What fundamental changes can be expected from Banks?

Dear Readers

Many readers have asked whether there are any recent research articles based on EAGLES and SRQ. The straight answer is there are none.
The reasons are:

  1. We need to plan carefully how, where and when we present our research.
    The banking sector in every nation is a powerful lobby group.
    (My travel visa was nearly revoked twice in 2 countries for presenting research papers on the macroview on weakness of the banking sector. No bank names were disclosed. Many central banks do not wish to hear external researchers telling them the bad news).
    The banks actually know the dangers they take, but greed speaks louder than risk soothsayers).
    Read article from www.leadershipcorp.com blog (Lessons from Financial Crisis March 22, 2009)
  2. We need to carefully screen and analyse bank reporting.
    The banks now know that they are being watched and some (not all) banks are making amends to reduce the risks. Lets wait and see what changes they will make. The key is in their reporting. Follow their quarterly reporting (keep your eyes on, Notes to Accounts and Extraordinary Items, and you will know whether what changes are made.
    Allow time for the "enlighteneded" banks to change. They have to reduce the risks and that usually means less profits.

In summary we need to watch: Can the banks live with 'satisficing' profit (rather maximising profit)? Can the stock market forgive banks for making 'satisficing' profit and that could be lesser profits? How will making sustainable profit affect the bank's senior management? What new bank products will give banks a sustainable profitability? How will the drive for sustainable profitability affect the bank operations? These are key issues facing the banks in the immediate term.



Hello Sir,
I am doing MBA from India, I need the article on EAGLE & SRQ,could you plz send it to my email,its really grateful
my email id is : dimplesharma69@yahoo.co.in.

Hi Sharma, kindly confirm that you have received the 2 articles sent to you.

Ms Sharma, thank you for your continued interest.
Your risk management in banks falls right into what EAGLES is trying to say. I suggest that your research focus on:

  1. Using the EAGLES model to analyze 30 banks in your country.
    Correlate the SRQ with say the ROA, ROE and NPLs.
  2. Use the Loan growth and NPLs provison.
    Corelate loan grwoth rate with NPLs growth rate.
    The implication of EAGLES is that financial prudence is achieved when high NPLs is accompanied by high loan growth. Its very risk for banks to have high loan growth rate but NPLs growth rate stays the same

Dear Sir,
Would you send me also about the EAGLES journals please?
thanks for your kindness

Dear Sir,
I wish to ask you a question which does not relate to the topic you mentioned above. I appreciate your kind response. "How does a bank manage to maintain its CAR (so) high while strong loans growth?"

Thank you very much in advance.


Jenny, have you received my reply on CAR relating to Capital injection and Loan portfolio reengineering?