Let's face it. Our banks could be a lot healthier. With a slump in business and the heavy weight of regulation to wield, more than a few banks have been ill-performing and suffering from various aches-and- pains-in-the back. And many have chosen to self-medicate with layoffs and cuts that are as addicting and healthy as fried food.
The top six lenders announced roughly 40,000 job cuts in the first six months of 2012. But increasingly, banks are choosing a better way to shape up, and through personal trainers or with their own strategic determination, they have come to realize and understand the benefits of a strong core. As every workout enthusiast knows, a strong core is essential to performing acts of strength and to prevent or reduce injuries.
Exercising a recovery
For too many banks, their cores have become weak and flabby, and though their first impulse was to shed weight in the form of jobs, more banks today are exercising a recovery from the slump they have suffered over the past two years with a new, proven method.
Recently, many bank executives have switched from the destructive habit of continually trimming staff from unprofitable or less profitable lines of business, to choosing to exit those lines entirely and instead concentrate on only profitable areas.
Investing in themselves
Today, many banks who are no longer investing in certain areas of business are fully investing—see growing and hiring--in what management perceives as an area of strength for the bank. While cutbacks continue, they are largely being limited to the fringe areas of each business.
Now, more and more banks have discovered their core strengths and are starting to concentrate on them specifically. As banks exit their non-profitable products and services, they will look to add strength their core, adding resources (jobs) to increase that profitability as needed.
In short, banks are taking one step back to get a running jump forward, and like any exercise program, there is some pain to make some gain. But a stronger core will enable more banks to profit, and grow, -- and hire.
Robert Namar is CEO of NAMARketing News, and a Wall Street veteran consulting for a number of financial services firms