The current practice of bank long-range planning

This paper reports on a recent survey of long-range planning practices in 105 large United States banks. The survey results indicate that long range planning is a relatively new corporate activity with more than half the respondents initiating long range planning the last 5 years. To the extent these banks lead others, this finding suggests greater adoption of long range planning systems in small and medium size banks in the future. Profitability and growth goals are the primary goals quantified in the planning process. These goals are pursued via various strategies. Profit goals are typically pursued by improving pricing policies, adjusting mix and maturity of assets and liabilities to minimize adverse effects of interest rate fluctuations, managing spreads through proper loan pricing and bond portfolio management and tightening cost control with a particular emphasis on non-interest expense. Growth goals are achieved by branch expansion, use of bank holding companies, and increased market penetration through product diversification and sales training programmes designed to develop new business. In addition, information is presented on trends that appear to be developing in the area of long-range planning in the banking industry.