GWB’s $34M fall in profitability has been primarily caused by a fall in revenues and specifically a fall in the interest rates it is charging. Although there has been a modest increase in GWB’s interest-bearing deposits, GWB is earning 20% less in interest on its deposits, which appears to be due to falling interest rates across the industry.
While it may be tempting to cut ancillary client services like notary services, our market research indicates that cutting these services could lead to at least a 20% drop in our interest-bearing deposits and revenue due to the large volume of deposits held by customers using notary services.
As a next step, we could consider other cost-cutting measures such as retraining our bank tellers and loan officers to handle notary services, enabling us to realize the potential $7.5M cost savings from laying off our notaries without losing customers. We should also consider long-term solutions to boost revenue such as M&A, which would improve our bargaining power with customers, or opening additional bank branches.