King
Chapter 1141 - 1141 176 Cash Crunch_3

1141: Chapter 176: Cash Crunch_3 1141: Chapter 176: Cash Crunch_3 “The Capital Branch and Mountain Domain Branch operations still need further expansion to serve as an important foundation for the bank to combat risks.

The situation in the Snow Moon Territory is special, completely free from the lack of loan clients, and the focus of subsequent work should be on attracting deposits.

The Near East is a funding black hole, capable of swallowing any amount of money.

The loans we’ve issued so far can only count as a trial run.

As the domains develop, the funding gaps these Noble Lords face will only grow larger.

Even if we were to offer a credit line of ten million Gold Coins, it would be quickly swept up by the exterior Nobles.

At present, the bank’s capital turnover is not high enough.

Our data indicates that for every Ten Thousand Gold Coins loaned out, six thousand Gold Coins will be withdrawn within a month.

We must increase more ancillary services to bring down this withdrawal ratio, ideally below 30%.

As long as the Gold Coins are piling up in the treasury, we need not fear a run on the bank, and our business can continue to expand.

The Government Affairs Department should cooperate and, when necessary, can introduce subtle favorable policies to guide smugglers to deposit their money in the bank.

In the future, the domain’s tax revenues and budget balances should also be transferred directly through the bank.

This includes the payment of government project funds, which can be made via bank transfer or using Gold Tickets, allowing them to withdraw the funds from the bank themselves.

For individual accounts, the daily withdrawal limit is Five thousand Gold Coins; for large withdrawals exceeding Fifty thousand Gold Coins, reservations should be made five days in advance; for giant withdrawals over two hundred thousand Gold Coins, a month’s notice is required; and for withdrawals of more than one hundred Gold Coins, a three-month notice is necessary.

Rudolf, your task is significant.

Besides ensuring the normal operation of the bank, you must also do everything possible to maximize the bank’s performance.

This year, our target for gross margin on the books is Five Hundred thousand Gold Coins, with a target net profit of Two Hundred thousand Gold Coins,” Hudson instructed with an unchanging expression.

His demands were not randomly made.

The bank, as an emerging industry, is enjoying substantial advantages of the era.

Besides a leading business model, the key is the absence of taxation.

Both the Mountain Domain and Snow Moon Territory fall under Hudson’s jurisdiction, and whether to levy taxes is entirely at his discretion.

For the Capital Branch, outsiders do not understand just how profitable a bank can be.

Moreover, with multiple branches operating in tandem, it’s unclear how to allocate the profits.

If it were a common person’s business, perhaps taxing it would suffice.

However, as the industry of Hudson, the Kingdom Marshal, and under the pretense of raising funds for the development of the Near East, the Royal Capital Tax Department dares not make a rash move.

After all, loans that are disbursed don’t equal profit.

It’s only when they are repaid that they become profitable.

This long-term, high-risk business model associated with the Near East makes it impossible for outsiders to understand if money can be made.

Currently, only three branches have been established, mainly due to a scarcity of talent.

If enough staff were available, Hudson wouldn’t mind setting up branches in every major city of the Kingdom.

“Your Grace, to increase the bank’s book profits is simple, just increase the loan issuance quota.

However, aggressively attracting deposits is somewhat challenging.

It’s not that the smugglers aren’t cooperating, but rather they lack enough cash in hand.

In the last war, the Orc Empire didn’t loot enough wealth.

In trade with the Kingdom, their currency has continuously been in a state of outflow.

Reliance on the output of mines alone is insufficient to fill this gap.

Now, the Orc Empire has reverted to the traditional era of bartering.

Smugglers return laden with goods, but what they acquire are actual goods which then need to be transported back to the Kingdom for sale.

According to our observations, many commodity prices within the Kingdom have recently dropped to various extents, especially the specialty goods of the Orc Empire, which have seen particularly steep price falls.

Especially in the last two months, numerous smuggling caravans have returned with cattle, sheep, and horses.

In the past, they disdained the selling of such low-profit goods.”

As Rudolf finished speaking, Jacob added,

“Your Grace, Rudolf is correct.

The economy of the Orc Empire is indeed encountering problems.

Years of constant warfare have exhausted this ancient empire.

If the current situation continues, the outlook for future trade seems pessimistic.

Smugglers selling livestock is essentially due to our efforts to develop animal husbandry, aggressively purchasing livestock in the market.

The troubles are not only for the Orc Empire but also for the Kingdom.

As data collected by the Government Affairs Department suggests, the Kingdom’s economy is facing problems too.

In trade with southern countries, the Kingdom is also at a disadvantage.

With the aftereffects of war and the need to repay international debts, the Kingdom has paid a significant amount of gold and silver to various countries.

The rapid decline in prices after the war may not only be due to changes in supply and demand but also a shortage of circulating gold and silver in the market.

This is demonstrated in various places.

As a newly developed area, the Snow Moon Territory has shown more obvious symptoms.

The crisis has not erupted largely because of the emergence of the Near East Development Bank.

Whether it’s through transfer transactions or the Gold Tickets we’ve issued, they’ve somewhat served the function of currency.

However, this is limited to New Moon Port, and in some remote Noble territories of the Kingdom, the ancient barter system has also reemerged.

Similar currency shortage crises have frequently occurred in the history of the Kingdom.

Almost after every invasion by the Orcs, such a situation would follow.”

On hearing “currency shortage crisis,” Hudson’s brow instantly furrowed.

He had sensed this issue faintly after the last Orc invasion.

However, the situation wasn’t as serious as it is now.

Even if the Kingdom had to repay a huge foreign debt, it wasn’t a one-time payment.

What should have been an era of recovery was again struck by continental warfare.

The astronomical cost of strategic materials once again led to a massive outflow of the Kingdom’s wealth.

After the war ended, the crisis began to slowly brew.

The smuggling trade with the Orc Empire had to some extent slowed the Kingdom’s currency shortage crisis.

With the commencement of the Near East development strategy, vast sums of money were swallowed up by the Near East Land, and the “currency shortage” crisis approached the Kingdom again.