What You'll Learn
- Deconstruct bank profitability drivers (yield on loans vs cost of deposits).
- Analyze risk-weighted assets (RWA) and loan loss reserves.
- Evaluate retail customer acquisition costs (CAC) and deposit stickiness in digital-only banking.
Lesson Overview
Master Net Interest Margin (NIM) expansion, credit underwriting risk, Basel III capital reserve requirements, and digital-first neo-banking cost models.
Imagine your interviewer says: "Your client is MetroBank, a traditional regional bank with 300 branches. Rising interest rates have forced them to increase deposit interest to retain customers, while their long-term mortgages yield fixed low rates. Their Net Interest Margin (NIM) has shrunk by 1.2%. How would you advise them to recover profitability?"
Why This Matters for Consulting Interviews
Financial services cases test your understanding of balance-sheet driven business models, where capital itself is the inventory and leverage is highly regulated.
Prerequisites
- Case Math
- The MECE Principle
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