Part B. 1. Introduction the problem:. Running profitabl

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Part B1
1. Introduction the problem:Running profitably is quite challenging for the organizations which operate in the bankingindustry. The banking industry is highly competitive in nature and so, the organizations in thisindustry face a number of challenges to remain profitable. Standard Chartered Bank (SCB), oneof the major players in the banking industry, is also facing issues to maintain its cost to incomeratio. The cost-to-income ratio is one of the major indicators of profitability. However, in HongKong, SCB is found to have the highest cost-to-income ratio among the locally operated banks.In the recent years, the Cost to Income ratio of the bank has increase by 5.2% in a year (Lestari,2018). If the ratio increases continuously, the Standard Chartered Bank can lose its profitabilityand the competitiveness in Hong Kong market. The current research deals with analysis of theissues faced by SCB because of the rising rate of cost to income ratio. The research includesdiscussion on the relevant theories and identification of the ways to mitigate the problems forSCB.2. Review the financial literature:The cost to income ratio or theC/I ratio indicates the ratio between the cost of running thebusiness to the cost of operating income. The C/I ratio is one of the key financial measures whichare used for evaluating the financial performance of banks (Rasika & Sampath, 2015). From thecost to income ratio, the investors of an organization can understand how efficiently the firm isoperating. A rise in the C/I ratio indicates that the cost of running the organization is alsoincreasing. In other words , increase in the C/I ratio indicates that the organization is running lessefficiently. So, the increase in the C/I ratio can make the business less attractive to the investors.As result, the firm can face severe funding problems in future if the issues associated with higherC/I ratio are not managed effectively.3. Explain the methodology used to address to the problem:In this research, literature review is done to identify the ways for addressing the problemassociated with higher C/I rate. The C/I ratio of the banks can be reduced in several ways. Optingfor the IT based applications is one of the techniques to reduce the operating cost of the banking2
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