The Implications Of Bank Specialization On Its Financial Statement Analysis

Financial statements for banks have uniquely different analytical problem than statements for manufacturing, service and most companies in general. Therefore this analysis of JPMorgan and Chase 's financial statements requires a different approach in order to recognize the banks worth as an investment.

The main goal of the 4 banks is to increase their tangible book value and earnings per share by increasing Net Interest Margin (NIM) via organic growth. There appears to be significant difference in the geographical locations where the global banks see growth and a national bank such as Valley National Bank sees future growth prospects. There is also parity in all 4 banks opinions as to where the fastest growing economic sectors tend to

Since 1970s, with the continuously deepened process of financial liberalisation and financial deregulation, the increasing improvement of financial innovation and the intensified fierce competition, diversified operational strategy has shown an increasingly apparent trend among financial institutions. A wave of business diversification swept global financial firms from the later 1980s until the recent financial crisis happened. From the microeconomics perspective, comparing with specialised business structure, a diversified operation may provide financial holding groups more benefits that generated from information advantage, the economy of scale and effect of coordination. Also, diversification is considered to disperse risks that exposed to financial holding groups. Many people believe that the development of global financial institutions shows a continuous trend in business diversification and cross-industry business operation and such trend will keep going on in the future. However, the subprime crisis and subsequent downturn again drew people’s attention to the pros and cons of universal banking.

This report compares financial performance of two major banks of UK i.e. HSBC Bank Plc and Barclays Bank Plc on the basis of their Balance sheets and profit and loss accounts for the year 2009. This report also provides SWOT analysis of both banks i.e. HSBC and Barclays Bank Plc and provides an insight into their Banking Strategies.

The papers start off with giving an explanation of the Economic theory. It goes on to make the point that the theory really has not come yet to agree on the insinuations of augmented rivalry for banking reliability, and, more precisely, bank capital ratios. The author goes on to bring in an example, which makes the suggestion that increased competition reduces banks' soundness. The document explores the chief mechanisms that are talked about in the literature. The literature makes the point of mentioning that the bank managers have an inducement to take on extreme jeopardies to profit stockholders at the expenditure of investors. The document also brings in another perspective that had a contrast from what Camino and Matutes (2002) mentioned. Both of these made the point prove that

In modern time, the functions of a modern bank are manifold. The functions of a bank may broadly be divided into two parts.

Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2005). Bank-specific, industry-specific and macroeconomic determinants of bank profitability (32026). Retrieved from Munich Personal RePEc Archive website: http://mpra.ub.uni-muenchen.de/32026/1/MPRA_paper_32026.pdf

Private banking industry has changed in a very basic way, driven by many key factors such as: free competition systems, modern developments in information technology (in particular, developments of the internet), and changing demographics. Private banks now operate in an environment shaped by increasing and shifting regulations, and in markets influenced by the uncontrolled situations of the world economy and geopolitical issues.

List of abbreviations List of tables Acknowledgements Abstract 1. 2. 3. 4. 5. 6. 7. 8. Introduction Problem statement Objectives and hypothesis of the study Literature review Structure and performance of the financial sector in

There have been two broad schools of thought when it comes to measure and assess the competition in banking sector. The first, and classical, concept evolved from the Smithian school of economics. This view hold the firm belief that the competition is not what can be created, it happens. Measuring competition is measuring the position of equilibrium in the private and state sectors, as well as in the private and private sector. In an ideally competing banking sector, according to Smith (1776), all the banks have equal opportunities and equal offerings to the society, in such a way that selecting one outfit over other will amount to no difference. On the other hand, the second school of thoughts, regards competition in banking as something that has to be actively ‘injected’ into the banking sector. This involves regulations, laws and overseeing bodies. There are many statistical and analytical methods of measuring competition among banks, some of which are discussed here.

The chapter will provide the rationale for banking and its supervision. A brief mention has been made of the high level segmentation of banking, which will be explored further in the next chapters. The chapter ends with the description of typical financial statements in a bank. The description of the terms in a financial statement have been kept to a level suitable for an introductory course.

Consolidation means that the two firms agreed to play together in a single entity. One firm merges with another house to increase strengthen of market power helps to grow the profitability of the two houses has been dealt. All the same, one firm is acquiring to take another firm due to regulatory perceptions, declining shareholder value and ``too big to fail” (the depository financial institution is starting to fail) conditions government force this bank to merge with healthier banks are carrying this small or weaker banks through acquisitions. Although small banks cannot compete with large and foreign banks, because of scarcity of resources are determined such as size, capital of the banks, bank assets, liquidity ratio, special services to the customer, technology, economics environmental changes to involve the low banks.

The research data was collected over six months to June 2009. The researcher chose the survey as the appropriate research design for the study, and as such, questionnaires and interviews were used as research instruments. Some unclear or hanging issues in the questionnaires were clarified in interviews. A sample of 10 commercial banks randomly chosen was used in this analysis. Twenty questionnaires were used to gather data with two for each commercial bank chosen. A total of 10 interviews were held with the heads of credit or senior managers from those banks. The questionnaire had 12 short questions designed for the bankers and or senior managers from those banks so that they would not have a difficulty in answering questions. The first two questions constituted the respondent profile. The two questions that followed formed the administrative section where the research was obtaining information about the financial institution. Question five up to the end of the questionnaire formed the main body from which the crucial data for the research was

The impacts of all bank sizes are taken into account. The influence of bank size on bank performance has been traditionally modeled by grouping banks based on asset sizes. Because of the short period of operation, most of the banks have separate time series analysis.

The organisation of the rest of the paper is as follows. Section 2 briefly discusses the present banking sector in Sri Lanka. Section 3 reviews relevant literature. In this section, more emphasis is given to discuss the banking efficiency