LoBue: Real Resources: Success Story: Bank Privatization/Internationalization

SUCCESS STORY: BANK PRIVATIZATION/INTERNATIONALIZATION

CLIENT:	Retail Banking and Treasury Operations
CONTACT:	Managing Director
MAJOR FUNCTIONS:	All Bank Functions

SITUATION
For many years the bank had been operating as a government-owned institution. In 1997, a private company comprised of a group of international investors purchased a majority share in the organization and determined that in order for the bank to achieve the measure of success that was possible, assistance of an outside consulting firm would be required.

LoBue Associates was asked to provide a preliminary assessment of the institution and submit recommendations for improving overall bank-wide performance. An external environmental scan revealed many of the same issues facing financial institutions worldwide, including rapidly changing technology and consumer behavior. Complicating the situation were recovery efforts resulting from the devastation of the Gulf War and falling oil prices - both of which had macro effects on the economy.

Internally, the situation was no less challenging. At the outset of the project basically no senior management team was in place - - during the course of the engagement, 7 of the 8 senior officers in the organization were hired, including the Managing Director. Compounding the lack of leadership was an institution with multiple layers of management, outdated processes, non-existent standards, unfocused training and an overall lack of quality of service ownership by the employees.

LOBUE RECOMMENDATIONS
The program centered on the need to establish a solid platform that would allow the bank to gain market share, expand its delivery systems, increase its profitability and generally become a more efficient and effective organization. Toward that end, seven core initiatives were identified beginning with the creation of a new organization design. From there the focus shifted to a critical review and analysis of the key managing and operating processes for each of the core units, including the creation and staffing of new divisions such as Risk Management, Credit Policy and Private Banking.

LoBue recommended the complete overhaul of the bank's infrastructure and redesign of core departments. The scope of the initiative eventually touched every function in the organization including all bank operations, Retail & Corporate customer contact areas, Finance & Accounting, Credit Administration, Trade Finance, Treasury, Human Resources and Information Technology.

REAL RESULTS

Hundreds of processes were redesigned, eliminating an average of 2.5 handoffs per process, more than 200 Key Performance Measures were developed and implemented, many of which had an immediate impact on 25% increase in productivity. The new organization during the life of the project was able to increase Documentary Credits-LC Issuance by 60%, Loans processed by 100% and Funds Transfers by 144% without an increase in base staff.
Corporate Governance, directional and oversight responsibilities were addressed through the formation of such committees as ALCO, Investment, and Technology planning. Included in the achievements was the development and rollout of a comprehensive Corporate and Retail Credit policy.
Detailed Skills Assessments for all core employees were completed, 19 Service Level Agreements, 80 job descriptions and 350 Desktop procedures were planned, approved and were at various stages of implementation upon completion of the project.

A conservative estimate of direct program benefits totaled in excess of US $2.8 million representing a return-on-spending of just under 2-to-1.