CASE ANALYSIS 2: RURAL BANK OF SUARES
Peter Arguelles is bank general manager at Rural Bank of Suares. During the stockholder’s meeting, he proposed that the bank should open another branch in the city but the stockholders are questioning this movement given that there are already big banks in the city and there is already two rural banks.
Based from the company’s history, they have financial difficulties for almost 20 years because of the government’s lending program.
Point of View:
The stockholders’ point of view will be used in this case
Statement of the Problem:
How can the stockholders deal with the expansion proposal of Peter Arguelles?
Statement of Objectives:
• To know what is the best option for stockholders that will benefit RBS
← To have a sustainable growth for RBS
← To increase the market awareness
Areas of Consideration (Analysis and Assumptions):
One of the things that the company should consider for expansion is their financial capability. Based from the income statement that was presented, it showed that the company had an increase in their net income for almost 36% in just one year. This shows that the bank has a potential in terms of growth based from their income statement.
But the company should also consider that since they wanted to expand in the city, they should make sure that the location of the branch is strategic since there are already existing banks in the market. If they can look for a strategic location, this will greatly benefit them since there is an opportunity for them to be known by the market. It will strengthen their market coverage and geographic reach since they do not have yet a branch in the city. And in this way, it will also help their clients since the branch that they will open is now more accessible. Although they are a rural bank, they should also consider their security since they will now cater to more people...
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