High Performance: Still the Holy Grail in Banking
Many of us remember the “good years” in banking. Between 2002 and 2004, we achieved historically high numbers as an industry in Return on Assets and Return on Equity. Net Interest Margin was still viable, and Non Interest Income was on the rise.
Depending on asset size, high performing banks regularly achieved a 2+ ROA and a 16+ ROE. Those numbers were so solid that they were a beacon for those banks looking to improve. But even if true “High Performance” was not within reach, banks could set themselves incremental goals across performance measures, implement manageable changes to maximize their performance, and attain meaningful improvements. Margins and growth trends favored the banker at that time.
Then everything changed. Economic downturn turned into the Great Recession, and even formerly high performance organizations started to congratulate themselves on another year of keeping the doors open. The goals of high performance were replaced with goals of survival, and as we all know, not everyone made it.