CITY UNIVERSITY OF PASAY

COLLEGE OF BUSINESS ADMINISTRATION

Balancing Growth and Stability: A Deep Dive into CTBC

Bank's Financial Challenges and Solutions
(Statement of the Problem)

Presented To: Mr. Edwin Bernas

A Partial Requirement for the Course

Global banking with E-Banking, Credit & Collection,
Banking & Financial Institution

Submitted By:
Barbosa, Raniel M.
3-4 BSBA Financial Management
 CITY UNIVERSITY OF PASAY
COLLEGE OF BUSINESS ADMINISTRATION

STATEMENT OF THE PROBLEM

CTBC Bank, a foundational institution in Taiwan's financial sector since

its establishment in 1966, confronts a myriad of challenges that threaten its

enduring prosperity and operational resilience. An analysis of pertinent data

reveals a concerning decline in interbank loans receivable juxtaposed with a

notable surge in investment properties and other assets. This dynamic suggests

potential shifts in lending strategies and asset allocation, underscoring the

imperative for strategic recalibration to sustain competitiveness.

Furthermore, the mounting total operating expenses and impairment

losses, despite heightened loan volumes, underscore inefficiencies in cost

containment and risk evaluation protocols. These trends pose formidable

hurdles to the bank's financial robustness and operational efficacy,

emphasizing the exigency of strategic interventions to curtail their

ramifications.

Against the backdrop of heightened competition, economic volatility, and

regulatory exigencies, addressing these challenges is imperative for CTBC

Bank's enduring prosperity and operational longevity. Vigilant cost

management, fortified risk mitigation frameworks, and strategic alignment

with evolving market dynamics are essential to navigate the ever-evolving

financial milieu adeptly. By discerning and rectifying the underlying root

causes fueling these challenges, CTBC Bank can consolidate its position as a
 CITY UNIVERSITY OF PASAY
COLLEGE OF BUSINESS ADMINISTRATION

bastion of stability and innovation, ensuring resilience amidst the intricacies

of contemporary banking.

1. Case Identification and Background:

CTBC Bank, founded in 1966, has evolved into a significant financial

institution in Taiwan, offering a diverse range of financial services globally.

Despite its esteemed reputation, CTBC Bank faces multifaceted challenges

that demand attention. Recent data analysis highlights several key areas of

concern. Interbank loans receivable have declined, indicating a potential shift

in lending focus, while investment properties and other assets have seen

significant increases. However, these expansions are accompanied by

challenges, including rising total operating expenses and impairment losses,

despite higher loan volumes. Understanding the context in which these

challenges arise is crucial.

2. Context and Surrounding Factors:

CTBC Bank operates in a dynamic banking sector influenced by economic

trends, regulatory requirements, and technological advancements. Intense

competition, both locally and globally, necessitates adaptability and strategic

foresight. Regulatory compliance is paramount, with adherence to banking

regulations and response to government policies shaping the operational

framework. Moreover, technological innovation is imperative, given the rapid

 CITY UNIVERSITY OF PASAY
COLLEGE OF BUSINESS ADMINISTRATION

evolution of digital banking and customer expectations. Economic dynamics,

both in Taiwan and globally, directly impact the bank's operations, requiring

keen awareness and agility in response to market fluctuations and trade

dynamics.

3. Identification of Specific Problem:

The data reveals several specific challenges for CTBC Bank. Declining

interbank loans receivable, coupled with increased investment in properties

and assets, signals a strategic shift that may introduce operational

complexities. Moreover, rising total operating expenses and impairment losses

raise concerns about cost management and credit risk. These challenges

underscore the need for CTBC Bank to reassess its strategies and strengthen

its operational and risk management frameworks.

4. Relevance and Significance of the Problem:

The challenges identified have significant implications for CTBC Bank's

financial performance and competitiveness. A decline in interbank loans

receivable could impact lending profitability and revenue streams, while

increased investment introduces additional risks. Rising expenses and

impairment losses threaten cost efficiency and credit quality, jeopardizing the

bank's stability and regulatory compliance. Addressing these challenges is

essential for CTBC Bank's long-term viability and reputation in the industry.
 CITY UNIVERSITY OF PASAY
COLLEGE OF BUSINESS ADMINISTRATION

5. Root Cause Analysis:

Several root causes contribute to CTBC Bank's challenges. Outdated

operational systems hinder agility and efficiency, while inadequate risk

management practices expose the bank to various risks. Ineffective cost

control measures lead to rising expenses, and misaligned strategic priorities

result in suboptimal decisions. Additionally, a lack of organizational agility

impedes the bank's ability to respond effectively to market dynamics.

Identifying and addressing these root causes is crucial for CTBC Bank to

overcome its challenges and thrive in the competitive banking landscape.