Publications
Publications
- October 1990
- HBS Case Collection
Manufacturers Hanover Corp.: Customer Profitability Report
By: Robert S. Kaplan
Abstract
Banking company noting declining profitability from its traditional lending activities has started to measure the total profitability of its lending relationships. A loan pricing model estimates the profit and return-on-equity from commercial loans. Additional work was required to recognize the revenue from fee-for-service business for the same customer that is performed by other units in the bank. The case raises the problem of how revenues and expenses from diverse activities can be combined to produce an accurate picture of customer profitability.
Keywords
Investment Return; Revenue; Commercial Banking; Banks and Banking; Customer Value and Value Chain; Banking Industry
Citation
Kaplan, Robert S. "Manufacturers Hanover Corp.: Customer Profitability Report." Harvard Business School Case 191-068, October 1990.