Optimal balance sheet management requires taking a holistic approach to balancing risk and return when deploying financial resources. Our strategic balance sheet work combines industry expertise with analytical capabilities to optimize both bank and corporate treasuries and enhance sustainable, risk-adjusted performance.
At a time of fluctuating market and economic conditions, both banks and corporations must focus on strengthening resilience and optimizing net income. BCG helps chief financial officers holistically manage and fine-tune their balance sheet to reduce risk and maximize reward—and trains them on how to initiate the right dialogue with their executive board in order to ensure the company remains cost- efficient while maintaining flexibility and resilience.
BCG’s balance sheet optimization helps CFOs manage risk more effectively in order to increase net income. We’ve handled everything, including:
Our balance sheet management consulting team combines industry insights culled from extensive outside-in benchmarking (captured in a biannual treasury benchmarking survey) along with a library of levers and target-operating-model best practices, and proprietary tools and modelling solutions to transform portfolios and create more-resilient, strategic balance sheets.
A North American bank wanted to improve its P&L by optimizing its treasury while minimizing risk. We enhanced its interest-rate and liquidity-risk management, improved capital efficiency, and updated aspects of funds-transfer pricing to align with industry best practices and foster strategic growth. These actions are expected to add over $100 million annually to P&L in line with regulations, supervisory expectations, and peer practices.
A European bank needed to improve its asset and liability management operating model. BCG provided a comprehensive health check, helped redesign the company’s operating model, and assisted with program setup and implementation. As a result, the bank saw an approximate 4% increase in net interest income and roughly 1% return on equity across its balance sheet optimization levers.
A global payments provider went on a holistic transformation journey and chose BCG as its strategic partner. The treasury workstream, as one of many, focussed on realigning the company’s capital structure, reworking investment portfolio, overhauling interest rate risk management, and optimizing working capital. The balance sheet optimization plan alone is now contributing more than 10% net income improvement annually.
BCG helped establish the corporate treasury and finance functions for a leading energy company division in advance of its IPO. In addition, we developed a treasury operating model, internal regulations, and tools for autonomous management and created a financial services operating model and financial planning tools.
Despite the volatile interest rate environment, this year’s survey of bank treasury executives shows progress in balance sheet optimization, but operational improvements have stalled.
Companies can gain breathing room to operate under stressful conditions; withstand the scrutiny of shareholders, creditors, and regulators; and pursue market opportunities.
The status quo is no longer sustainable. With bank profitability under pressure, treasurers must improve efficiency, optimize financial resource management, and fast-track digitization.
Our team’s balance sheet management acumen stems from our vast experience in the risk management and compliance and corporate finance and strategy fields, our holistic approach to business transformation, and the strong relationships our team has developed over time with financial institutions, CFOs, and corporate treasury leaders. Here are some of our experts on the topic.
