Business — Banking — Management — Marketing & Sales

Assessment of Performance — Introduction

Category: Strategy Implementation

Different levels of assessment

Assessing a strategy is something to be done by the different levels of management involved in the change. Depending on their responsibilities, the interest will be different, and the information tools will be adapted as well. The top management of the bank would be more interested in global activity and profitability indicators, and by the financial statements showing, internally and to the Board and the shareholders, the actual situation.

Role of the financial department

The key function here is the financial or accounting department of the bank, consolidating and validating the statements that constitute, once audited by the external auditors, the official and published figures regarding the balance-sheet, the profit and loss figures and the risk statement

Operational use of a budget

As a complement to the global financial figures, the budget is the tool allowing the management to quantify the expected return of its strategy, and to project the revenues, the costs and the profitability. Then, on a day-to-day or month-to-month basis, the actual results can be compared with the expectations, and a corrective action can be decided if necessary.

The budget can be established at any business unit level, with a consolidation for the whole bank. A discussion of the budget proposals between the business unit and the head-office, when the budget is established (end of the year for the following year), is usually very useful. The consistency of the figures, the determination of the targets can be discussed in order to be sure that the expectations are both stimulating and realistic.

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