Jenn Markus’ Post

Core deposits drive the value and viability of your financial institution. The TFP Benchmark helps financial institution CFOs compare their core funding performance against peers and competitors and use the intelligence to refine their core deposit strategies. Who doesn't want to get better at this? This is a great tool (and outstanding thought leadership) for financial institution CFOs, ALCOs, and executive management teams who seek to better navigate their FI's path to growing profitable, plentiful core deposits. Helps answer the question, "What can I do to ensure the long-term health, value, viability, and relevance of my bank to our customers, employees, and shareholders?" Please reach out to Neil Stanley for more details, or comment below/reach out to me with your thoughts on this.

In the current banking climate, all FIs should be carefully examining the deposit acquistion tools they have at their disposal. I recommend that they examine the key tools that #Corepoint has to offer

How do we validate our financial institution's strategy in acquiring term deposits? Traditionally, it's been hard to get an objective answer.  Some will demand LOW COST, yet others proclaim GROWTH. When measured alone either of these are faulty in defining success. Today, we're announcing a benchmark to address this challenge – The Term Funding Profit Benchmark, or TFP Benchmark – to help you gain greater control over measuring term deposit acquisition performance. The TFP Benchmark addresses significant challenges obscuring deposit performance assessments by: - Providing a complete picture of both deposit pricing and volume - Remaining independent of returns provided by assets - Applying to any institution, no matter its asset size - Defining profit based on comparisons to objective and public data, such as Federal Home Loan Bank advances We welcome thoughts about this new benchmark from industry experts and all practitioners including Glenn Grossman, Dale Sheller, Ryan Hayhurst, Keith Reagan, Justin Bakst, Darnell Canada, Joe Kennerson, Omar A. Hinojosa, CFA, Gary L. Svec, CPA, Michael Ritter, Preston Afrank, Brad Resnick, Alisha Crafton, Connie Loveland, and Tom Grottke. You can receive the benchmark results each month – for free – by signing up at https://lnkd.in/gcrhPFTk. What did high-performers' cost of funds look like in March? Read our coverage at https://lnkd.in/gTUUn_9B

With rates skyrocketing cost of funds by 16x during the past two years, executives have good reason to return to the industry's roots: Thrift. But does cost cutting – as in demanding low, time deposit prices from your market – necessarily result in greater profitability? The opposite can be the case in the CD portfolio, but there's so much subtlety to banking that it can be hard to tell. According to a new metric published by The CorePoint and Neil Stanley, too much thriftiness can save money - but at the cost of institutions' profitability. Take a look at this new benchmark ranking for March; it shows real results from actual institution pricing activity! #deposits #bankingindustry #markets #economy #investing

RelPro, Inc., thanks for posting this article from bankdirector.com offering tips to bank leaders on building a deposit-driven strategy to augment your loan growth strategy. #bankingindustry #deposits #salesintelligence

Many financial institutions are focused on commercial deposit growth in 2024. One key to success in deposit gathering is leveraging company insights to identify growth opportunities. Using industry and company intelligence can help bankers identify opportunities in deposit-rich industries and target prospects to drive their deposit-growth strategies. https://lnkd.in/etyA76aY #commercialbanking #businessbanking #businessdevelopment #Relationshipmanagement #ClientEngagement #Deposits

Premature FD Closure: What You Need to Know Before Breaking Your Fixed Deposits?  Premature FD closure involves withdrawing a fixed deposit before its maturity. While it offers liquidity during emergencies, it comes with penalties and potential loss of interest income. This guide covers reasons for early closure, the process, financial impacts, and alternatives like partial withdrawals and loans against FDs, ensuring informed decisions. https://lnkd.in/gEdjr9FF

Below is a summary of the results from a range of the major banking groups and some other financial actors around the world. The results focus on the largest institutions which provide wealth management. Not all banks report on a calendar year schedule, and not all the institutions are alike, so the results from standalone institutions should be viewed differently from wealth management results embedded within a larger group. These results may be subsequently revised. Not all the banks reported on the same day.

Always remember that banks sell financial products, not financial advice. https://lnkd.in/en5wN-3G Some crazy - but not surprising - quotes in this article from CBC: -The TD employee says she's usually not acting in the best interest of her clients — she's trying to sell them products that will help her meet sales targets and keep her from being fired. -"I had to mislead customers into getting products that they didn't need, to reach my sales target," said a recent BMO employee. -"It's not a customer service … environment," a former Scotiabank employee said. "We're there to sell — and make money for the bank." These bank employees' experiences are consistent with documented evidence on bank financial advice. A 2018 paper uses data from a large Swiss retail bank to analyze how banks and their financial advisors generate profits from customers. https://lnkd.in/eMA5htJw Spoiler: it's at the expense of customers. The authors show that the bank’s own mutual funds and structured products are most profitable for the bank, and bank advisors tend to recommend them. Advised trades are associated with higher profits for the bank than independently executed trades of the same client. They additionally find that the investment performance of advised clients is worse than that of independent clients. This suggests, to nobody's surprise, that bank financial advisors put their employer’s interests ahead of their customers'.

In the financial sector, a key indicator of a bank's earning potential is the CASA ratio. But what exactly is CASA? CASA stands for Current Account Savings Account, and this ratio compares the deposits in a bank's current and savings accounts to its total deposits. A higher CASA ratio is a positive sign for a bank because it means more low-cost funds are available for lending and investment, translating into greater profitability. Here’s how it works: Current accounts typically offer no interest, making them the cheapest source of funding for banks. The magic happens when banks lend these funds at a much higher interest rate, creating a spread that drives their earnings. This is why banks focus heavily on attracting current deposits by offering perks like free credit cards, zero-fee services, and other premium facilities to individuals and businesses with large balances. The larger the deposit, the more value they see in nurturing these relationships. As a Manager in Financial Sector Assurance, I regularly witness how important these low-cost deposits are for a bank’s financial health. The ability to maintain a healthy CASA ratio allows banks to remain competitive and maximize returns for stakeholders. In simple terms, the more current deposits a bank holds, the more they can earn by lending or investing that capital elsewhere at higher interest rates. Stay tuned for my next post, where I’ll dive deeper into how this impacts interest margins and overall banking profitability.