Business and Strategic Plans
Home > Expertise > Strategic Transactions and Regulatory Applications

Business and Strategic Plans

Representative Engagements

Whether submitted with a regulatory application or in response to an enforcement action, business and strategic plans have become increasingly important supervisory tools for financial regulators.

 


Today’s business and strategic plans must meet demanding new standards for capital, liquidity, credit and market risk, management, and other measures of safety and soundness.   They must also withstand increasingly searching inquiries into the viability of the proposed strategy, the credibility of the underlying business assumptions, and the ability of management to execute.  Policy shifts have narrowed the range of approvable business plans.  With management credibility on the line, there isn’t always a second chance.

Promontory helps banks and other financial institutions create business and strategic plans that advance their strategic objectives while also satisfying regulatory expectations.  Promontory’s work in this area includes: 

  • Strategy development and reassessment 
  • Planning narrative drafting and/or review 
  • Modeling and presenting financial projections (including related sensitivity analysis and stress tests) 

Representative Engagements

  • A large nonbank financial institution engaged Promontory to develop a business plan for its proposed de novo bank subsidiary.  Promontory worked with the client to develop a business strategy that both met the client’s strategic and financial goals and was consistent with regulatory expectations and constraints.   Promontory then drafted the business plan narrative and modeled and prepared the accompanying financial projections.  Promontory also helped the client respond to follow-up inquiries from the chartering authority.  
  • A medium-sized community bank engaged Promontory to assist with a strategic plan requirement included in a regulatory enforcement order.  The bank’s regulator had already rejected the bank’s first submission.  Promontory worked with the bank to reassess the proposed strategy and make the changes necessary to satisfy regulatory objections.  Promontory then helped the bank draft a revised strategic plan for resubmission to the agency.  
  • A thrift seeking to convert to a national bank engaged Promontory to help prepare a business plan that addressed potential regulatory concerns with its strategy and condition.  Promontory drafted the business plan narrative after close consultation with the client’s business, risk, and operational units.  Promontory also advised the client’s finance staff in the creation and presentation of financial projections, accompanied by explanations of the underlying assumptions and sensitivity analyses supporting the adequacy of proposed capital and liquidity levels.