Global Banking Industry

Global Banking Industry

Foreign banks in india Upcoming foreign banks in india

 ABN-AMRO Bank  Abu Dhabi Commercial Bank  Bank of Ceylon  BNP Paribas Bank  Citi Bank  China Trust Commercial Bank  Deutsche Bank  HSBC  JPMorgan Chase Bank  Standard Chartered Bank  Scotia Bank  Taib Bank

Royal Bank of Scotland Switzerland's UBS US-based GE Capital Credit Suisse Group Industrial and Commercial

Bank of China

What is Bank Today? The current banking scenario is greatly different from the

past. Only 15 to 20 years ago, most Western banks generated

90% of revenue from interest income. Now this percentage has fallen to 60%, sometimes as low as 40%. the concept of banking is being modified and the traditional

barriers among financial service sub industries (retail banking, private banking, investment banking, asset management, insurance, etc.) are vanished.

GLOBAL BANKING The common trends resulted in pace of dramatic change for banking are: The focus of banking is shifting from transactions management toward sales of financial products. Barriers to entry for the retail banking segment are being lowered. The growing variety of delivery channels for banking enables new entrants to thrive.

Challenges facing by global banking Credit Crisis Hedge fund Money-laundering

Factors affecting global banking industry

• The technological breakthrough caused by the eruption of e-banking and e-finance. • Worldwide consolidation and consequent restructuring. • Increasing competition in terms of both markets and products. • “Contamination” among different industries. 

Factors affecting global banking industry

A slowing population growth and increasing

average life expectancy and per capita income. The growing importance of a clear strategic intent in the banking industry. New competitors are entering the financial service business. Consolidation.

CONSOLIDATION Consolidations take place for the following reasons: To take advantage of economies of scale. eg:-the merger between the Swiss banks UBS and SBC creating one of the largest banks in the world. To have access to distribution channels. To widen the range of products that the bank can offer both actual and potential clients. eg.:-between Citibank and Travelers, has originated Citigroup. To enter a new geographic market.

Highlights of Global crisis In October 2007 major failures start to appear

in the world’s financial industry, Swiss banking giant UBS bank has announced losses $3.4bn from investments linked to sub-prime. Following, American banking giant Citigroup posted a sub-prime loss of $40bn. US investment bank Merrill Lynch revealed a $7.9bn disclosure to bad debt. After failing to search for a potential buyer, Lehman Brothers becoming the first major US investment bank to collapse since beginning of the credit crisis.

Aftermath of global crisis IMF warns that world economy development

could decline to its lowest point ever since World War II to just 0.5% this year. In USA the interest rate has been cut hugely by the Federal Reserve from the 5.25% to 0.25%. In UK pound was at a 23-year low against the dollar. The Bank of England has cut interest rates to a record low of 1% -the lowest level in its 315year history.

Stimulus Packages across the Globe....

The US Congress passed a stimulus package

worth $ 838 billion, aimed at creating millions of new jobs and steering the economy out of the recession. China announced a huge economic stimulus package of an estimated $586 billion. Japan announced $100bn to curb recession. Germany announced $63bn.

Major bailouts of global bank In the biggest banking bail-out in American history, mortgage companies ‘Fannie Mae’ and ‘Freddie Mac’ have been ‘nationalised’ by the US federal government. This has transferred a staggering $5 trillion of

mortgage debt from private to public hands. Nationalisation of Northern Rock, in Britain, involved taking over £100 billion of loans.

Major bailouts in banking Bank of America buy Merrill Lynch in an all-

stock deal worth $50 billion. Stricken Beligian-Dutch bank Fortis was bailed out by the governments of Holland, Belgium and Luxembourg to the tune of €11.2bn (£8.9bn). Iceland nationalises Glitnir bank. The government bought 75% stake in the bank for 600m euros .