FM11 - BANKING ISSUES

• Environmental and Social Responsibility


  Financial management includes addressing ESG risks and opportunities to promote sustainable and responsible banking practices.
• Strategic Planning


  Financial management is closely tied to the overall strategic direction of the bank. Financial managers play a key role in aligning financial goals with the bank' strategic objectives and ensuring that resources are allocated to support these goals.
• Stakeholder Communication


  Effective communication including shareholders, regulatory authorities, and the public, is crucial. Financial managers need to transparently communicate the bank's financial performance and strategy.
• Technology and Innovation


  The financial management of a bank also involves leveraging technology and embracing innovation to improve efficiency, enhance customer experience, and stay competitive in the rapidly evolving financial industry.
• Financial Planning and Budgeting


  Developing financial plans and budgets is essential for effective resource allocation. This includes forecasting revenues, expenses, and capital requirements to ensure that the bank can meet its strategic objectives.
• Regulatory Compliance


  Banks operate in a highly regulated environment, and compliance with various regulatory requirements is crucial. Financial managers must stay abreast of changes in regulations and ensure that the bank complies with them to avoid legal and financial consequences.
• Profitability Management


  Banks need to generate profits to sustain their operations and provide returns to shareholders. This involves optimizing the balance between risk and return on assets, as well as managing costs and improving operational efficiency.
• Capital Management


  Is a critical component for banks, acting as a buffer against unexpected losses. It involves determining the appropriate level of capital to support the bank's risk profile and regulatory requirements.
• Risk Management


  Banks face various types of risks, including credit risk, market risk, liquidity risk, and operational risk. It involves identifying, measuring, monitoring, and controlling these risks to protect the bank's financial health.
• Asset-Liability Management (ALM)


  Banks need to manage their assets and liabilities effectively to ensure that they have enough liquidity to meet short-term obligations while also earning a reasonable return on their investments. It involves matching the maturity and interest rate characteristics of assets and liabilities.