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BRANCH PROFITABILITY
What is branch profitability in the context of retail banking?
Branch profitability refers to the net financial contribution made by a bank branch after accounting for all income earned and costs incurred, including interest income, fee income, operating expenses, and allocated overheads.
What is the primary objective of measuring branch profitability in retail banking?
To assess each branch's financial contribution to the bank's overall performance.
Which two major components constitute income for a retail bank branch?
The two major components are interest income (earned on loans and advances) and non-interest income or fee-based income (earned from services such as remittances, insurance, and third-party products).
What does the term 'cost centre' mean when applied to a bank branch?
A branch that incurs costs but is not measured on revenue generation independently.
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