We are not sure when the first signs of a credit shock will appear, but it is coming. When it does, it will be the presence of commercial loan covenants that give banks a competitive advantage of using covenant violations to pressure borrowers so that banks can improve their risk position.
Tag: Loan Covenants
If you think your bank has tough employees, consider a bank that brought in a motivational consultant that had the employees walk on a 6 ft. wide path of hot coals.
If you look to improve the commercial lending customer experience, after the delivery of the term sheet, loan approval and explanation of documentation, walking borrower’s through financial covenants is another material event that impacts a borrower’s view and emotion around a bank’s brand. As we interview banks and borrowers that have the best rated customer commercial lending experience, it seems that this is an area many banks can improve on.
If you ever wanted to know the most popular strategic planning initiative for a bank over the last 3 years it is this one – generate more non-interest income. An estimated 30% of banks have this as their focus. The funny part is that despite this being a major conversation and the source of many meetings, most banks don’t take care of the basics. Today, we will highlight the 12 best ways to generate more fee income when it comes to commercial lending (in no particular order).