An exploratory analysis of asset allocation and performance in large commercial banks.

摘要

The dissertation's research examines the impact of asset funding on selected operational activities, internal growth measures, and financial performance for Peer Group 1 commercial banks utilizing correlation analyses of both untransformed and first-difference time series over 4 years. Data from the Statistics on Depository Institutions database are organized to represent asset allocations, operational metrics, internal growth, and financial performance. The first difference transform is thought to best replicate the incremental nature of budgeting, and best represent the changes in operating and performance activities associated with changes in resource allocation.; Frei, Harker and Hunter's (FH & H) pilot study of performance in consumer financial services organizations sought to explain how technology, human resources and process management methods vary across commercial banks, and how the variation affects performance. They looked at productivity and efficiency using Leibenstein's X-efficiency (1966, 1980), a benchmarking technique that describes the general efficiency of a firm, measured on managerial and technological criteria, in transforming inputs at minimum cost into maximum profits.; Frei, Harker and Hunter followed-up the pilot study with an intensive look at innovation in retail banking. Their report, Innovation and Efficiency in Retail Banking, confirmed that large inefficiencies in U.S. banking operations contributed to sub-optimal profits within the industry (Berger et al, 1993) and concluded that bank management is effective in asset allocation but weak in aligning the use of assets with strategy. The researcher proposes Planning, Programming and Budgeting System to help improve the use of assets and help align that use with the corporate strategy.; Narasimhan and Jayaram (N&J, 1998) developed a conceptual model of supply chain management that includes sourcing decision, manufacturing goal achievement, customer satisfaction, and financial performance variables.; The research uses a quantitative model to supplement and test a conceptual model adapted from the FH&H and N&J models with data, obtained from the Uniform Bank Performance Report database, consisting of four sourcing decision, six operating metric, and eight performance variables.; The results show that, in general, increases in resources allocated to a group are correlated with increased outcome in several of the operational metric variables, several of the internal growth variables, and several of the financial performance variables.