ENB Bank Analysis
As the president of ENB, I would focus on reducing the expenditure to make the bank competitive with other banks. Although the bank has been growing steadily, paying its employees highly could affect the net profit. In order to compete favorably with other banks in Enterprise City, I will review the salaries of employees downward in order to cut unnecessary expenses. Once the costs have been reduced, the bank will be able to increase its net value.
Between 2007 and 2010, the rate of asset growth for ENB increased from 7.90% to 8.04%. In the same period, the rate of asset growth for the local banks increased from 6.0% to 6.42%, with fluctuations in between, while the BHC banks recorded a decrease from 7.40% to 7.08%. However, the return on average assets of the three groups recorded the opposite growth. For instance, the return on average assets reduced from 0.84% to 0.83%. The local banks and BHC banks recorded a change from 1.02% to 1.1% and 1.05% to 1.22%, respectively. On the other hand, local banks and BHC banks spent between 2.55%-2.63% and 2.66%-2.44%, respectively. ENB has the largest expenditure, which has consequently affected its overall productivity.
Increasing working hours by ENB Bank is not justifiable. On the contrary, it increases the expenditure for the bank, since the revenue generated is lower than the money spent to pay the employees. Most of the people in Enterprise City conclude operations by Friday, which means leaves an insignificant percentage of other shoppers, which means the bank spends most of the income generated during the period to pay the employees. Although Mr. Lawrence’s expectations about the development of ENB might seem unrealistic, they will help the bank to lower its expenditure.
Works Cited
Marattin, Luigi, Tommaso Nannicini, and Francesco Porcelli. Revenue vs Expenditure Based Fiscal Consolidation: The Pass-Trough from Federal Cuts to Local Taxes. No. 644. 2019.