Reading a Branch Performance Table
You are given the following branch data for two quarters (all amounts in PKR millions).
| Item | Q1 | Q2 |
|---|---|---|
| Cash deposits | 1,200 | 1,380 |
| Cash withdrawals | 980 | 1,150 |
| Demand drafts issued | 320 | 300 |
| Cheques paid | 610 | 655 |
| New accounts opened | 420 | 504 |
| Staff count | 14 | 15 |
Branch targets for Q2 were: deposits growth of 12% over Q1, withdrawals growth no more than 15%, and new accounts growth of 15%. The branch manager claims the branch 'comfortably beat every target'. You must verify the claim and advise on the cash position.
1. Compute the growth rates and test the manager's claim against each target.
Read the worked answer
Growth rates (Q2 vs Q1).
- Cash deposits: (1,380 − 1,200) / 1,200 = 180/1,200 = 15.0% vs target 12% → beat by 3 points.
- Cash withdrawals: (1,150 − 980) / 980 = 170/980 = 17.35% vs ceiling 15% → exceeded the ceiling, a breach.
- New accounts: (504 − 420) / 420 = 84/420 = 20.0% vs target 15% → beat by 5 points.
- Demand drafts issued: (300 − 320)/320 = −6.25%, a decline.
- Cheques paid: (655 − 610)/610 = 7.38% growth.
Verdict. The claim is false. Deposits and new accounts beat target, but withdrawals breached the 15% ceiling by 2.35 percentage points, and demand drafts fell. 'Comfortably beat every target' is not supported by the data.
Note on interpretation. Deposit growth of 15% is gross inflow, not net; the branch must be judged on net cash retention, not on gross deposits alone.
2. Assess the branch's net cash position and per-staff productivity, and recommend two actions.
Read the worked answer
Net cash position. Q1: deposits − withdrawals = 1,200 − 980 = PKR 220m net inflow. Q2: 1,380 − 1,150 = PKR 230m net inflow. Net inflow grew by only (230 − 220)/220 = 4.55%, far below the 15% gross deposit growth, because withdrawals grew faster than deposits. The branch is attracting more money but also paying more out, so its vault and liquidity planning must absorb larger swings.
Per-staff productivity. Q1: 420/14 = 30 new accounts per staff member. Q2: 504/15 = 33.6 per staff member, an improvement of 12%, so the extra hire paid for itself on this measure. Deposit mobilisation per staff: Q1 1,200/14 = PKR 85.7m; Q2 1,380/15 = PKR 92.0m, up 7.3%.
Recommendations.
- Investigate why withdrawals rose 17.35% - a single large corporate customer or a seasonal pattern could explain it; if structural, adjust the vault cash plan and replenishment schedule.
- Review the demand-draft decline of 6.25% and set a recovery plan, since fee income is being lost while costs rise with the extra staff member. Also re-baseline the withdrawal ceiling so the branch is measured on net retention, not gross inflow.