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Maybe he meant that the building itself and the land it was on, rather than the business of the branch, was the asset.
by debacle 11y ago
Maybe he meant that the building itself and the land it was on, rather than the business of the branch, was the asset.
- roymurdock 11y agoIf the branch is on valuable enough land it will show up on the bank's balance sheet as an appreciating asset with a net gain in value even after subtracting out wages, depreciation, amortization, taxes, etc.
- yourapostasy 11y agoI thought of that possibility, and discounted it while posting, because I thought the bank would make more ROI, and have more loanable reserves under that assertion, if it straight commercially leased the space instead of putting a branch on it. Or land banking the land instead of putting a relatively specific-purpose improvement on the land. Branch buildings in the US commonly have drive-thrus, which are not easily re-purposed for other kinds of businesses, thus subtracting some profitability on the back end of the land banking for demolition or modifications. I'm not in the business or anywhere close to that kind of business though, so I'm hoping someone familiar with what goes into these branch building decisions pipes up here.