Regulatory obligation, strategic sense
Since the 2023 MaRisk amendment, business model analysis has been mandatory for regional banks. It was established back in 2014 by the SREP guidelines as part of supervisory evaluations. BaFin and the Bundesbank have made it an audit focus up until 2027. The analysis is therefore not a voluntary tool, but a regulatory requirement. At the same time, it offers real strategic added value: it helps to identify opportunities, mitigate risks and make fact-based decisions.
Structured analysis with a clear objective
Business model analysis comprises several stages. First, the strategy, regional focus and business segments are examined. This is followed by an analysis of the business environment, competition monitoring and macroeconomic assessments. In a quantitative analysis, profitability, balance sheet structure and capitalization are evaluated. This is supplemented by a qualitative consideration of the organization and its dependencies. Finally, the financial plan and the strategy’s long-term economic viability are assessed.
Focus on profitability and future viability
A key objective is to determine whether the business model delivers acceptable returns. The decisive factor is the ratio of return on equity (ROE) to cost of equity (COE). If the ROE is lower than the COE in the long term, there is a structural need for action. Business segment analyses show where capital is being used efficiently and where there is potential to be leveraged. Medium-term planning combines strategy and economic feasibility. This makes business model analysis an effective management tool for viable bank management.
This article is an abstract of our article in “Bankinformation” magazine, issue 52/2025 (in German). Would you like to learn more on this topic?
