Who pays for branches?

Article Abstract:

The survival of urban branches of banks depends on its fixed business customer, not the consumer. Generally, consumers cannot be expected to defray the costs of urban branch overheads because of their mobility, which provide them the luxury of greater selection on which areas to bank. However, a fixed customer is confined to the site of his business and here is when banks can maximize their services. Urban bank branch managers must earn enough on the deposits from nearby businesses to recover fixed costs and to meet projected rates of return.

Management, Branches (Business enterprises)

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Increasing mortgage values

Article Abstract:

The origination of mortgage loans is viewed as unprofitable under generally accepted accounting principles because of its outlying costs. This conventional view of accounting is misleading, as becomes apparent when an expected-value perspective reveals origination as a potentially profitable source of business. A reasonable market for loans and services at the portfolio level exists that can enhance returns.

Standards, Banking industry, Finance, Accounting and auditing, Accounting, Bank investments, Mortgages

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Who really pays for branches?

Article Abstract:

A follow-up article that argues that 'consumers will not pay for the convenience of a branch location' and that automated teller machine networks have 'reduced and perhaps destroyed the advantages of a well-placed branch network' is presented. The twin statements are branded as seriously flawed, counterproductive and at variance with the observable realities of retail banking.

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