...ACTIVITY-BASED COSTING IN THE SERVICE SECTOR - NAM DUONG BANK Nam Duong Bank began operations in the mid-1990s. The bank quickly grew by providing checking account services to many small businesses that preferred to do business with a "local" bank. Although Nam Duong initially offered checking account services for individual accounts (retail customers), the bank primarily focused on serving its business customers. During the Asian financial crisis after the mid-1990s that weakened the Vietnamese economy, growth in business customer accounts began to decline. In response, Nam Duong's senior management adopted a new strategy, focusing on increasing the number of retail customer accounts. By aggressively marketing individual retail accounts, Nam Duong continued to grow. Today, Nam Duong Bank strives to maintain a stable base of business customers, while actively competing for an increased market share of retail customers. Recent income statements (Exhibit A) reveal a decline in the bank's profits. The bank's primary (noninterest) expense consists of salaries and employee benefits. Most full-time employees' first priority is providing services to customers; these employees conduct their administrative responsibilities during slack times. The Bank schedules additional part-time employees to work during peak demand times, from 11 am - 2 pm and Friday afternoons. Flexibility in scheduling part-time employees means that the bank's staff is lean and fully utilized. Nam Duong's CEO...
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...READ THIS ARTICLE BEFORE READING THE BNB CASE UNEQUAL TREATMENT ALIENATING CUSTOMERS ISN’T ALWAYS A BAD IDEA, MANY FIRMS DISCOVER Banks, Others Base Service On Whether an Account Is Profitable or a Drain ‘Redlining in the Worst Form’ By Rick Brooks Staff Reporter of The Wall Street Journal CHARLOTTE, N.C.–Fielding phone calls at First Union Corp.’s huge customer service center here, Amy Hathcock is surrounded by reminders to deliver the personal touch. Televisions hang from the ceiling so she can glance at the Weather Channel to see if her latest caller just came in from the rain; a bumper sticker in her cubicle encourages, “Practice random kindness & senseless acts of beauty.” But when it comes to answering yes or no to a customer who wants a lower credit card interest rate or to escape the bank’s $28 bounced-check fee, there is nothing random about it. The service all depends on the color of a tiny square—green, yellow or red—that pops up on Ms. Hathcock’s computer screen next to the customer’s name. For customers who get a red pop-up, Ms. Hathcock rarely budges; these are the ones whose accounts lose money for the bank. Green means the customers generate hefty profits for First Union and should be granted waivers. Yellow is for in-between customers: There’s a chance to negotiate. The bank’s computer system, called “Einstein,” takes just 15 seconds to pull up the ranking on a customer, using a formula that First Union declines to detail of minimum balances...
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...our internship program. Here are my internship report’s topics that I have submitted to you. Consequently, I am transmitting these topics of the report to your very concern. Hopefully, you will assign me one of the topics so that I can start preparing the report. In case of any further clarification or elaboration regarding these topics I would welcome the opportunity to consult with you. Sincerely yours, ____________ Md. Tanvir Hasan ID: 15-088 Department of Banking & Insurance University of Dhaka Selected Topics for Internship Report: Topic 1: Foreign Exchange Mechanism of Mercantile Bank limited. Objective of the Report General Objective The main objectives of the study to gain practical exposures about “Foreign Exchange Mechanism: a comprehensive Study of Mercantile bank Ltd. Specific Objectives The specific focuses of the study are: * To know the regulation and deregulation regarding Foreign Exchange in Bangladesh. * To analyze the export and Import procedure...
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...Belltown National Bank[1] To increase its share of the checking account market, Belltown National Bank in Seattle took two actions: (1) established a customer call center to respond to customer inquiries about account balances, checks cleared, fees charged, etc., and (2) paid year-end bonuses to branch managers who met their branch’s target increase in the number of customers. While 80% of the branch managers met the target increase in the number of customers, Belltown National’s profits continued to decline. Roger Welton, the CEO, didn’t understand why profits were declining, even though the bank was serving more customers. The Pierce County branch manager, Rose Martinez, noticed that while small retail customers flocked to the bank, the number of business customers was declining. Belltown National’s existing costing system, developed back in 1990, is straightforward. No costs are traced directly to customers. The bank assigns the total indirect costs to customer lines (retail customer line or business customer line) by dividing the total indirect costs by the total number of checks processed to compute a cost per check processed. The cost by customer line is then the number of checks processed for the customer line multiplied by the cost per check. Martinez suspected that Belltown National’s cost system might be part of the problem. Martinez learned about activity-based costing (ABC) in school, but the applications she studied involved manufacturing firms. ...
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...Buckeye National Bank 1. a) PDOR- Est. MOH/Est. Act. (Total indirect costs/total value of checks processed) $2,850,000/$95,000,000= $0.03 per dollar processed. b) (i) Retail Line—(Value of checks processed X cost per dollar processed) $9,500,000 X $0.03= $285,000 (ii) Business Line $85,500,000 X $0.03= $2,565,000 The allocations are driven by the dollar value of the checks processed. c) (i) Total indirect cost proportion for Retail Line (Allocation amount/Est. MOH) $285,000/$2,850,000= 10% (ii) Total indirect cost proportion for Business line $2,565,000/$2,850,000= 90% The original system assumed that indirect costs are incurred in direct proportion to the dollar value of the checks processed. This allocation is approximately accurate only if the indirect costs in Exhibit B are incurred in direct proportion to the dollar value of the checks each customer line writes. d) (i) Annual indirect cost per Retail account. (Allocated indirect costs/number of accounts) $285,000/150,000= $1.90 per account (ii) Annual indirect cost per Business account $2,565,000/50,000= $51.30 per account e) (i) Contribution to profit per Retail account (Revenue per account minus cost per account) $10.00 - $1.90= $8.10 (ii) Contribution to profit per Business account $40.00 - $51.30= ($11.30) This suggests Buckeye National Bank should pursue a strategy that increases the retail-customer base because the original cost system shows retail customers are profitable, but business customers...
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...MAJOR PROJECT ON CUSTOMER PREFRENCES WITH REGARD TO THE RETAIL BANKING SCHEMES This Dissertation report is being submitted as a part of the requirements of the MBA (FINANCE) Program of Punjab Technical University ,Jalandhar. SUBMITTED TO: PROJECT GUIDE: SUBMITTED BY: Kamna Pathak MBA (FINANCE) 2 YR. ROLL NO. ……………. RIMT – IMCT Mandigobindgarh ACKNOWLEDGEMENT This study was made possible with the consultations, support and kind opinions from several people. So with immense gratitude, I acknowledge all those, whose guidance and valuable inputs have helped in the materialization of this project. No words are enough to thank Assistant Manager Mr. Rahul Kapoor of State Bank of Patiala, who not only inspired me to work on this project but also accepted to guide me a lot. In spite of heavy responsibilities and busy schedules, he always managed time to provide proper guidance. Clearly I owe a special in-depth of gratitude to my friends who created a motivating environment to work on this project and also helped me in understanding and reviewing major concept from various point of views. Finally I would like to be grateful to all those who directly or indirectly have been of great help and obliged me with their support and have helped me in converting my collection of data and information into a finely polished project. DECLARATION I Kamna Pathak of MBA(Finance) 2nd year, studying at RIMT-IMCT Mandigobindgarh...
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...Marketing Information Systems Marketing information systems have been defined as “people, procedures, and a software system used to collect, analyze, and assess market information so that decision makers can use it.”(Armstrong et al., 2009, p.184). Marketing information systems (MIS) are a set of unique marketing tools that assists corporations around the world to utilize information gained from marketing research to assess their products and formulate their plans for the future. Models of consumer behaviour can influence the development of their products and services , as well as impacting decisions such as; the appropriate locations for their businesses, and development of their marketing strategies. Once companies collect the information regarding consumer behaviours and their purchasing habits, it is analyzed in order to draw conclusions and make informed business choices. The objective is to utilize this information in order to generate the largest possible revenues (Buyer to consumer). Information is gathered through interviews, customer comment forms , consumer inquires and spending patterns gathered through loyalty cards. The information is gathered and the analysis provides insight into products and services being purchased by different demographic groups (i.e., age, gender, ethnicity, etc.), and in different locations. After this is achieved, organizations can then target their marketing and advertising of the right product to the appropriate customer...
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...Retail Banking - Opportunities and Challenges Shyamala Gopinath* The issue of retail banking is extremely important and topical. Across the globe, retail lending has been a spectacular innovation in the commercial banking sector in recent years. The growth of retail lending, especially, in emerging economies, is attributable to the rapid advances in information technology, the evolving macroeconomic environment, financial market reform, and several micro-level demand and supply side factors. India too experienced a surge in retail banking. There are various pointers towards this. Retail loan is estimated to have accounted for nearly one-fifth of all bank credit. Housing sector is experiencing a boom in its credit. The retail loan market has decisively got transformed from a sellers’ market to a buyers’ market. Gone are the days where getting a retail loan was somewhat cumbersome. All these emphasise the momentum that retail banking is experiencing in the Indian economy in recent years. What is Retail Banking? Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit...
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...Performance Evaluation of BRAe Bank Limited Internship Report On Performance Evaluation of BRAe Bank Limited Prepared for: Dr. Tanbir Ahmed Chowdhury Professor Department of Business Administration East West University Prepared by: Rezwana Sharmin Id # 2007-1-10-114 Department of Business Administration Date of Submission: 25 April, 2011 25 April, 2011 Mr. Dr. Tanbir Ahmed Chowdhury Professor Department of Business Administration, East West University. Subject: Submission of Internship Report Dear Sir, With due respect I would like to inform you that I have completed my internship program in BRAC Bank Limited, Head Office, Gulshan-l, Dhaka - 1212, and prepared my internship report titled "Performance Evaluation of BRAe Bank Limited". I am placing my internship report to you as a requirement of the BBA Program The internship program and writing this report has been a great pleasure and an extremely interesting and rewarding experience. It has enabled me to get an insight into the practical arena of Banking. Sincerely yours, Rezwana Sharmin Id # 2007-1-10-114 Acknowledgement The successful accomplishment of this Internship Report is the outcome of the contribution and involvement of a number of people, especially those who took the time to share their thoughtful guidance and suggestions to improve the report. First of all I am grateful to Almighty Allah. Then I would like to express my gratitude to my Internal Internship Supervisor Mr. Dr. Tanbir Ahmed Chowdhury, Professor...
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...5-7 The Buckeye National Bank (Activity-Based Costing in the Service Sector) ABSTRACT: The U.S. Bureau of the Census projects that by 2006, the service sector will employ 74 percent of the workforce. This case illustrates why a major segment of the service sector—banks—needs accurate cost information to make strategic decisions, and how more refined accounting systems help fulfill this need. Buckeye National Bank is a hypothetical bank that has suffered falling profits despite a shift in customer base toward retail customers, which the current information system reports are more profitable than business customers. Following a step-by-step approach, you will develop the Bank’s average cost of serving a retail customer account and a business customer account, under (1) the Bank’s traditional single allocation base system, and (2) a (pilot test) activity-based costing system. You will analyze these results to determine how and why costs reported by the activity-based system differ from the costs reported by the traditional system, and what this difference means for the Bank’s business strategy. Finally, you will consider how the Bank’s managers can use the new, more refined activity-based cost data in strategic decision making, including controlling costs and developing more profitable business strategies. TEACHING NOTES Background and Purpose Textbook illustrations and pedagogical cases on activity-based costing (ABC) typically focus on manufacturing applications...
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...Michael (00000011339) CLASS: M6 DATE OF SUBMISSION : 26 March 2015 Bank Mandiri was formed on 2 October 1998, as a part of the Government of Indonesia’s bank restructuring program. In July 1999, four state-owned banks-Bank Bumi Daya, Bank Dagang Negara, Bank Exim and Bapindo-were amalgamated into Bank Mandiri. The history of these four banks can be traced back over 150 years, and together they encapsulate the development of the Indonesian banking sector. Today, Bank Mandiri continues this tradition of more than 150 years of delivering outstanding banking and financial services that was developed by the four legacy banks, all of which played an integral role in the development of the Indonesian economy over many generations. Bank Mandiri is currently at an advanced stage of the implementation of its 2010-2014 transformation program as part of which the Bank is working toward revitalizing its vision “To be the most admired and progressive Financial Institution in Indonesia”. To achieve this vision, the focus of Bank Mandiri’s business transformation in 2010 will focus on 3 (three) business areas, namely: Wholesale transactions, Retail deposits & payments, and Retail financing. These three focus areas are supported by the strengthened organization and the infrastructure improvements (branches, IT, operations, risk management) so as to provide integrated service solutions. In addition, the Bank is also supported by skilled human resources, constantly updated technology...
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...SunTrust Banks, Inc. SunTrust Banks, Inc., with year-end 2008 assets of $189.1 billion, is one of the nation’s largest and strongest financial services holding companies. Through its flagship subsidiary, SunTrust Bank, the Company provides deposit, credit, and trust and investment services to a broad range of retail, business, and institutional clients. Other subsidiaries provide mortgage banking, insurance, brokerage, investment management, equipment leasing, and capital market services. SunTrust enjoys leading market positions in some of the most attractive markets in the United States and also serves clients in selected markets nationally. The Company’s mission is to help people and institutions prosper by providing financial services that meet the needs, exceed the expectations, and enhance the lives of colleagues, clients, communities, and ultimately shareholders. SunTrust’s 1,692 retail branches and 2,582 ATMs are located primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and the District of Columbia. In addition, SunTrust provides clients with a full selection of technology-based banking channels including online, 24-hour customer services centers and the latest mobile devices. As of December 31, 2008, SunTrust had total assets under advisement of $192.0 billion. Total loans serviced by SunTrust Mortgage reached $162.0 billion by year-end. (Annual Report, 2008) In order to maintain and grow households, SunTrust...
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...EXECUTIVE SUMMARY By analyzing PEST model partly which contains four main factor as Economic; Political and Legal; Culture, Social and Ethics and some others (technology or environment), this paper has clearly presented penetration strategy Tesco PLC, a multinational retailer in grocery and merchandise towards Vietnam market. The paper conducted the report through collecting secondary data from General Statistics Office of Vietnam, Work Bank Data Source, CIA and some other trusted data source to indicate in detail whether Vietnamese market is a possible one for Tesco. The result point out that Vietnam could be a possible market for the core strategy of Tesco PLC. 1. INTRODUCTION Retail section has becoming one of the most potential businesses in the booming industry recently. Along with an active market, a level of competitiveness among retailers is also considered as a core factor influences each typical business strategy with the aim at obtaining big goal of profit. Numerous big retailer Groups in the world, now is trying to expand their business towards prospective market but not only domestic one such as Wal-mart or Metroto be able to perform, develop and compete through having effective plan and well performing. This report would like to examine Tesco PLC, the biggest retailer from the United Kingdom as a representative case for the effective expansion strategy implementation basing on analysing some key factors of host country’s market in a macro level. The chosen...
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...Internship Report on “An Analysis of Financial Performance of BRAC Bank Ltd” Supervised By: Sk. Habibur Rahaman Senior Lecturer Manarat International University Prepared by: Al Sukran ID-1413MBA50346 Manarat International University Department of Business Administration Manarat International University Date of Submission: January 30, 2015 Internship Report on “An Analysis of Financial Performance of BRAC Bank Ltd” Supervised By: Sk. Habibur Rahaman Senior Lecturer Manarat International University Signature of Supervisor Prepared by: Al Sukran ID-1413MBA50346 Manarat International University Department of Business Administration Manarat International University Date of Submission: January 30, 2015 LETTER OF TRANSMITTAL January 30, 2015 To Sk. Habibur Rahaman Senior Lecturer Department of Business Administration Manarat International University Subject: Submission of Internship Report on “An Analysis of Financial Performance of BRAC Bank Ltd” Dear Sir, With due respect to state that I am AL SUKRAN, ID-1413MBA50346 is a student of Masters of Business Administration of Manarat International University. I am delighting to submit here with a copy of internship report for your kind evaluation and appreciation. I have given my best effort to prepare the report with relevant information that I have collected from BRAC BANK LTD and from other sources during my internship program. I...
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...Information Systems supporting Business Processes Unit Code: CIS 13 Assignment 1 – Part B Executive Summary The ANZ Bank has an organisational structure which is divided into geographic location. The focus of this report is on the Australian Division and The Retail Distribution Functional Area. All functional areas within any business are support by a number of business processes. One business process which supports ANZ’s Retail Distribution functional area is Retail Lending. This particular business process plays a big part in creating revenue and ensuring that any risks in lending are kept to a minimum. Management and sales staff within Retail Lending use two types of Information Systems (IS), Hogan and Seibel Customer Relationship Management (CRM). It is these IS which allow ANZ to create their revenue and ensure the appropriate risk assessment is being use. Information Systems are used in all types on businesses globally; they add value to the organisation and also to the customers. Table of Contents Executive Summary 2 1. Introduction 4 2. Retail Distribution – Functional Area 4 2.1. Business Process 4 3. Customer Information System – CSC HOGAN Systems 5 3.1. Supporting Business Process 5 3.2. Value Add 5 3.3. Inputs, Outputs and Feedback 5 3.4. Requirements 5 4. Customer Relationship Management System - SEIBEL 5 4...
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