Citibank Indonesia - Case Study
According to the case study, Mr. Mistri is not new to the banking industry, he has been part of the organization for many years, and also has proved to be a successful executive in his current and prior roles. The budget submitted by Mr. Mistri was a reflection of his concerns about the risk return ratio of his branch, which is the return in terms of risk for a specific time period, oil prices decreasing based on the recession Indonesia is going through, and the high staff turnover, a situation that he also considers a serious constraint to the growth of the branch.
Raising a budget when your corporate office requires revision of the original is not an ...view middle of the document...
It included some growth in revenue and a slight drop in profit. According to the experience and background of Mr. Mistri, his situation should be re-evaluated and trust the reasons why he submitted his original budget. He is the expert in that market, and he should communicate to both his direct boss and to the corporate office, the risks that involve in increasing the budget in a country going through a recession, his concern about the risk-return ratio, and the lack of human resources in his branch. Even taking in to account the politics and the risk of saying no to the corporate office, upper management should hear his concerns, considering Mr. Mistri’s background and long-term career at Citibank.
In a situation where Mr. Mistri has no other way other than increasing his budget, he should be very clear with upper management about the risk involved and the consequences this request might have.
Mr. Mistri could stop or reduce the bank’s participation in loans to the government and private companies, since these loans provide a much lower return and that money can be best put to use in some other accounts of the portfolio. But this scenario might bring significant consequences in terms of relations with the government and companies in Indonesia. At the same time he could also increase the total amount of money lent in Indonesia, with all the increase going to big commercial companies. But Mr. Mistri is aware of the conditions of the Indonesian economy...