Banks & Credit Unions
Brief Excerpt from Industry Overview Chapter:
Companies in this industry accept deposits and make commercial, industrial, and consumer loans. Major companies include Bank of America, Citibank, JPMorgan Chase, Navy Federal Credit Union, and Wells Fargo (all based in the US), as well as Banco Santander (Spain), China Construction Bank and Industrial and Commercial Bank of China (both based in China), and HSBC Holdings (UK).COMPETITIVE LANDSCAPE
Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of individual banks depends on marketing skills, efficient operations, and good risk management. Large economies of scale exist in some segments of the industry, which has encouraged industry consolidation. While smaller banks and credit unions can compete successfully in segments where customer service or knowledge of the local market is more important, big banks are becoming increasingly dominant.PRODUCTS, OPERATIONS & TECHNOLOGY
Banks generate revenue from loans to non-financial businesses, which account for more than 40% industry revenue, followed by residential mortgage loans (about 20%). Other services include products supporting financial services (about 15%), loans to financial businesses (more than 10%), secured or guaranteed home loans (10%), trading securities and commodity contracts (10%).
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