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Global trend of the banking industry

Global trend of the banking industry. Group 4 Peter Wong Ho Yin Ken Leung Ngo Hang Kenny Cheung Kin Yan Frederick Ho Chu Fai. Overview. Global trend of banking industry Competition Prospects. Global trend of banking industry. 1. Globalization 2. Advanced Technology

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Global trend of the banking industry

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  1. Global trend of the banking industry Group 4 Peter Wong Ho Yin Ken Leung Ngo Hang Kenny Cheung Kin Yan Frederick Ho Chu Fai

  2. Overview • Global trend of banking industry • Competition • Prospects

  3. Global trend of banking industry 1. Globalization 2. Advanced Technology 3. Shareholder Value

  4. Global trend of banking industry Globalization • mean internationalization of the marketplace. • Competition between domestic and foreign E.g. China entry WTO, HSBC and HI • “ Big Bang” the Financial Services Act of 1986 in British market

  5. Global trend of banking industry Technology • Make the financial service borderless • Customer increase demanding • Winner under technology

  6. Global trend of banking industry Emphasis on shareholder value • Every critical business decision is from the value of shareholder

  7. CompetitionInvestment Banks vs Commercial Banks • Investment banking • Trading & principal investment • Asset management Investment Banks Commercial Banks

  8. Investment Bank - Profitability • Consecutively decreasing total revenue in recent 2 years • E.g. Goldman Sachs • Profit-making activities • Investment banking • Trading and principal investments • Asset management and securities services

  9. Goldman Sachs – Profitability

  10. Goldman Sachs – Profitability(cont) I. Investment banking

  11. Goldman Sachs – Profitability(cont) III. Asset management and securities services

  12. Goldman Sachs – Profitability(cont) • Characteristic • I. Investment banking revenue drops significantly: $5.37b drops to $3.84b drops to $2.83b • III. Asset management and securities services grows slightly $5.91b grows to $5.63b grows to $4.59b

  13. Commercial Bank - Profitability • Expanding into the businesses that was mainly done by investment banks • E.g. Bank of America • Having similar businesses as investment banks • Investment banking • Trading-related revenue • Asset management

  14. Bank of America – Profitability I. Investment banking

  15. Bank of America – Profitability(cont) • III. Asset management

  16. Bank of America – Profitability(cont) • Characteristic • I. Investment banking income only drops slightly compared to Goldman Sachs $1.53b drops to $1.48b • III. Asset management drops slightly $1.58b drops to $1.52b

  17. Prospects • Globalization - enter emerging markets & invest globally • Innovation CB – provide one-stop service IB – develop new kind of derivative in financial market

  18. ~Thank You~

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