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Know What Every Branch Really Contributes.
Branch Value Analysis (BVA) measures the economic contribution of each branch by separating the value of business originated from the value of relationships serviced, then applying branch-specific operating costs without duplicating costs already embedded in the underlying product economics.
Branch Profitability Is Often an Accounting View of Geography
A customer or member relationship may be originated at one location, serviced at another, and supported across multiple channels. When all revenue and cost are assigned to a single branch code, management can easily misread the role and value of the branch.
Origination is different from servicing
A branch that creates valuable new business should receive credit for creating that economic value, even when the relationship is later serviced elsewhere.
Servicing creates measurable value
A branch can support important relationships without being the point of origination. BVA recognizes that contribution based on actual servicing activity.
Cost must be applied carefully
Direct origination and servicing costs already reflected in MVA economics should not be charged again. BVA applies only the residual branch-specific operating cost needed to evaluate the location as an economic unit.
Branch Value Starts with MVA Economics
MVA determines what each loan, deposit, and relationship is economically worth. BVA then determines which branch should receive credit for creating or supporting that value.
Measure Economic Value
Multidimensional Value Analysis (MVA) determines the economic contribution of individual loans, deposits, and relationships using instrument-level economics rather than simple accounting averages.
Assign Origination Value
The branch that creates a loan, deposit, or other balance-sheet relationship receives credit for the economic value created at origination.
Recognize Servicing Value
Ongoing relationship value follows actual servicing activity. When multiple branches support the same relationship, servicing value is divided according to their relative share of measured branch interactions.
Measure Net Branch Contribution
Residual branch-specific operating costs are applied after origination and servicing value have been attributed, avoiding double counting of direct costs already reflected in MVA economics.
How Servicing Value Is Attributed
Servicing value follows the location performing the servicing activity rather than automatically remaining with the branch that originated the account. If one branch performs all measured servicing activity, it receives all of the associated servicing value. If several branches support the relationship, the value is divided according to their relative transaction activity.
This prevents duplicated credit and recognizes that ongoing relationship support can occur in a different location from the original sale.
See Branches for What They Actually Do
BVA changes the management question from “What revenue and expense are booked to this location?” to “What economic value did this location actually create or support?”
| Traditional View | Branch Value Analysis |
|---|---|
| Accounts are assigned to a single branch. | Economic value follows origination and servicing behavior. |
| Volume is often treated as success. | Economic contribution distinguishes valuable growth from low-value activity. |
| Servicing branches can look unproductive. | Locations supporting relationships receive economic recognition for the work they perform. |
| Allocated overhead can dominate the result. | Direct economics are preserved and residual branch-specific operating costs are applied without double counting. |
| Branch decisions are driven by accounting profitability. | Branch decisions are grounded in instrument- and relationship-level economic contribution. |
What BVA Measures
The result is a branch-level view that combines activity and economic value, allowing management to distinguish a busy branch from a valuable branch.
Business Creation
Loans and deposits originated, origination economic contribution, and the quality of business created.
Relationship Support
Transactions processed, relationships serviced, and servicing economic contribution attributed to actual branch activity.
Net Contribution
Branch economic value before residual overhead and net branch contribution after branch-specific operating costs.
Built for Executive Decisions
Understand strategic network value
See which locations create valuable new relationships, which support existing ones, and where the branch network contributes to enterprise value.
Move beyond allocated branch P&Ls
Connect branch performance directly to instrument- and relationship-level economics while avoiding duplicate cost attribution.
Align resources with value
Identify where business is created, where relationships are serviced, and where staffing, capacity, or footprint decisions deserve attention.
Better Branch Decisions Require Better Economics
BVA supports branch investment, staffing, consolidation, expansion, performance management, and distribution strategy without reducing every location to a simplistic allocated P&L.
The Kohl Difference
MVA determines where economic value exists. Branch Value Analysis determines which locations create and support that value, then applies the residual branch-specific operating costs required to evaluate the location. The result is a branch management view designed for decision-making, not just reporting.
Turn Branch Reporting into a Management Tool.
If your current branch profitability reporting cannot distinguish business creation from relationship servicing, it may be measuring the wrong thing.
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