Money Machine

Chapter 15Bank Repairman

The Strategy and Policy Committee (SPC) made some major decisions to overhaul the operation of the bank, from key personnel changes to the system to deal with nonperforming loan problems. But I still felt that much more needed to be done to right this ship. My colleagues agreed. We needed more changes, and we needed them faster than Jeff Williams was delivering. I wrote to him on April 9 summarizing a long list of immediate and major issues as I saw them:

Now that we have revamped the management for our branch network and have put the members of the policy committee in charge of retail, corporate banking, and branches, we have a much more stable organization. It seems that these changes have significantly lifted the morale of our staff throughout the bank. With the replacement of the Beijing branch manager next week, we will have dropped the other shoe for our branches, by and large, which will also remove any concerns in the minds of those branch managers largely unaffected by the revamp.

The first‐quarter results show that we have outperformed the plan for P&L [profit and loss], but we have significantly underperformed the plan for the balance sheet which shrank with both loans and deposits short of plan by about 4 billion yuan. This, coupled with the replacement of 3 billion yuan or so by the more expensive postal deposits, will have a severe effect on net interest income in the quarters ahead unless we can replenish the lost deposits and grow the ...