.

LEARNINGS

Through a five-day diagnostic of its small business banking unit, the client learned that it was missing opportunities to increase its annual revenues from the unit by 20%, mostly as a result of its own policies. The diagnostic provided fact-based guidance for the bank’s new strategy to strengthen and expand its small business banking services.