I need help responding one question !!!!!!! must read attached power point and document to be able to answer .

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Home>Business & Finance homework help>Financial markets homework help>I need help responding one question !!!!!!! must read attached power point and document to be able to answer .

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Melissa Cascino

Claudia Apaestegui

Marlon Borges

Olivia Day

October 28th, 2017

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Business Strategy

Super-community bank

Their definition of this is a friendly local bank with big bank products and services

6 Business Segments:

Investment Bank

Retail Financial Services

Credit Cards

Commercial Banking

Mortgages

Retirement Savings

Isurance

Noninterest income

Core Deposits

Loans to Assets


Return on Equity

Fig. 1: Graph showing the Return on Equity

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Return on Equity
0.21
13.44
0.196
12.57
0.192
13.46
0.2
15.53
0.22
12.8
0.23
12.26
0.189
12.18
0.17
3.76
0.12
-10.14
0.109
-0.74
0.122
5.78
0.129
6.73
0.133
8.6
0.13
8.54
0.11
8.44

Sheet1

years commerce industry
2000 0.21 13.44
2001 0.196 12.57
2002 0.192 13.46
2003 0.2 15.53
2004 0.22 12.8
2005 0.23 12.26
2006 0.189 12.18
2007 0.17 3.76
2008 0.12 -10.14
2009 0.109 -0.74
2010 0.122 5.78
2011 0.129 6.73
2012 0.133 8.6
2013 0.13 8.54
2014 0.11 8.44

Sheet4

Sheet3

Sheet2

years commerce industry Column1 Column2 Column3 Column4
2000 0.21 13.44
2001 0.196 12.57
2002 0.192 13.46
2003 0.2 15.53
2004 0.22 12.8
2005 0.23 12.26
2006 0.189 12.18
2007 0.17 3.76
2008 0.12 -10.14
2009 0.109 -0.74
2010 0.122 5.78
2011 0.129 6.73
2012 0.133 8.6
2013 0.13 8.54
2014 0.11 8.44

Sheet2


Return on Assets

Fig. 2: Graph showing Return on Assets

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Return on Assets
0.02
1.15
0.15
1.13
0.015
1.24
0.015
1.41
0.016
1.28
0.017
1.24
0.015
1.25
0.014
0.38
0.001
-0.96
0.01
-0.08
0.012
0.64
0.012
0.75
0.012
0.96
0.011
0.96
0.011
0.94

Sheet1

Column1 commerce industry
2000 0.02 1.15
2001 0.15 1.13
2002 0.015 1.24
2003 0.015 1.41
2004 0.016 1.28
2005 0.017 1.24
2006 0.015 1.25
2007 0.014 0.38
2008 0.001 -0.96
2009 0.01 -0.08
2010 0.012 0.64
2011 0.012 0.75
2012 0.012 0.96
2013 0.011 0.96
2014 0.011 0.94


Strengths

Chance to achieve its objective of profit maximization

Uses more debt to finance its assets

Extensive retail distribution network

High quality asset investments

Strong credit quality

Does not depend on assets to produce net income

Core deposits

Loan portfolios

Expense control and effective pricing

  • Can control its expenses by paying its debts to avoid financial distress
  • Can adjust its budget


Weaknesses

  • Has a high solvency risk because it uses more debt to finance its assets
  • Increased Exposure

  • Increased the provision of loans and leases
  • This was due to a decline from 2006 - 2014
  • Pressure on home prices
  • Poor underwriting standards

  • Lower profit margin than that of the industry
  • This reflects and inability to control expenses over several years

  • Low Loan Demand


Opportunities

  • Universal investments
  • Commercial Banking
  • As the economy improves, more people will be seeking loans and will have better cash flow
  • Continued growth in credit card market
  • Opportunistic acquisitions & further industry consolidation


Threats

  • New banking regulations in the US and Europe
  • Limited credit card profitability
  • Community Reinvestment Act requirements
  • IB Compensation
  • New capital requirements

  • Weak U.S. mortgage market
  • New laws & guidelines put into place have made it harder for consumers to qualify for mortgages

  • Higher unemployment

*


Major Events

  • 2000
  • Weak Economy

  • 2001
  • Higher non-interest expenses
  • Lower net income and reductions in asset values
  • Less liquidity in equity markets
  • Losses on private equity investments and lower investment banking fees

  • 2004
  • Noninterest expenses increase
  • Lower net income from merger costs
  • charges to conform to accounting polices
  • charge to increase litigation reserves
  • Increase in competitive pressures

*


Major Events

  • 2006
  • Short term interest rates rose
  • Strong capital and equity markets

  • 2007-08
  • Recession
  • Large noninterest expense
  • Increase in allowance for credit losses, write-off of loan loss provisions
  • Increased equity capital
  • Increasing LIBOR rates, increased counterparty risk, less liquidity

*


Return on Sales


Return on Sales


Return on Sales (Profit Margin)

Fig. 4: Graph showing the profit margin for the bank

*

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
profit margin
0.26
87.8
0.26
87.2
0.26
89.3
0.28
90
0.28
90.1
0.26
90.8
0.25
88.1
0.19
83.2
0.2
65.6
0.23
64.5
0.25
72.6
0.13
80.1
0.26
88.6
0.26
88.7
0.25
91.2

Sheet1

commerce industry
2000 0.26 87.8
2001 0.26 87.2
2002 0.26 89.3
2003 0.28 90
2004 0.28 90.1
2005 0.26 90.8
2006 0.25 88.1
2007 0.19 83.2
2008 0.2 65.6
2009 0.23 64.5
2010 0.25 72.6
2011 0.13 80.1
2012 0.26 88.6
2013 0.26 88.7
2014 0.25 91.2


Asset Turnover (Utilization)

Fig. 5: Graph showing the asset turnover

*

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Asset turnover
0.065
0.013
0.06
0.013
0.06
0.014
0.06
0.016
0.06
0.014
0.062
0.014
0.06
0.014
0.057
0.005
0.051
-0.015
0.049
0.0012
0.053
0.009
0.05
0.009
0.048
0.011
0.044
0.01
0.04
0.01

Sheet1

commerce industry
2000 0.065 0.013
2001 0.06 0.013
2002 0.06 0.014
2003 0.06 0.016
2004 0.06 0.014
2005 0.062 0.014
2006 0.06 0.014
2007 0.057 0.005
2008 0.051 -0.015
2009 0.049 0.0012
2010 0.053 0.009
2011 0.05 0.009
2012 0.048 0.011
2013 0.044 0.01
2014 0.04 0.01

Non Interest income as a % of Operating income: need to cut down intervals

*

Chart1

commerce
industry
Net Interest Margin
0.0107
0.0309

Sheet1

Net Interest Margin
commerce 1.07%
industry 3.09%

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Asset turnover
0.065
0.013
0.06
0.013
0.06
0.014
0.06
0.016
0.06
0.014
0.062
0.014
0.06
0.014
0.057
0.005
0.051
-0.015
0.049
0.0012
0.053
0.009
0.05
0.009
0.048
0.011
0.044
0.01
0.04
0.01

Sheet1

commerce industry
2000 0.065 0.013
2001 0.06 0.013
2002 0.06 0.014
2003 0.06 0.016
2004 0.06 0.014
2005 0.062 0.014
2006 0.06 0.014
2007 0.057 0.005
2008 0.051 -0.015
2009 0.049 0.0012
2010 0.053 0.009
2011 0.05 0.009
2012 0.048 0.011
2013 0.044 0.01
2014 0.04 0.01

*

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
profit margin
0.26
87.8
0.26
87.2
0.26
89.3
0.28
90
0.28
90.1
0.26
90.8
0.25
88.1
0.19
83.2
0.2
65.6
0.23
64.5
0.25
72.6
0.13
80.1
0.26
88.6
0.26
88.7
0.25
91.2

Sheet1

commerce industry
2000 0.26 87.8
2001 0.26 87.2
2002 0.26 89.3
2003 0.28 90
2004 0.28 90.1
2005 0.26 90.8
2006 0.25 88.1
2007 0.19 83.2
2008 0.2 65.6
2009 0.23 64.5
2010 0.25 72.6
2011 0.13 80.1
2012 0.26 88.6
2013 0.26 88.7
2014 0.25 91.2

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Return on Assets
0.02
1.15
0.15
1.13
0.015
1.24
0.015
1.41
0.016
1.28
0.017
1.24
0.015
1.25
0.014
0.38
0.001
-0.96
0.01
-0.08
0.012
0.64
0.012
0.75
0.012
0.96
0.011
0.96
0.011
0.94

Sheet1

Column1 commerce industry
2000 0.02 1.15
2001 0.15 1.13
2002 0.015 1.24
2003 0.015 1.41
2004 0.016 1.28
2005 0.017 1.24
2006 0.015 1.25
2007 0.014 0.38
2008 0.001 -0.96
2009 0.01 -0.08
2010 0.012 0.64
2011 0.012 0.75
2012 0.012 0.96
2013 0.011 0.96
2014 0.011 0.94

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Asset turnover
0.065
0.013
0.06
0.013
0.06
0.014
0.06
0.016
0.06
0.014
0.062
0.014
0.06
0.014
0.057
0.005
0.051
-0.015
0.049
0.0012
0.053
0.009
0.05
0.009
0.048
0.011
0.044
0.01
0.04
0.01

Sheet1

commerce industry
2000 0.065 0.013
2001 0.06 0.013
2002 0.06 0.014
2003 0.06 0.016
2004 0.06 0.014
2005 0.062 0.014
2006 0.06 0.014
2007 0.057 0.005
2008 0.051 -0.015
2009 0.049 0.0012
2010 0.053 0.009
2011 0.05 0.009
2012 0.048 0.011
2013 0.044 0.01
2014 0.04 0.01

*

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Asset turnover
0.065
0.013
0.06
0.013
0.06
0.014
0.06
0.016
0.06
0.014
0.062
0.014
0.06
0.014
0.057
0.005
0.051
-0.015
0.049
0.0012
0.053
0.009
0.05
0.009
0.048
0.011
0.044
0.01
0.04
0.01

Sheet1

commerce industry
2000 0.065 0.013
2001 0.06 0.013
2002 0.06 0.014
2003 0.06 0.016
2004 0.06 0.014
2005 0.062 0.014
2006 0.06 0.014
2007 0.057 0.005
2008 0.051 -0.015
2009 0.049 0.0012
2010 0.053 0.009
2011 0.05 0.009
2012 0.048 0.011
2013 0.044 0.01
2014 0.04 0.01

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Return on Equity
0.21
13.44
0.196
12.57
0.192
13.46
0.2
15.53
0.22
12.8
0.23
12.26
0.189
12.18
0.17
3.76
0.12
-10.14
0.109
-0.74
0.122
5.78
0.129
6.73
0.133
8.6
0.13
8.54
0.11
8.44

Sheet1

years commerce industry
2000 0.21 13.44
2001 0.196 12.57
2002 0.192 13.46
2003 0.2 15.53
2004 0.22 12.8
2005 0.23 12.26
2006 0.189 12.18
2007 0.17 3.76
2008 0.12 -10.14
2009 0.109 -0.74
2010 0.122 5.78
2011 0.129 6.73
2012 0.133 8.6
2013 0.13 8.54
2014 0.11 8.44

Sheet4

Sheet3

Sheet2

years commerce industry Column1 Column2 Column3 Column4
2000 0.21 13.44
2001 0.196 12.57
2002 0.192 13.46
2003 0.2 15.53
2004 0.22 12.8
2005 0.23 12.26
2006 0.189 12.18
2007 0.17 3.76
2008 0.12 -10.14
2009 0.109 -0.74
2010 0.122 5.78
2011 0.129 6.73
2012 0.133 8.6
2013 0.13 8.54
2014 0.11 8.44

Sheet2

Chart1

2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
commerce
industry
Return on Assets
0.02
1.15
0.15
1.13
0.015
1.24
0.015
1.41
0.016
1.28
0.017
1.24
0.015
1.25
0.014
0.38
0.001
-0.96
0.01
-0.08
0.012
0.64
0.012
0.75
0.012
0.96
0.011
0.96
0.011
0.94

Sheet1

Column1 commerce industry
2000 0.02 1.15
2001 0.15 1.13
2002 0.015 1.24
2003 0.015 1.41
2004 0.016 1.28
2005 0.017 1.24
2006 0.015 1.25
2007 0.014 0.38
2008 0.001 -0.96
2009 0.01 -0.08
2010 0.012 0.64
2011 0.012 0.75
2012 0.012 0.96
2013 0.011 0.96
2014 0.011 0.94


Future Expectations

  • What to expect

in the future

*