Industry Analysis: Banking Essay example -- Essays Papers

Industry Analysis argoting The banking diligence has come under change magnitude pessimism of late because of rising short and long-term use up rates. The banking applications market capitalization made a substantial decline. Most investors are concerned with whether the industry can sustain continued profitability as a take of these factors.Banks have responded in recent years to these problems by diversifying away from recreate sensitive products and services. But quest rates are the fundamental facial gesture of any financial services. Therefore, I believe the financial services industry will be deeply affected by rising interest rates. Banks have experienced good business factors over the past both years. Interest rates were low, credit quality was good, and inflation was low. These factors are ordinarily predictive of the types of earnings banks should report. But good times cant continue because interest rate hikes cause decreased lending activity, damaged credit quality, and reduced values of bond portfolios.Porters Five Forces Analysis1.Rivalry among competing sellers The banking industry is keep to restructure and position itself for our changing economy as a result, many a(prenominal) mega-mergers have occurred in recent years. Citicorp and Travelers Insurance agreed to merge in April 1998 at a value of $70 billion. Bank of America and Nations Bank also agreed to merge shortly afterwards which became the largest bank in the United States. Bank merg...