Opening a New Bank Branch Office

Opening a New Bank Branch Office

This paper provides the best scenario for New Bank, a bank that enjoys a formidable position in the American banking industry. This bank is now planning to open its new branch office in a locality in Southern part of New York. This paper is divided into two sections. Section 'A' presents the business plan, while Section 'B' comprises of a letter to the General Manager of New Bank, supporting the idea of opening the said branch in South New York locality.

Objectives

The New Bank has the following objectives:

To obtain required operational certifications on or before month eight.

To commence banking service on or before the end of year one.

To raise sufficient "seed" and "bridge" capital in a timely fashion to financially enable these objectives.

To commence operations with the new branch in month one, four by end of month four, and six by end of month six of bank operations.

To add one banking service per month during year two for a total of 18 at year two end (blogs.usatoday.com).

Mission

The New Bank, Inc. has a mission to provide safe, efficient, low-cost consumer banking service. Our service will emphasize safety as its highest priority. We will operate the newest and best maintained banking premises available. We will never skimp on maintenance in any fashion whatsoever. We will strive to give value-added banking services on time (www.banks.org).



Keys to Success

The keys to success are:

Obtaining the required governmental approvals.

Securing financing.

Experienced management. (Already in place).

Marketing; either dealing with channel problems and barriers to entry; or solving problems with major advertising and promotion budgets. Targeted market share must be achieved even amidst expected competition.

Service quality. Always with safety foremost.

Services delivered on time, costs controlled, marketing budgets managed. There is a temptation to fix on growth at the expense of profits. Also, rapid growth will be curtailed in order to keep maintenance standards both strict and measurable.

Cost control. The over-all cost per service is pegged at 7.0 cents or less in 1996 dollars (www.wired.com).

This service factor places New Bank in a grouping of the lowest four in the bank industry within the vibrant consumer market. The only three banks with lower operating costs also operate older and less reliable operations, and even then the lowest vibrant consumer cost in the banking industry is currently the American Express Bank at 6.43 cents per service (www.frbsf.org).

Market Analysis Summary

New York is the best place in the continental United States to start an bank. New Bank's management decision to do just that is based upon extensive research compiled from The Department of Commerce Report data. This data provides a reliable source (based upon a compilation of actual bank costs and services) of origination demand by consumer, by day. The other keys factors that resulted in the choice of New York as a locality derive from management's experience and knowledge in commercial banking. Principal to the decision is an insider's understanding of the problems that face New Bank, the newly entered bank in the ...