Annexure: Learning Logs After The End of Each Round

Annexure
Learning Logs after the end of each round
Round 1:
Decisions:
Budget for the round
Profit -162
Change in total income, % -33.43
Deposits
Demand deposits
Interest offer, basis points
Retail 40.00
Private 80.00
Deposit withdrawal price, %
Retail 1.50
Private 1.50
Fixed-term deposits
Interest offer, 12-month fixed-term deposits, basis points
Retail 250.00
Private 280.00
Retail 320.00
Private 345.00
Credit products
Margin, bp
Mortgage loans
Retail -12-month 125.00
Private - 12-month 75.00
Retail - 5-year 175.00
Private - 5-year 150.00
Consumer loans
Retail 400.00
Private 350.00
Point of sale credit
Retail 400.00
Private 350.00
Credit cards
Retail 400.00
Private 350.00
Lending terms
Expense to income - Mortgage loans 55
Expense to income - Consumer loans 33
Expense to income - Point of sale credit 33
Loan to value, % - Mortgage loans 75
Maximum maturity, years - Mortgage loans 30
Loss of life
Sales channels
Point of sales network

Sales personnel allocation 10
Cashback, % 6.00
Corporate sales
Marketing management
Deposits 30.0
Consumer loans 35.0
Credit cards 35.0
SME
Deposits
Interest offer, basis points 65.00
Margin, %
AAA 100.00
AA 125.00
A 170.00
BBB 275.00
BB 1100.00
B 1700.00
C 0.00
Other lending terms
Lending terms Strict
Competitive positioning
Sector targeting Emphasize domestic
SME products Cater to most needs
Corporate
Service pricing
Priority
Equity capital Markets Yes
Debt capital markets No
Mergers & Acquisitions Yes
Service pricing
Equity capital Markets 4.75
Debt capital markets 2.40
Mergers & Acquisitions 1.50
Advisory fee 125
Income statement, k €
Promotion 250
Investments - Services
Portfolio management
Segment - Private All potential customers > 100k€
Segment - Institutions All potential customers > 250k€
Management fee - Private 1.00
Management fee - Institutions 0.75
Advisory services - Private 25
Brokerage services
Account 1.50
Premium services - Retail 7.50
Premium services - Private 3.75
Transaction fees - Retail 0.23
Transaction fees - Private 0.15
Expenses
Retail
Personal selling & events 100
Media & advertising 100
Private
Personnel allocation
Hiring & layoff

Retail 80
SME 30
Corporate 20
Investment 25
Back office 18
Personnel policies
Employee compensation and performance pay
Compensation Competitive compensation (+ 35%)
Performance pay Modest performance pay (up to 20% of wage)
Profit share, % 0.00
Training program priorities and budget
Sales development Yes
Products & services No
Internal processes Yes
Regulatory compliance No
Training time per new employee, days 30

Training time per old employee, days 15
Management relations and HR development
Management relations and HR development Periodic performance reviews and follow-up
Systems
Internet banking services 250

Customer service processes and experience 250
Systems development Tech bellwether
Risk
Risk management policies

Risk management budget 4 000
Overdue credit allocation 12
Treasury
Interbank lending 0
Treasury bonds, € 5.0
Foreign bonds, $ 3.0
Long-term bonds @ B 15 000
Subordinated debt @ B 5 000
Share issue (+) / repurchase (-), K shares 0
Dividend payment 0
Learnings:
The results were as expected. We did fairly well in terms of shareholder value creation. Our loan
book grew significantly. Our AUM was the highest among all. Regulatory capital was more than
expected. The strategy to give cheap loans worked very well
Round 2:
Decisions:
Profit -8 702
Deposits
Demand deposits
Retail 60.00
Private 110.00
Retail 1.50
Private 1.50
Fixed term deposits
Interest offer, 12-month fixed term deposits, basis points
Retail 260.00
Private 300.00
Retail 335.00
Private 355.00
Credit products
Margin, bp
Mortgage loans
Consumer loans
Retail 415.00
Private 365.00
Retail 415.00
Private 365.00
Credit cards
Retail 415.00
Private 365.00
Lending terms
The expense to income - Mortgage loans 60
The expense to income - Consumer loans 33
The expense to income - Point of sale credit 33
Loss of life
Sales channels

Cashback, % 6.00
Corporate sales
Deposits 35.0
Consumer loans 35.0
Credit cards 30.0
SME
Deposits
Margin, %
AAA 110.00
AA 130.00
A 175.00
BBB 280.00
BB 710.00
B 1350.00
C 0.00
Other lending terms
Sector targeting Target domestic
Corporate
Service pricing
Priority
Debt capital markets Yes
Mergers & Acquisitions No
Service pricing
Advisory fee 125
Promotion 250
Brokerage services
Account 1.50
Expenses
Retail
Private
Hiring & layoff

Retail 85
SME 32
Corporate 22
Investment 27
Back office 20
Personnel policies
Sales development No
Products & services Yes
Internal processes No
Regulatory compliance Yes

Systems

Risk

Treasury
Interbank lending 0
Long-term bonds @ BBB 25 000
Subordinated debt @ BBB 15 000
Dividend payment 0
Learnings:
In this round, we went with the same strategy. We decreased our interest rate on loans further due
to which NIM (Net Interest Margin) was further reduced. Our loan book also grew significantly but
since we had a low-interest margin, our profits plummeted significantly.
Round 3:
Decisions:
Profit -15 685
Deposits
Demand deposits
Retail 110.00
Private 160.00
Retail 1.50
Private 1.50
Fixed-term deposits
Retail 260.00
Private 300.00
Retail 330.00
Private 350.00
Credit products
Margin, bp
Mortgage loans
Consumer loans
Retail 480.00
Private 450.00
Retail 470.00
Private 425.00
Credit cards
Retail 480.00
Private 425.00
Lending terms
Loss of life
Sales channels

Cashback, % 6.00
Corporate sales
Deposits 40.0
Consumer loans 30.0
Credit cards 30.0
SME
Deposits
Margin, %
AAA 120.00
AA 140.00
A 190.00
BBB 290.00
BB 720.00
B 0.00
C 0.00
Other lending terms
Sector targeting Balanced approach
Corporate
Service pricing
Priority
Service pricing
Advisory fee 135
Promotion 250
Brokerage services
Account 1.20
Expenses
Retail
Private
Hiring & layoff

Retail 85
SME 35
Corporate 50
Investment 35
Back office 30
Personnel policies

Systems

Risk

Treasury
Interbank lending 0
Long-term bonds @ A- 40 000
Subordinated debt @ A- 10 000
Dividend payment 0
Learnings:
We continued with the same strategy of selling cheap loans to high-grade corporates because we
wanted to build a strong loan book. We also attracted good deposits because of attractive interest
rates. We were losing shareholder value because of minimal profits but we thought we can cover it
up later.
Round 4:
Decisions:
Profit 379
Deposits
Demand deposits
Retail 65.00
Private 110.00
Retail 1.50
Private 1.50
Fixed-term deposits
Retail 250.00
Private 280.00
Retail 300.00
Private 330.00
Credit products
Margin, bp
Mortgage loans
Consumer loans
Retail 400.00
Private 380.00
Retail 420.00
Private 390.00
Credit cards
Retail 420.00
Private 380.00
Lending terms
Loss of life
Sales channels

Cashback, % 6.50
Corporate sales
Deposits 30.0
Consumer loans 35.0
Credit cards 35.0
SME
Deposits
Margin, %
AAA 85.00
AA 110.00
A 130.00
BBB 200.00
BB 900.00
B 0.00
C 0.00
Other lending terms
Lending terms Balanced
Sector targeting Target domestic
Corporate
Service pricing
Priority
Equity capital Markets No
Service pricing
Advisory fee 135
Promotion 500
Brokerage services
Account 0.80
Expenses
Retail
Private
Hiring & layoff

Retail 85
SME 35
Corporate 55
Investment 45
Back office 40
Personnel policies
Performance pay Risk takers' dream package (up to 75% of wage)

Management relations and HR development Active HR development and open involvement
Systems

Risk

Treasury
Interbank lending 0
Long-term bonds @ AAA 40 000
Subordinated debt @ AAA 10 000
Dividend payment 1 250
Learnings:
We learnt that all this time we were catching up with the competition. We had no differentiating
factor and we were not good in any single business line. To attract loans, we shrank NIM which
backfired. Rate cuts which we were doing were not proportional to the volume which we were
expecting. This was the biggest learning
Round 5:
Decisions:
Profit -10 192
Deposits
Demand deposits
Retail 75.00
Private 110.00
Retail 1.50
Private 1.50
Fixed-term deposits
Retail 265.00
Private 280.00
Retail 320.00
Private 330.00
Credit products
Margin, bp
Mortgage loans
Consumer loans
Retail 350.00
Private 340.00
Retail 350.00
Private 320.00
Credit cards
Retail 350.00
Private 320.00
Lending terms
Loss of life
Sales channels

Cashback, % 11.00
Corporate sales
Deposits 40.0
Consumer loans 30.0
Credit cards 30.0
SME
Deposits
Margin, %
AAA 80.00
AA 100.00
A 110.00
BBB 160.00
BB 460.00
B 0.00
C 1000.00
Other lending terms
Sector targeting Emphasize domestic
Corporate
Service pricing
Priority
Service pricing
Advisory fee 100
Promotion 650
Brokerage services
Account 0.50
Expenses
Retail
Private
Hiring & layoff

Retail 85
SME 35
Corporate 55
Investment 45
Back office 45
Personnel policies
Performance pay Risk takers' dream package (up to 75% of wage)

Management relations and HR development Active HR development and open involvement
Systems
Risk

Treasury
Interbank lending 0
Long-term bonds @ AAA 50 000
Subordinated debt @ AAA 20 000
Learnings:
This was the first round when our interest costs outweighed the interest income and hence, we
made losses. Our ROE went negative. But considering that many of our competitors had made
losses, we were relaxed and we decided that we will go all-in in our next round. Our biggest learning
was that this strategy never works. These types of decisions come in desperation and frustration.
Round 6:
Decisions:
Profit 4 709
Change in total income, % 21.67
Deposits
Demand deposits
Retail 32.00
Private 70.00
Retail 1.50
Private 1.50
Fixed-term deposits
Retail 185.00
Private 240.00
Retail 220.00
Private 270.00
Credit products
Margin, bp
Mortgage loans
Consumer loans
Retail 280.00
Private 220.00
Retail 270.00
Private 210.00
Credit cards
Retail 300.00
Private 270.00
Lending terms
Loss of life
Sales channels

Cashback, % 11.00
Corporate sales
Deposits 15.0
Consumer loans 55.0
Credit cards 30.0
SME
Deposits
Margin, %
AAA 130.00
AA 140.00
A 145.00
BBB 220.00
BB 295.00
B 650.00
C 810.00
Other lending terms
Lending terms Loose
Sector targeting Balanced approach
Corporate
Service pricing
Priority
Service pricing
Advisory fee 75
Promotion 800
Brokerage services
Account 0.50
Expenses
Retail
Private
Hiring & layoff

Retail 100
SME 65
Corporate 30
Investment 45
Back office 30
Personnel policies

Management relations and HR development Things will work out on their own
Systems

Risk

Treasury
Interbank lending 0
Long-term bonds @ AA+ 10 000
Subordinated debt @ AA+ 15 000
Learnings:
In this round, we made our lending terms loose and decided to give loans to C grade corporates. This
was done in not any business sense but to improve our ranks and scores in simulation. As
anticipated, this didn’t work, we made the biggest losses. We ended up last

Annexure: Learning Logs After The End of Each Round

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Annexure

Learning Logs after the end of each round

Budget for the round

Point of sales network

Hiring & layoff

Training time per new employee, days 30

Internet banking services 250

Risk management policies

Budget for the round

Point of sales network

Hiring & layoff

Training time per new employee, days 35

Internet banking services 250

Risk management policies

Budget for the round

Point of sales network

Hiring & layoff

Training time per new employee, days 40

Internet banking services 250

Risk management policies

Budget for the round

Point of sales network

Hiring & layoff

Training time per new employee, days 35

Internet banking services 250

Risk management policies

Budget for the round

Point of sales network

Hiring & layoff

Training time per new employee, days 40

Risk management policies

Budget for the round

Point of sales network

Hiring & layoff

Training time per new employee, days 25

Internet banking services 300

Risk management policies

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