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The North America Banking Sectors : A Company and Industry Analysis (October 2007)

  • ID: 655991
  • Report
  • October 2007
  • Region: America, North America, United States
  • 36 pages
  • Mergent
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This report updates the previous North American banking report, focusing on the markets in Canada and the United States
Current Environment - Key Points
- In the first half of 2007, the US banking industry faced a period of deteriorating credit quality and a worsening of the US subprime meltdown
- Sales of existing US homes fell in June to 5.75 million units on an annualized basis, the lowest rate since November 2002
- Several leading mortgage lenders catering to home buyers with weak credit either went bankrupt or sold off their subprime businesses
- M&A activity in the US banking industry was vigorous in the six months ended August 2007 as banks geared up to consolidate
- In a bid to soothe the markets and boost liquidity, the Bank of Canada (BOC) pumped billions into the country-s banking system in August. - In the third quarter of 2007, Canadian banking stocks were hit hard by the US home loan turmoil. Financial services institutions, which account for a third of the Toronto Stock Exchange (TSX) market cap, fell by 1.3% to 208.88 points on August 10
- Canadian banks, which are currently prohibited from merging domestically, have set out to join the M&A frenzy pace and hope that international acquisitions will enable them to gain new markets

Industry Profile - Key Points
- At the end of June 2007, Federal Deposit Insurance Corporation (FDIC) figures put assets and deposits held by the US banking industry at US$12.26 trillion and US$8.04 trillion respectively
- US banks continue to place customer relationships as a top priority. Realizing the importance of maximizing customer loyalty, most banks now employ customer relationship management (CRM) systems
- On April 17, the US Supreme Court ruled that state regulatory power to oversea financial institutions would be limited. States may not regulate mortgage lending subsidiaries of national banks; instead the court ruled that the Federal Government was the sole regulator of national bank subsidiaries
- Banks in Canada had over almost C$2.5 trillion in domestic assets or more than 70% of the overall total assets of the country-s financial services sector as of April 2007
- Pushing to boost profits, Canadian banks have shifted their focus and expansion plans to overseas markets, especially Asia and Latin America
Market Trends and Outlook - Key Points
- US banks and mortgage lenders are under growing pressure to curtail lending after subprime loans sent aftershocks into the broader mortgage market
- Mobile banking is making a comeback and becoming a reality in the US after largely failing in early 2000
- Bankruptcies and foreclosures in the US continue to grow in the wake of the subprime mortgage fallout. In the first half of 2007, the number of US bankruptcies filed rose 48.23%, with 404,090 over the same period in 2006, according to the American Bankruptcy Institute (ABI). - Canadian banks are stepping up their efforts to fight money laundering and terrorist funded activities
- Many banks, from Canada-s largest to the smallest, are actively building branches in new and high- growth areas such as Toronto, Vancouver, Calgary and Edmonton
- In the second quarter of 2007, home affordability continued to deteriorate sharply across Canada, with the situation expected to worsen

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Current Environment - US
- Sector Overview

- Sector Performance
- Leading Players
- Mergers and Acquisitions
Current Environment - Canada
- Sector Overview

- Sector Performance
- Leading Players
- Mergers and Acquisitions



Industry Profile - US
- Industry Size and Value

- Industry Highlights
- Policy and Regulatory
- Environment



Industry Profile - Canada
- Industry Size and Value
- Industry Highlights
- Policy and Regulatory

Environment



Market Trends and Outlook -
US
- Banks in Belt-tightening Mode
- The Rebirth of Mobile Banking
- Bankruptcies and Foreclosures

Skyrocket
- Market Outlook
Market Trends and Outlook -
Canada
- Canadian Banks Step up Fight

Against Money Laundering
- Banks Continue to Open In-store

Branches
- Housing Affordability

Deteriorates
- Market Outlook
Currency Conversion Table
The Scope of This Report
Key References
Comparative Data
Reports Coverage

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