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www.datamonitor.comDatamonitor USA
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Retail Lending in theUnited States
Industry Profile
Reference Code: 0072-2336Publication date: December 2008
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ABOUT DATAMONITOR
All Rights Reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by
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taken based on any information that may subsequently prove to be incorrect.
United States - Retail Lending
Datamonitor (Published December 2008) Page 2
ABOUT DATAMONITOR
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Through its proprietary databases and wealth of expertise, Datamonitor provides
clients with unbiased expert analysis and in depth forecasts for six industry sectors:
Healthcare, Technology, Automotive, Energy, Consumer Markets, and Financial
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The company also advises clients on the impact that new technology and
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EXECUTIVE SUMMARY
United States - Retail Lending
Datamonitor (Published December 2008) Page 3
EXECUTIVE SUMMARY
Market Value
The United States retail lending market shrank by 4.4% in 2008 to reach a value of
$12.516.7 billion.
Market Value Forecast
In 2013, the market is forecast to have a value of $14,929 billion, an increase of
19.3% since 2008.
Market Segmentation I
Mortgage lending is the largest category in the US market with 80.4% of revenues
generated this way.
Market Segmentation II
The US generates 45.5% of revenues in the global market.
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CONTENTS
United States - Retail Lending
Datamonitor (Published December 2008) Page 4
TABLE OF CONTENTS
EXECUTIVE SUMMARY 3
CHAPTER 1 Market Overview 7
1.1 Market Definition 7
1.2 Research Highlights 7
1.3 Market Analysis 8
CHAPTER 2
Market Value 9
CHAPTER 3 Market Segmentation I 10
CHAPTER 4 Market Segmentation II 11
CHAPTER 5 Competitive Landscape 12
CHAPTER 6 Leading Companies 15
6.1 Citigroup Inc. 15
6.2 Bank of America Corporation 18
6.3 JP Morgan Chase & Co 22
CHAPTER 7 Market Forecasts 26
7.1 Market Value Forecast 26
CHAPTER 8 Macroeconomic Indicators 27
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CONTENTS
United States - Retail Lending
Datamonitor (Published December 2008) Page 5
CHAPTER 9 Appendix 28
9.1 Methodology 28
9.2
Industry Associations 29
9.3 Related Datamonitor Research 29
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CONTENTS
United States - Retail Lending
Datamonitor (Published December 2008) Page 6
LIST OF TABLES
Table 1: United States Retail Lending Market Value: $ billion, 2004-2008........................9
Table 2:
United States Retail Lending Market Segmentation I: % Share, by Value,
2008(e) .............................................................................................................10
Table 3: United States Retail Lending Market Segmentation II: % Share, by Value,
2008(e) .............................................................................................................11
Table 4: Key Facts: Citigroup Inc....................................................................................15
Table 5: Key Financials: Citigroup Inc. ...........................................................................17
Table 6: Key Facts: Bank of America Corporation ..........................................................18
Table 7:
Key Financials: Bank of America Corporation...................................................21
Table 8: Key Facts: JP Morgan Chase & Co ..................................................................22
Table 9: Key Financials: JP Morgan Chase & Co...........................................................25
Table 10: United States Retail Lending Market Value Forecast: $ billion, 2008-2013.......26
Table 11: United States Size of Population (million) , 2004- 2008(e)................................27
Table 12: United States GDP (Constant 2000 Prices, $ billion), 2004- 2008(e)................27
Table 13:
United States Inflation, 2004- 2008(e) ..............................................................27
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MARKET OVERVIEW
United States - Retail Lending
Datamonitor (Published December 2008) Page 7
CHAPTER 1 MARKET OVERVIEW
1.1 Market Definition
This retail lending market profile covers the mortgage and consumer credit market.
The market value reflects mortgage and consumer credit balances outstanding at the
end of the year. At the time of preparation of this report, many financial markets were
in a critical state due to the credit crunch, and it was difficult to predict how this
would impact on retail lending. For this reason, all forecasts in this profile should be
regarded as highly approximate. All currency conversions used in this profile were
carried out at constant 2007 annual average exchange rates.
For the purpose of this report the Americas comprises Brazil, Canada, Mexico and
the US.
1.2 Research Highlights
The US retail lending market generated total revenues of $12,516.7 billion in 2008,
representing a compound annual growth rate (CAGR) of 5.6% for the period spanning
2004-2008.
The mortgage lending segment was the markets most lucrative in 2008, generating
total revenues of $10,057.3 billion, equivalent to 80.4% of the market's overall value.
The performance of the market is forecast to decelerate, with an anticipated CAGR of
3.6% for the five-year period 2008-2013, which is expected to drive the market to a
value of $14,928.9 billion by the end of 2013.
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MARKET OVERVIEW
United States - Retail Lending
Datamonitor (Published December 2008) Page 8
1.3 Market Analysis
After a period of steady growth, the US retail lending market declined in 2008. Further
declines are expected, however the market is forecast to recover and post steadily
increasing growth rates towards 2013.
The US retail lending market generated total revenues of $12,516.7 billion in 2008,
representing a compound annual growth rate (CAGR) of 5.6% for the period spanning
2004-2008. In comparison, the European and Asia-Pacific markets grew with CAGRs
of 6.3% and 5.3%, respectively, over the same period, to reach respective values of
$9,557.3 billion and $4,078.9 billion in 2008.
The mortgage lending segment was the markets most lucrative in 2008, generating
total revenues of $10,057.3 billion, equivalent to 80.4% of the market's overall value.
The consumer credit segment contributed revenues of $2,459.4 billion in 2008,
equating to 19.6% of the market's aggregate revenues.
The performance of the market is forecast to decelerate, with an anticipated CAGR of
3.6% for the five-year period 2008-2013, which is expected to drive the market to a
value of $14,928.9 billion by the end of 2013. Comparatively, the European and Asia-
Pacific markets will grow with CAGRs of 3.6% and 2.8%, respectively, over the same
period, to reach respective values of $11,411.7 billion and $4,684.4 billion in 2013.
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MARKET VALUE
United States - Retail Lending
Datamonitor (Published December 2008) Page 9
CHAPTER 2 MARKET VALUE
The United States retail lending market shrank by 4.4% in 2008 to reach a value of
$12.516.7 billion.
The compound annual growth rate of the market in the period 2004-2008 was 5.6%.
Table 1: United States Retail Lending Market Value: $ billion, 2004-2008
Year $ billion % Growth2004 10,064.82005 11,189.6 11.20%2006 12,291.2 9.80%2007 13,097.0 6.60%2008 12,516.7 -4.40%CAGR, 2004-2008: 5.6%
Source: Datamonitor D A T A M O N I T O R
Figure 1: United States Retail Lending Market Value: $ billion, 2004-2008
Source: Datamonitor D A T A M O N I T O R
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2004 2005 2006 2007 2008
$
billion
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%8.0%
10.0%
12.0%
%Growth
$ billion % Growth
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MARKET SEGMENTATION I
United States - Retail Lending
Datamonitor (Published December 2008) Page 10
CHAPTER 3 MARKET SEGMENTATION I
Mortgage lending is the largest category in the US market, generating 80.4% of the
overall revenues.
Consumer credits generate a further 19.6% of revenues.
Table 2: United States Retail Lending Market Segmentation I: % Share,
by Value, 2008(e)
Category % ShareMortgage Lending 80.40%Consumer Credit 19.60%
Total 100.0%
Source: Datamonitor D A T A M O N I T O R
Figure 2: United States Retail Lending Market Segmentation I: % Share,
by Value, 2008(e)
Source: Datamonitor D A T A M O N I T O R
Mortgage
Lending
80.4%
Consumer Credit
19.6%
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MARKET SEGMENTATION II
United States - Retail Lending
Datamonitor (Published December 2008) Page 11
CHAPTER 4 MARKET SEGMENTATION II
The US generates 45.5% of revenues in the global market.
Europe accounts for a further 34.8% of the global market value.
Table 3: United States Retail Lending Market Segmentation II: % Share,
by Value, 2008(e)
Geography % ShareUnited States 45.50%Europe 34.80%Asia-Pacific 14.80%Rest of the World 4.90%Total 100.0%
Source: Datamonitor D A T A M O N I T O R
Figure 3: United States Retail Lending Market Segmentation II: % Share,
by Value, 2008(e)
Source: Datamonitor D A T A M O N I T O R
United States
45.5%
Europe
34.8%
Asia-Pacif ic
14.8%
Rest of the
World
4.9%
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COMPETITIVE LANDSCAPE
United States - Retail Lending
Datamonitor (Published December 2008) Page 12
CHAPTER 5 COMPETITIVE LANDSCAPE
For the purposes of this profile, the US retail lending market consists of consumer
credit and mortgages, valued in terms of outstanding balances rather than interest
and non-interest revenues obtained by credit providers. Individuals taking any form of
credit or mortgage are considered as buyers. Banks, building societies, credit card
companies and any others financials institutions that are involved in the credit and
mortgage market are taken as players and information technology and
communications systems companies as suppliers. The buyer power in this market is
moderate as players are trying to regain their confidence in financial products. The
effects of the economic downturn have not directly influenced the suppliers, whose
services are essential for running the financial business. The threat of new entrants is
bigger in the US where several major players ceased to exist, rather than in other
countries where the well established institutions may post quite a substantial
retaliation during recession. Alternative options to lending are growing as confidence
in financial institutions weakens and individuals face uncertain times.
Considering the fact that in retail lending the buyers are individual consumers, buyer
power in this market is weakened. Losing one customer has a fairly marginal impact
on a typical credit provider, although at the time of writing this report the lending
institutions tend to devote their funds and time in order to keep the customer or tempt
them offering better terms of the agreement once switched from other lenders.
Switching costs may also significantly weaken buyer power. For example, switching
mortgage provider may require the buyer to spend time on paperwork and impose
additional fees, even though a new provider might offer a cheaper loan in the longer
term. Changing credit card provider can appear to have low switching costs - in fact,
the buyer may be offered 0% interest for a period or other inducements to switch - but
there is growing awareness that moving from one credit card provider to another too
frequently can reduce customer's credit rating, which constitutes significant switching
costs. Means of differentiation in this market include a variety of loyalty schemes for
credit cards, and the development of products such as the 'current account
mortgage': a current (checking) account that includes a mortgage and the facility to
secure other loans against the mortgaged real estate. Consumer loyalty is the major
issue for lenders as the current, unpredictable situation in the lending market pushes
customers to switch around in the hope of finding the best and the most secured
funds provider. Overall, buyer power is assessed as moderate.
In the US retail lending market, suppliers of information technology and
communications systems have considerable power. It is important for lenders such as
banks, building societies, and credit card companies to have ITC systems that can
deal with large numbers of transactions rapidly and reliably. As identity theft becomes
an increasing threat, lenders must offer continual upgrades to their security systems.
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COMPETITIVE LANDSCAPE
United States - Retail Lending
Datamonitor (Published December 2008) Page 13
Typical suppliers are large companies such as IBM, since relatively few suppliers
have sufficient resources and experience to analyse the complex ICT needs of a
major retail lender and implement a solution. Furthermore, although major financial
institutions will maintain their own IT departments, there is little likelihood of
significant backward integration, which further strengthens suppliers (although it is
equally unlikely that suppliers would attempt to integrate forwards into financial
services). Switching costs are high, since there are significant sunk costs associated
with the commissioning of a particular ITC system (custom hardware, staff training,
etc). Additional costs for major retail lenders such as banks and building societies
include salaries, rents, and other overheads associated with their extensive high
street branch networks. While many companies offering lending facilities are financial
institutions that hold the assets themselves, others act purely as retailers. For
example, store cards and private label credit cards are offered to end-users by a
variety of companies and organisations. In these cases, the suppliers are the
companies extending credit upstream, and again, these will generally have moderate
supplier power relative to the retailers. Supplier power is assessed as moderateoverall in this market.
The US lending market is estimated to post quite healthy growth rates after 2010
which may encourage new entrants to emerge at this time. However, in the current
economic climate lending has dropped and the housing market is facing decline,
which offers an uncertain prospect for potential new entrants. The fact that
customers confidence in established institutions has been recently impaired might
push them towards new institutions with innovative (or just the opposite traditional)
attitudes towards lending. However, entry to the market in the form of a fully-fledged
bank or similar financial institution requires substantial amounts of capital, to establish
a branch network and brand identity, and also to comply with the international strictcapital adequacy requirements. However, it is possible to enter the market as an
intermediary, offering consumers credit that is ultimately sourced by a third-party
institution. This is an easier mode of entry. Overall, the likelihood of new entrants is
assessed as moderate.
The recent highly publicized crisis of various financial institutions along with the
current economic climate and predictions of further downturn are strongly
undermining the confidence in market players. The threat of recession and possible
losses to loans banks is likely to inevitably result in the restriction of capital and lower
willingness of consumers to borrow and, consequently, negatively affect the financial
condition of banks and investors. Such a situation in the lending market may pushconsumers to look for alternatives. However, when considering, for example, the
average price of property few realistic substitutes exist for mortgages. Rental seems
to be the most suitable possibility, but over a typical lifetime may not be cheaper than
purchase. Debit cards are a partial substitute for credit cards, offering the same
advantages over cash (convenience, security, ability to carry out remote transaction
such as online purchases), but of course do not offer credit facilities.
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COMPETITIVE LANDSCAPE
United States - Retail Lending
Datamonitor (Published December 2008) Page 14
Another substitute for retail lending is to delay purchases and use retail saving
products, such as bonds, to build up sufficient funds, which is becoming even more
popular at the time of the report writing. Generally, however, consumer credit has
proved itself a very popular substitute for the more traditional approach. Overall the
threat of the substitutes in the US retail lending market is moderate.
The main primary sources of retail lending in the US (banks and similar financial
institutions) are all fairly similar in service portfolios and business models, although
players try to differentiate themselves by offering a wide range of lending services
and competitive interest rates. The latest situation in the US lending market caused
major players like Lehman, to withdraw from the stage, reducing significantly the
number of the very strong players. However the biggest credit market in the world is
on constant outlook for lending services and the prediction for the future is optimistic
which may ease the present fierce rivalry in forthcoming years. The general downturn
in the housing market may intensify competition going forward. However, the present
lower demand for these services, caused by the general distrust mitigates the former.
The, present decreasing global lending market, may cause the rivalry level to grow.
All in all the rivalry level is assessed as strong.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 15
CHAPTER 6 LEADING COMPANIES
6.1 Citigroup Inc.
Table 4: Key Facts: Citigroup Inc.
Address: Citigroup Inc., 399 Park Avenue, New York, New York10043, USA
Telephone: 1 212 559 1000Website: www.citigroup.comFinancial Year-End: December
Source: Company Website D A T A M O N I T O R
Citigroup (or 'the group') is one of the most diversified financial services company in
the world. The group's product portfolio includes retail banking, corporate banking,
investment banking and asset management. The group has operations in 100
countries spanning North America, Latin America, Asia, Europe, the Middle East and
Africa. Citigroup is headquartered in New York City, New York and employs about
374,000 people.
Citigroup is a diversified global financial services holding company, It has more than
200 million customer accounts in over 100 countries. Citibank, a subsidiary, is
Citigroup's arm in commercial banking. Citibank's principal offerings include
consumer finance, mortgage lending, and retail banking products and services,investment banking, commercial banking, cash management, trade finance and e-
commerce products and services, and private banking products and services.
Citigroup operates in the following regions: North America, Latin America, Asia,
Europe, the Middle East and Africa
The company operates through five operating segments: global consumer group,
markets and banking, global wealth management, alternative investments and
corporate and other.
Global consumer group provides an array of banking, lending, insurance and
investment services. The segment's distribution network includes 8,527 branches,approximately 20,000 ATMs, and 530 automated lending machines (ALMs), the
Internet, telephone and direct mail, and through independent representatives. Global
consumer group is comprises the U.S. consumer and international consumer
businesses. The U.S. consumer is composed of four businesses: cards, retail
distribution, consumer lending and commercial business.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 16
Operating in fie geographies including Mexico, Latin America, EMEA, Japan, and
Asia, international consumer sub segment is composed of three businesses: cards,
consumer finance and retail banking.
Markets and banking segment provides trading, investment banking, and commercial
lending products and services to corporations, governments, institutions and
investors in approximately 100 countries. Markets and banking has the following sub-
segments: securities and banking, transaction services and other.Securities and
banking offer an array of investment banking services and products including
advisory services, debt and equity trading, institutional brokerage, foreign exchange,
structured products, derivatives, and lending. Transaction services include cash
management, trade services, and securities and fund services (SFS).
The global wealth management (GWS) division comprises three of brands: The Citi
Private Bank, Smith Barney and Citi Investment Research. The CIti Private Bank
provides personalized wealth management services for high-net-worth clients in
around 33 countries and territories. These services include investment management,
investment finance and banking services. Smith Barney provides investment advice,
financial planning and brokerage services to affluent individuals, companies, and non-
profits organizations. Citi Investment Research covers more than 3,000 companies
that represent 90% of the market capitalization of the major global indices. It also
provides macro and quantitative analysis of global markets and sector trends.
Alternative investments (AI) manage capital on behalf of Citigroup, as well as for
third-party institutional and high-net-worth investors. AI is an integrated alternative
investment platform that manages a range of products across five asset classes:
private equity, hedge funds, real estate, structured products and managed futures.
Alternative investments (AI) manage capital on behalf of Citigroup, as well as for
third-party institutional and high-net-worth investors. AI is an integrated alternative
investment platform that manages a range of products across five asset classes:
private equity, hedge funds, real estate, structured products and managed futures
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 17
Key Metrics
Table 5: Key Financials: Citigroup Inc.
Metric 2003 2004 2005 2006 2007
Revenues 71,594.0 79,635.0 83,642.0 89,615.0 81,698.0Net Income 17,853.0 17,046.0 24,589.0 21,538.0 3,617.0
Profit Margin 24.9% 21.4% 29.4% 24.0% 4.4%
Total Assets 1 ,264 ,032. 0 1,484 ,101 .0 1,494 ,037 .0 1,884 ,318 .0 2 ,187, 631.0
Total Liabi lit ies 1,166,018.0 1,374,810.0 1,381,500.0 1,764,535.0 2,074,033.0
Employees 259,000 294,000 307,000 337,000 374,000All in $ millions, except for employee numbers and margins
Source: Company Filings D A T A M O N I T O R
Figure 1: Revenues & Profitability: Citigroup Inc.
0
20,000
40,000
60,000
80,000
100,000
2003 2004 2005 2006 2007Year
US$Millions
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
ProfitMargin(%)
Revenues Net Income Profit Margin
Source: Company Filings D A T A M O N I T O R
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 18
6.2 Bank of America Corporation
Table 6: Key Facts: Bank of America Corporation
Address: Bank of America Corporation, Bank of America CorporateCenter, 100 North Tryon Street, Charlotte, North Carolina28255, USA
Telephone: 1 704 386 5681Website: www.bankofamerica.comFinancial Year-End: DecemberTicker: BACStock Exchange: New York
Source: Company Website D A T A M O N I T O R
Bank of America Corporation (BoA or 'the company') is one of the world's largestfinancial institutions. It serves individual consumers, small businesses and large
corporations with a range of banking, investing, asset management and other
financial products and services. The company primarily operates in the US, Latin
America, Europe and Canada. BoA is headquartered in Charlotte, North Carolina and
employs 210,000 people.
BoA is a US based bank holding company. Through its banking and non-banking
subsidiaries in the US and selected international markets, BoA provides a range of
financial services and products. The company operated in more than 30 states in the
US, the District of Columbia, and 44 foreign countries, in December 2006. In the US,
BoA serves more than 55 million consumer and small business relationships with
more than 5,700 retail banking offices, more than 17,000 automated teller machines
(ATMs) and through the Internet.
BoA generates revenue through four business segments: global consumer and small
business banking, global corporate and investment banking, global wealth and
investment management, and others.
Global consumer and small business banking (GCSBB) serves approximately 53
million consumer households in addition to small businesses across the US. BoA's
retail franchise covers 30 states in the US and the District of Columbia, representing
around 76% of US residents. Within GCSBB there are four businesses: deposits,
card services, mortgage and home equity. BoA's deposit products include traditional
savings accounts, money market savings accounts, certificate of deposit (CDs),
individual retirement account (IRAs), and regular and interest checking accounts.
Debit card results are also included in deposits. In the fiscal year ended December
31, 2006, the company added approximately 2.4 million net new retail checking
accounts and 1.2 million net new retail savings accounts.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 19
The card services sub division offers consumer and business cards, unsecured
lending, merchant services and international card services. BoA offers a variety of co-
branded and affinity credit card products. The mortgage business includes the
origination, fulfillment, sale and servicing of first mortgage loan products. Servicing
activities include collecting cash for principal, interest and escrow payments from
borrowers, and accounting for and remitting principal and interest payments to
investors, and escrow payments to third parties. In addition to the company's own
distribution channels, mortgage products are sold through more than 6,500 mortgage
brokers in 50 states of the US.
As on December 31, 2006, the servicing portfolio of BoA was valued at $333 billion.
Home equity generates revenue by providing a line of home equity products and
services to customers nationwide. Home products are distributed through the
company's retail network and through partnership with mortgage brokers. As on
December 31, 2006, the home equity servicing portfolio was $86.5 billion.
Global corporate and investment banking (GCIB) provides a range of financial
services to clients ranging from companies with $2.5 million in revenues to large
multinational corporations, governments, institutional investors and hedge funds.
BoA's clients are supported through offices in 26 countries that are divided into four
distinct geographic regions: US and Canada; Asia; Europe, Middle East, and Africa;
and Latin America. GCIB products and services are delivered from three primary
businesses: business lending, capital markets and advisory services, and treasury
services.
Business lending provides lending related products like commercial and corporate
bank loans and commitment facilities to business banking clients, middle market
commercial clients and large multinational corporate clients.
Real estate lending products are issued to public and private developers,
homebuilders and commercial real estate firms. Products also include indirect
consumer loans offered through financing automotive, marine, motorcycle and
recreational vehicle dealerships across the US. The capital markets and advisory
services sub division provides products, advisory services and financing to
institutional investor clients globally. BoA also provides debt and equity underwriting
and distribution capabilities, merger related advisory services and risk management
solutions.
The treasury services sub division provides integrated working capital managementand treasury solutions to clients worldwide through a network of proprietary offices
and special clearing arrangements. Products and services include treasury
management, trade finance, foreign exchange, short-term credit facilities and short-
term investing options.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 20
Global wealth and investment management provides customized banking and
investment services customized to the wealth management goals of individual and
institutional customers. The services are offered through three primary businesses:
the private bank, Columbia Management (Columbia), and premier banking and
investments (PB&I). In addition, the segment includes the impact of Banc of America
Specialist and the results of asset liability management activities.
The segment also includes the impact of transferring 'qualifying affluent customers'
from 'global consumer and small business banking' to 'PB&I customer service model'.
The private bank provides investment, trust and banking services, as well as specialty
asset management services for oil and gas, real estate, farm and ranch, timberland,
private businesses and tax advisory services.
The private bank also provides integrated wealth management solutions to high-net-
worth individuals and families with investable assets greater than $50 million through
its Family Wealth Advisors unit. Columbia is an asset management business serving
the needs of both institutional clients and individual customers.
Columbia provides asset management services including mutual funds, liquidity
strategies and separate accounts. Columbia mutual fund provides an array of
investment strategies and products including equities, fixed income, and money
market funds. Columbia distributes its products and services directly to institutional
clients. The company reaches individual clients through the private bank, Family
Wealth Advisors, premier banking and investments, and non-proprietary channels,
including other brokerage firms.
PB&I include Banc of America Investments, the company's full-service retail
brokerage business and its premier banking channel. PB&I has a network of
approximately 4,400 client advisors with a personal wealth profile that includes
investable assets plus a mortgage that exceeds $500,000 or at least $100,000 of
investable assets.
Others includes BoA's equity investment businesses, the residual impact of the
allowance for credit losses and from the cost allocation processes, merger and
restructuring charges, inter segment eliminations, and the results of certain consumer
finance and commercial lending businesses that are being liquidated. Others also
includes certain amounts associated with asset liability management activities,
hedges of interest rate and foreign exchange rate fluctuations, certain gains or losses
on sale of whole mortgage loans, and gains or losses on sale of debt securities.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 21
Key Metrics
Table 7: Key Financials: Bank of America Corporation
Metric 2003 2004 2005 2006 2007
Revenues 37,834.0 48,965.0 56,923.0 74,247.0 68,068.0Net Income 10,762.0 13,947.0 16,465.0 21,133.0 14,982.0
Profit Margin 28.4% 28.5% 28.9% 28.5% 22.0%
Total Assets 749 ,104. 0 1,044 ,631.0 1,291 ,803.0 1,459 ,737.0 1,715, 746.0
Total Liabilit ies 699 ,069. 0 960 ,047 .0 1,190 ,270 .0 1,324 ,465 .0 1 ,568, 943.0
Employees 133,500 176,000 176,638 203,000 210,000All in $ millions, except for employee numbers and margins
Source: Company Filings D A T A M O N I T O R
Figure 2: Revenues & Profitability: Bank of America Corporation
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2003 2004 2005 2006 2007Year
US$Millions
0.0%
5.0%
10.0%
15.0%
20.0%
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30.0%
35.0%
ProfitMargin(%)
Revenues Net Income Profit Margin
Source: Company Filings D A T A M O N I T O R
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 22
6.3 JP Morgan Chase & Co
Table 8: Key Facts: JP Morgan Chase & Co
Address: 270 Park Avenue, New York 10017 2070, New York, USATelephone: 1 212 270 6000Fax: 1 212 270 1648Website: www.jpmorganchase.comFinancial Year-End: DecemberTicker: JPMStock Exchange: New York
Source: Company Website D A T A M O N I T O R
JP Morgan Chase & Company (JPMC) provides investment banking, security
services, asset management, hedge fund and retail banking services through itssubsidiaries. The company primarily operates in US, Europe, the Middle East, Africa
and the Middle East. It is headquartered in New York City, New York and employs
180,667 people.
JPMorgan Chase & Company (JPMC) is a financial holding company. It is a leading
global financial services firm and one of the largest banking institutions in the US. In
2007, JPMC recorded around $1.56 trillion in assets and $123.2 billion in
stockholders' equity. The company is a leader in investment banking, financial
transaction processing, asset management, and private equity.
The company operates through the following brands: JPMorgan Chase, JPMorganand Chase. JPMorgan Chase represents the parent company, which includes all of
the firm's subsidiaries; it is also used by the treasury services business. The following
businesses of JPMC use the JPMorgan brand: investment bank, worldwide securities
services, private banking, asset management, one equity partners and private client
services. The US consumer and commercial banking businesses serve customers
under the Chase brand.
JPMC's principal bank subsidiaries are JPMorgan Chase Bank, a national banking
association in the US with branches in 17 states, and Chase Bank USA, a national
bank that is the company's credit card issuing bank.
JPMC's principal non-bank subsidiary is JP Morgan Securities, which is the
company's US investment banking arm. Its operations are spread across more than
50 countries.
The company operates through seven segments: investment bank, retail financial
services, card services, asset management, treasury and securities services,
commercial banking, and corporate.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 23
Investment bank
JPMC operates in the investment banking sector through JPMorgan, a subsidiary.
JPMorgan is one of the world's leading investment banks. The division advises on
corporate strategy, capital raising in equity and debt markets, risk management, and
market-making in cash securities and derivative instruments. Additionally, the division
engages in deploying its own capital to proprietary investing and trading activities.
Retail financial services
The retail financial services division operates through four sub-divisions: home
finance, consumer and small business banking, auto and education finance, and
insurance. This division is engaged in the provision of products and services including
deposits, investments, loans and insurance for consumers and small businesses. The
home finance sub-division is a provider of consumer real estate loan products and is
one of the largest originators and providers of home mortgages. The consumer and
small business banking sub-division offers one of the largest branch networks in the
US.
This sub-division operates in seventeen states with 3,100 bank branches and 9,100
ATMs. Auto and education finance is the largest non-captive originator of automobile
loans as well as a leading provider of loans for college students.
Through its insurance operations, the company is engaged in selling and underwriting
a range of financial protection products and investment alternatives. The insurance
product portfolio includes life insurance, annuities and debt protection products.
JPMC sold its insurance business in 2006.
Card services
The card services division is a leading issuer of credit cards in the US. It has more
than 154 million cards in circulation and about $153 billion worth of managed loans.
The card services division is the second-largest MasterCard/ Visa credit card issuer
in the US. It offers a wide variety of general-purpose cards to meet the needs of
individual consumers, small businesses and partner organizations. The partner
organizations include AARP, Amazon, Continental Airlines, Marriott, Southwest
Airlines, Sony, United Airlines and Walt Disney Company. The card division also
issues private-label cards for Circuit City, Kohl's, Sears Canada and BP. Additionally,
this division is the largest merchant acquirer in the US.
Asset management
The asset and wealth management division provides investment advisory and
management services to institutions and individuals. Through this division, JPMC is a
global leader in investment and wealth management.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 24
It provides global investment management in equities, fixed income, real estate,
hedge funds, private equity and liquidity. The asset management operations deal in
both money market instruments and bank deposits. It also provides trust and estate
and banking services to high-net-worth clients, and retirement services to
corporations and individuals.
This division serves four distinct client companies through three businesses:
institutions through JPMorgan Asset Management, ultra-high-net-worth clients
through the private bank, high-net-worth clients through private client services, and
retail clients through JPMorgan Asset Management.
Treasury and security services
The treasury and securities services division provides transaction, investment and
information services that support the needs of institutional clients worldwide. JPMC is
one of the world's largest cash management providers and a leading global
custodian. This division operates through three sub-divisions: treasury services,
investor services and institutional trust services. The treasury services business
provides a variety of cash management products, trade finance and logistics
solutions, wholesale card products, and short-term liquidity management tools.
The investor services business provides custody, fund services, securities lending,
and performance measurement and execution services. The institutional trust
services sub-division provides trustee, depository and administrative services for debt
and equity issuers.
Corporate
The corporate division comprises private equity, treasury, corporate staff units and
expenses that are centrally managed. Private equity includes the JPMorgan Partners
and ONE Equity Partners businesses. Treasury manages the structural interest rate
risk and investment portfolio for JPMC. The corporate staff units include central
technology and operations, internal audit, executive office, finance, human resources,
marketing and communications, office of the general counsel, corporate real estate
and general services, risk management, and strategy and development. Other
centrally managed expenses include the firm's occupancy and pension-related
expenses, net of allocations to the business.
Commercial banking
The commercial banking division serves more than 30,000 clients including
corporations, municipalities, financial institutions and not-for-profit entities.
Commercial banking offers industry knowledge, experience, a dedicated service
model, and local expertise. Commercial banking operates in fourteen of the top fifteen
US metropolitan areas and is divided into three businesses: middle market banking,
mid-corporate banking and real estate banking.
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LEADING COMPANIES
United States - Retail Lending
Datamonitor (Published December 2008) Page 25
Key Metrics
Table 9: Key Financials: JP Morgan Chase & Co
Metric 2003 2004 2005 2006 2007
Revenues 33,191.0 42,738.0 54,248.0 61,999.0 71,372.0Net Income 6,719.0 4,466.0 8,483.0 14,444.0 15,365.0
Profit Margin 20.2% 10.4% 15.6% 23.3% 21.5%
Total Assets 770 ,912. 0 1,157,248.0 1,198,942 .0 1,351,250 .0 1,562,147.0
Total Liabi lit ies 724 ,758.0 1,051 ,595 .0 1,091 ,731 .0 1,235,730 .0 1,438,926 .0
Employees 96,367 160,968 168,847 174,360 180,667All in $ millions, except for employee numbers and margins
Source: Company Filings D A T A M O N I T O R
Figure 3: Revenues & Profitability: JP Morgan Chase & Co
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2003 2004 2005 2006 2007Year
US$Millions
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
ProfitMargin(%)
Revenues Net Income Profit Margin
Source: Company Filings D A T A M O N I T O R
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MARKET FORECASTS
United States - Retail Lending
Datamonitor (Published December 2008) Page 26
CHAPTER 7 MARKET FORECASTS
7.1 Market Value Forecast
In 2013, the United States retail lending market is forecast to have a value of $14,929
billion, an increase of 19.3% since 2008.
The compound annual growth rate of the market in the period 2008-2013 is predicted
to be 3.6%.
Table 10: United States Retail Lending Market Value Forecast: $ billion,
2008-2013
Year $ billion % Growth2008 12,516.7 -4.40%2009 12,434.8 -0.70%2010 12,430.1 0.00%2011 12,873.4 3.60%2012 13,852.8 7.60%2013 14,928.9 7.80%CAGR, 2008-2013: 3.6%
Source: Datamonitor D A T A M O N I T O R
Figure 4: United States Retail Lending Market Value Forecast: $ billion,
2008-2013
Source: Datamonitor D A T A M O N I T O R
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2008 2009 2010 2011 2012 2013
$
billion
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
%Growth
$ billion % Growth
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MACROECONOMIC INDICATORS
United States - Retail Lending
Datamonitor (Published December 2008) Page 27
CHAPTER 8 MACROECONOMIC INDICATORS
Table 11: United States Size of Population (million) , 2004- 2008(e)
Year Population (million) % Growth2004 293.02005 295.7 0.90%2006 298.4 0.90%2007 301.1 0.90%2008(e) 303.8 0.90%
Source: Datamonitor D A T A M O N I T O R
Table 12: United States GDP (Constant 2000 Prices, $ billion), 2004-
2008(e)
YearConstant 2000
Prices, $ billion % Growth2004 10699.02005 11033.1 3.10%2006 11370.0 3.10%2007 11620.2 2.20%2008(e) 11701.5 0.70%
Source: Datamonitor D A T A M O N I T O R
Table 13: United States Inflation, 2004- 2008(e)
Year Inflation Rate (%) % Growth2004 2.72005 3.4 27.40%2006 3.2 -4.70%2007 2.7 -16.40%2008(e) 2.8 2.20%
Source: Datamonitor D A T A M O N I T O R
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APPENDIX
United States - Retail Lending
Datamonitor (Published December 2008) Page 28
CHAPTER 9 APPENDIX
9.1 Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all
aggregated, analyzed, cross-checked and presented in a consistent and accessible
style.
Review of in-house databases Created using 250,000+ industry interviews and
consumer surveys and supported by analysis from industry experts using highly
complex modeling & forecasting tools, Datamonitors in-house databases provide the
foundation for all related industry profiles
Preparatory research We also maintain extensive in-house databases of news,analyst commentary, company profiles and macroeconomic & demographic
information, which enable our researchers to build an accurate market overview
Definitions Market definitions are standardized to allow comparison from country to
country. The parameters of each definition are carefully reviewed at the start of the
research process to ensure they match the requirements of both the market and our
clients
Extensive secondary research activities ensure we are always fully up-to-date with
the latest industry events and trends
Datamonitor aggregates and analyzes a number of secondary information sources,
including:
- National/Governmental statistics- International data (official international sources)- National and International trade associations- Broker and analyst reports- Company Annual Reports- Business information libraries and databases
Modeling & forecasting tools Datamonitor has developed powerful tools that
allow quantitative and qualitative data to be combined with related macroeconomic
and demographic drivers to create market models and forecasts, which can then be
refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused,
accurate and up-to-date
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APPENDIX
United States - Retail Lending
Datamonitor (Published December 2008) Page 29
9.2 Industry Associations
Consumer Bankers Association1000 Wilson Blvd., Suite 2500, Arlington, VA 22209-3912, USTel: 1 703 276 1750
Fax: 1 703 528 1290www.cbanet.org
9.3 Related Datamonitor Research
Datamonitor Industry Profiles
Global Retail Lending
Retail Lending in Asia-Pacific
Retail Lending in Europe
Retail Lending in the United KingdomRetail Lending in Germany
Retail Lending in France
Retail Lending in Japan
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