CHAPTER EIGHTEEN Creating And Managing Service Outlets: New Charters, Branches, And Electronic Facilities.
The purpose of this chapter is to learn how new banks are chartered by state and federal authorities in the United States, to determine what makes a good site for a new branch office, to recognize how the role of branch offices is changing, and to explore the advantages and disadvantages of automated banking facilities.
Organizers of New Banks Demonstrate Public Need for the New Bank By Showing That Local Banks Are Not Conveniently Located or That Existing Banks Fail to Offer Some Key Services
The Decision of Whether to Establish a Branch Office is a Capital Budgeting Decision. The Present Value of the Net Future Cash Flows Should Be Larger Than the Initial Outlay
Reducing a Bank’s Overall Risk Exposure to its Total Return By Establishing Service Facilities in Different Market Areas Whose Individual Returns are Not Highly Correlated with the Returns from a Bank’s Existing Market Locations
Banking Offices Set Up Inside Retail Stores in Malls in Order to Reduce Construction Costs
The Bank Examines the Present Value of the Stream of Cash Savings from the New ATM Machine