Instructions for the Commercial Banking team @ Sunset Bank

You are a member of the Commercial Banking team at Sunset Bank, an important Bank from
Snowdonia. The main responsibility of the Commercial Banking Department is to provide their
clients with products and services such as: cash management, credit lines, payroll services and
portfolio management.

Sunset Bank has established its reputation as a commercial bank with a big network of agencies
spread all over the country. Most of the profits come from this fact. Although all these banking
services provide gains, Sunset Bank´s CEO has committed to strengthen the Corporate Finance
department. The combination of both, Commercial Banking and Corporate Finance Departments
business will give an advantage to Sunset Bank in Snowdonia.

You have a commercial banking team. All of them work with various clients at once. Their success
comes from the good relationships they keep with clients and how skilled they are to attend them.
Other banks have similar products and rates that is the reason why it is key on this business to
have a premium customer service. Generally, the first contact with clients is the company´s
treasurer or the Financial Director.

Although there is collaboration in between Corporate Finance and Commercial Banking, current
relations between both departments are not at its peak. Corporate Finance staff is struggling to
develop new clients and do whatever is needed to have new contacts. At first glance, you are
willing to help, but the corporate finance staff´s aggressive attitude and their short-term
relationship focus has bothered some customers. Therefore, you prefer to introduce them in low
risk situations. Most of the Corporate Finance staff come from other banks and their behavior
seems individualistic and not very oriented to team work. You have tried to help, but their stances
seem to be very rigid.

It is important to underscore that Corporate Finance staff receive big bonuses, which in some
cases are three times their salary and they love that everyone knows about this. Within
Commercial Banking, incentives are oriented to keep long-term relationships with your clients and
only 30% of your total compensation is provided through a bonus.

Just recently, collaboration in between Commercial Banking and Corporate Finance was possible in
order to achieve an important transaction for STH STEEL. This is one of the most important
companies in the country and a bank´s key account for more than 20 years.

This business chance was possible when the account executive met with STH STEEL treasurer
about other banking services available. Later, a meeting with STH STEEL Finance Director took
place and you invited a Corporate Finance specialist. You all closed a successful operation.

When the Bank´s CEO knew about the operation and how both departments worked together, he
said that there was going to be a special bonus of US$ 100,000 Dollars and said: Both
departments need to decide what is going to be the mechanism on how to better divide the
bonus. IF they do not come to a final solution, I will add this amount to the bonus to be divvy-up
among all bank´s employees.
Some members of your team, anticipating a meeting with the Corporate Finance department, met
and after a furious debate conclude that a 70/30 (70% for Commercial Banking, of course) would
be fair. After all, if it were not for the long term relationship with STH STEEL this business could not
be possible. You were not only a connecting point in between STH STEEL and Corporate Finance
but also participated in meetings and provided new ideas.

You did not only participate in long meetings, but also helped STH STEEL staff to obtain and
prepare all information needed and requested by Corporate Finance as well as fix any damage
created by the aggressive style of Corporate Finance staff. Many members of your staff dedicated
in between 30% - 50% of their time in a 2-month period. You had to postpone your own
responsibilities and you are still catching up. In fact, you had to do a big part of the Corporate
Finance work to keep you client satisfied.

Although you think that an 80/20 (80% for your team) division would be ok, this will imply that
Corporate Finance did not do well and complicate the already difficult relations with them. Also
you have to keep in mind that either you like it or not, you will have to work with Corporate
Finance staff in the near future and if you step back now, they will take advantage for future
negotiations. There are no previous experiences about dividing bonuses among departments,
hence this experience will create an important milestone for the future. It is important to send a
clear message.