Business diversification is an important pillar for American banks to maintain excellent performance in the economic recession. Prime bank gains profits from product innovation and reduces business losses. In terms of asset business innovation, JPMorgan Chase Bank securitized $7.9 billion of housing mortgage loans, $6 billion of credit card loans, $2.5 billion of automobile loans and $5.5 billion of industrial and commercial loans through loan securitization, and obtained $242 million and $422 million of pre-tax income respectively. In 2002, $7.2 billion of mortgage loans, $9.4 billion of credit card loans, $3.4 billion of automobile loans and $4.3 billion of industrial and commercial loans were securitized, with pre-tax income of $265.438+0.4 million, $45 million, $6 million and $53 million respectively. By selling loans, J.P. JPMorgan Chase Bank sold $45.8 billion and $62.2 billion in housing mortgage loans in 20001and 2002 respectively, with a profit of $26.2 billion and $38.8 billion respectively. Banking is excluded from the financial wholesale market. On the one hand, the scale of capital accumulation of industrial and commercial companies has increased, while the total amount of external financing has decreased. On the other hand, financial deregulation and the rapid development of the capital market. The direct financing cost of companies entering the capital market is relatively lower than in the past, which makes the amount of indirect financing from banks decrease. The emergence of high-income groups has also increased the demand for fast retail services. Therefore, the proportion of retail financial business has been rising.
The balance of global retail finance business of Citibank was $654.38+0.23 billion in 2000 (loan balance was $8.2 billion), $654.38+0.47 billion in 2006 (loan balance was $9.7 billion), $654.38+0.70 billion in 2002 (loan balance was $ 654.38+0.60).
Providing financial services for small businesses has become an important part of prime bank's business development strategy in the West, including providing banking services, credit card services, wealth management and insurance services for small businesses. Bank of America maintains business relations with nearly 2 million small business customers and has become the number one lending institution for small and medium-sized enterprises in nine States and five major markets in the United States. 200 1 year brought 585 million dollars of added value to shareholders. The company's annual income reaches 654.38+0 billion USD. This is mainly because: first, the difficulty of mixed operation is far greater than people's expectations. There are differences among commercial banks, investment banks and insurance companies in products, management and corporate culture, so the effect of mixed operation is not easy to achieve; Second, in recent years, the international economy has grown at a low speed, financial market volatility has increased, and the living environment of banks has deteriorated. The primary goal of banks is survival, not expansion. Therefore, it is urgent for banks to strengthen risk control and cut costs.
In 2002, the investment banking operating rate of J.P. JPMorgan Chase Bank decreased by 25% compared with the same period of last year. Decrease in operating income15%; Operating income was only $6543.8 +0.4 billion, which was 53% lower than that of 5438+0 in 2006. Among them, the decline of brokerage and investment service income is more moderate. The investment balance of Citibank in 2000, 2006.5438+0 and 20 02 was $88.222 billion, $654.38+97.2 million and $654.38+40.2 million respectively. In 2002, although the income of corporate and investment finance business of Citigroup decreased by 30%, the net income of global investment management business increased by 14%. The net income of transactional services also increased from $654.38+$73 million to $526.5438+$00 million; Net income of Citi's private financial sector
Since 1999, it has increased by 69% to reach $456 million. This is mainly due to Citigroup's diversification of products and regions as the core of its business model, which can effectively resist external shocks. Deutsche Bank's investment banking income generally shows a downward trend. From 2000 to 2002, its trust commission and handling fee income were 39.08 billion euros, 35.37 billion yuan and 397 billion yuan respectively. The proceeds from securities issuance, brokerage fees and rising securities prices were 565.438+0.7 billion euros, 45.57 billion euros and 43.65438+0.9 billion euros respectively. The net income from insurance business was 28.37 billion euros, 27,654.38+700 million euros and 7.44 billion euros.
It is quite common for foreign banks to seize the banking market in Czech Republic, Hungary, Poland, Romania, Slovakia and other eastern European countries. According to the latest survey of Austrian Credit Bank, according to the statistics of total assets and liabilities, multinational banks have controlled 62% of the banking market in Eastern Europe through a series of activities such as mergers and acquisitions. Citibank, Belgian KBC Bank and Austrian Bank, it was during this period that Italian credit banks flooded into the Eastern European market. Judging from the current situation, the development prospects of international big banks in Eastern Europe are quite attractive, and the banking market in Eastern European countries has great business opportunities and potential. However, the second wave of restructuring may also occur in Eastern Europe in the near future.
In the past 25 years, the merger and acquisition of the banking industry has been the main line of the development of the American banking industry. 199 after the climax of American banking mergers and acquisitions, it entered a dormant period from 1999 to mid-2003. However, the recent acquisition of American banks has caused the industry to rethink the trend of M&A in American banks. It is judged that the trend of merger and reorganization of American banking industry may rise again: First, the American banking industry is still in a state of saturation. Second, the capital surplus of American banking industry, the intensified competition in the industry and the need to reduce expenses have all become the main driving factors of American banking M&A activities. In addition, the market response to large-scale M&A transactions is increasingly positive (the merger of First Union/Victoria is gradually recognized by investors), the share price of American banks has risen in the past few months, and a large number of M&A demands have accumulated in the past five years. In the past three years, past acquisitions have been basically digested. Facing the pressure of market environment and industry competition, prime bank International is carefully examining every business model-bank insurance, universal banking, product-oriented retail banking or global wholesale banking, in order to seek new strategies to get rid of the predicament. In 1990s, many large banks developed diversified businesses, including investment banking, private banking, asset management and electronic banking. Cross-selling insurance and investment banking products has become a full-service financial enterprise. At present, this trend seems to have signs of reversal. In the future, it is more likely that the centralized and selective development of core business will become the mainstream, and banks will operate non-core business in the form of decomposition, outsourcing, joint venture and partnership to achieve differentiated development. This is because when the business environment is good, banks that provide full services are more attractive, but when it is difficult to make profits, the operating costs of banks are relatively high, and investors require banks to adopt new strategies to increase profits. In addition, the development of technology has greatly increased the possibility of bank splitting business. Banks can choose to become product manufacturers, such as designing mortgages and small business loans, or become distributors of important customer relationships.
European banks first strengthen business restructuring, concentrate on developing core businesses with strong competitiveness, and give full play to synergistic benefits and comparative advantages. Dresden Bank of Germany reorganized its global capital market business and merged its bond and stock business into one department, so that its product experts can promote the stock and bond business at the same time and strive for more corporate financing business. At the same time, we will combine derivative marketing with tax products to make quantitative analysis and produce synergistic benefits. German commercial banks will combine capital market with commercial credit business, cut unprofitable business and cost, and concentrate their investment banking business on distributing high-yield derivative products and structured products to enterprises and retail customers, which will play a role in German enterprise restructuring. At the same time, after the bankruptcy tide swept through Germany, we should rethink the relationship between banks and corporate customers, and plan to transform investment banking into a risk platform intermediary between corporate customers and institutional investors, hedge funds and retail investors, providing multi-level products and value-added services, not just cheap funds. Barclays Bank, Rice Bank and HSBC Bank in the United Kingdom cooperated with U-nisy Technical Service Company to establish IPSL bill clearing company.
Handle checks. IPSL clears cheques not only for other owners, but also for other banks. It is estimated that it will handle 70%-80% of cheques in the UK. This means that on the one hand, banks will split non-core businesses to reduce costs, on the other hand, they will set up new companies to deal with these non-core businesses in a cooperative and joint venture way; Banks with new companies can share technology costs, gain economies of scale and greatly reduce management costs. Deutsche Bank, Dresden Bank and Commerzbank merged their mortgage business to form a new company, Euro-hypo, whose business objectives are similar to IPSL in Britain.
Some big banks, such as Credit Suisse, have considered selling their investment banking business. After the British Barclays Bank gave up its stock business, its Barclays Capital has focused on the bond market, and the expansion of the credit market share shows that this model has worked. Deutsche Bank decided to sell its custody business and passive asset management business. Core deposits and active liabilities account for about 90% of the bank's funding sources. The remaining 65,438+00% of the capital comes from the equity capital of the bank. In 2006, the core deposits of Citibank increased by 20%, 5438+0, and in 2002, it increased by 14% compared with 2006, showing double-digit growth continuously. Active liabilities increased by 14% in 2006 and 5438+0 in 20 00, but only increased by 3% and 5438+0 in 2002, and the growth rate suddenly dropped from 14% in the previous year to 3%, with great changes. J.P. JPMorgan Chase Bank's core deposit in 2006 was 5438+0 compared with 2000. 200 1, active liabilities decreased by 8.9% compared with 2000, and increased by 200 1 4.9% compared with 2002. Bank of America's core deposits increased by 1. 1% compared with 2000. In 200 1 year, the active liabilities decreased by 14.9% and increased by 24% compared with 200 1 year. Active liabilities show double-digit growth continuously.
Long-term and short-term interest rates have repeatedly fallen to historical lows, reducing the cost of holding highly liquid deposits and increasing the proportion of such deposits, thus reducing the interest cost of banks; The decline of long-term interest rate increases the market value of securities held by banks; However, the decline of long-term interest rate is less than that of short-term interest rate, which leads to the expansion of long-term and short-term spreads and has a positive effect on bank profits. Judging from the situation of major banks in the first half of 2003, some banks' funds without interest cost still increased substantially. In 2002, the overall loans of American banks to industry and commerce decreased by 7.3%, and this trend did not change much in some big banks in 2003. Among the six major banks, from 2000 to 2003, the corporate loans of Citibank Group and the industrial and commercial loans of Bank of America were average.
In the second quarter of 2003, corporate or commercial loans of J.P. JPMorgan Chase Bank and Wells Fargo Bank increased, but the range was only between 2% and 3%. The Federal Reserve's credit survey shows that in recent years, banks have tightened industrial and commercial loans to a certain extent, and the demand for industrial and commercial loans by enterprises has also decreased, which constitutes a decline in industrial and commercial loans.
However, consumer loans of major banks are on the rise. For example, Citibank's consumer loans rose rapidly, increasing by 65,438+065,438+0.3% in 2000 and 65,438+03.2% in 2002, compared with 2006,5438+0. Consumer loans from banks in JPMorgan Chase also increased.
The continuous low market interest rate not only promotes the refinancing activities of the housing market and even mortgage loans, but also creates conditions for enterprises to issue debt financing. Grasping this change in market environment, Bank of America strives for corporate bond-issuing related business. JPMorgan Chase, who is better at investment banking and capital business, increased his income by issuing bonds after the contraction of M&A business, and Citigroup's trading and underwriting of fixed-rate instruments set a record in the second quarter of 2003. Bank of America, which specializes in retail or personal banking, also achieved the best investment banking performance in the second quarter of 2003. Although the related income only increased by 5%, the main driving force came from the issuance of securities and debts. With the strong growth of fixed interest rate instruments, the capital market business of First Bank reached a record high level in the second quarter of 2003.