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Medium Profitability Improvement

Bailey Brothers Bancorp

#Financial Services #Banking
ProHub Comment

This case tests the candidate's ability to read graphs, perform basic financial calculations, and identify cost-reduction opportunities in a digitizing industry. The key insight is recognizing that customer behavior has fundamentally shifted toward online channels (85% in 2018), making physical branch infrastructure inefficient and redundant.

Estimated Time 15 minutes
Difficulty Medium
Source ROSS
50 / 100
Our client, Bailey Brothers, is a retail bank with several branches in Ann Arbor, Michigan. Their main competitor is Potter & Co., a regional bank that also operates in and around the Ann Arbor area. The CEO of Bailey Brothers, George Bailey, would like us to recommend ways to improve overall profitability in the face of an increasingly modernized industry.

Clarifying Information

  1. Bailey Brothers and Potter both offer checking, savings, and retirement accounts, as well as mortgages and auto loans, CDs, and investment accounts.
  2. Bailey Brothers and Potter both have well developed mobile apps and online capabilities.
  3. Bailey Brothers has eight equally sized branches, has been in Washtenaw County for several decades, and is not considering expanding its footprint at this time.
  4. George would like to bring his profit margin to that of Potter’s within two years.