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🤖 GPT
The prompt creates a full thesis and business plan with Summary of findings, recommendations, business expansion strategy, necessary adjustments to comply with regulations, Risk mitigation measures, Next steps
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Over 1 month ago
Prompt Details
Model
Chat - GPT-4 (gpt-4)
Token size
324 ($0.00970 / call)
Example input
A medium-sized savings bank in Bad Soden (Taunus) wants to increase its interest income. A possible suggestion is an increase of its home loan business by € 100 Mio. by decreasing its investments in German government bonds. In order to reach the goal, the bank wants to offer home loans to private individuals with maturities of 15 and 20 years. Also it wants to offer clients the possibility to extend their existing home loans during the last 4 years until maturity for an additional 10 years. The idea originated during the time period of negative interest rates; therefore the impact of the new interest rate environment on the proposal should be discussed.
The € 100 Mio. will be funded by 30% current accounts (Girokonto) and 70% savings accounts. This was also the funding of the government bonds which will be substituted. These accounts belong to private individuals and they are modelled as being sticky.
these are the assets on the balance sheet of the bank:
100 inter bank
250 German government bonds
100 home loans
100 loans to individuals
200 loans to small firms
these are the liabilities on the balance sheet of the bank:
400 savings deposits
200 current accounts
150 equity
Example output
I. Executive Summary
A. Introduction
B. Key findings
C. Recommendations
II. Introduction
A. Framing: Quick rundown of the Bank Bad Soden and changing environment
B. Objective: Increase interest income by €100 million through home loan business expansion
C. Strategy to revisit: Decrease investments in German government bonds and offer extended home loans
III. Background
A. Current balance sheet composition
1. Assets
2. Liabilities
B. Historical interest rate environment and its impact on the industry
C. Current interest rate environment and potential implications
D. Top level FTP / Division Structure (Schmaltz) for Bad Taunus Bank
IV. Proposed Home Loan Business Expansion
A. Home loans to private individuals
1. 15-year maturity loans
2. 20-year maturity loans
B. Home loan extensions
1. Last 4 years until maturity
2. Additional 10-year extension
C. Government Bonds
1. Current Split (see sources)
2. Different kinds (maybe merge 2&3)
3. Different substitutions
D. Funding strategy
1. 30% current accounts (Girokonto)
2. 70% savings accounts
V. Impact on Bank Treasury
A. Liquidity management
1. Cash flow projections
2. Contingency planning
B. Interest rate risk management
1. Duration and gap analysis
2. Hedging strategies
C. Capital management
1. Capital adequacy ratio
2. Leverage ratio
VI. Regulatory Regulations Impact
A. Basel III framework
1. Capital requirements
2. Liquidity requirements
B. European Banking Authority (EBA) guidelines
1. Supervisory Review and Evaluation Process (SREP)
2. Stress testing
C. Implications for the bank's compliance
1. Necessary adjustments
2. Potential risks
VII. Funds Transfer Pricing (FTP) Impact
A. Definition and importance of FTP
B. Current FTP methodology
C. Proposed changes in FTP due to the home loan business expansion
1. Allocated costs
2. Margins and profitability
VIII. Risks and Mitigation Strategies
A. Credit risk
1. Risk assessment and scoring
2. Diversification and concentration risk
B. Operational risk
1. Internal controls
2. Business continuity planning
C. Market risk
1. Interest rate risk
2. Currency risk
IX. Financial Projections
A. Income statement
B. Balance sheet
C. Cash flow statement
D. Key performance indicators
X. Conclusion
A. Summary of findings
B. Recommendations
1. Optimal home loan business expansion strategy
2. Necessary adjustments to comply with regulations
3. Risk mitigation measures
C. Next steps for implementation