Tag: Banking Strategy

Economy

Trends that lead to lower growth, lower profits and lower volatility for banks than during the past few decades | Deutsche Bank

Colin Henderson

This paragraph from the report below, succinctly summarises the growth prospects for Banks, and the backdrop to planning. Again, a plan that looks like the plan for 2007 is destined to fail. This is the time for breakout product design, and a dramatic cost reduction through shift to reliance on internet and online banking for a far greater breadth of service delivery. Global banking trends after the crisis | Deutsche Bank Research Lean years lie ahead for US banks. Performance improvements during the last 15 years have often been due to strong lending growth and low credit losses. As private … Continue reading Trends that lead to lower growth, lower profits and lower volatility for banks than during the past few decades | Deutsche Bank

Business Models1 Comment

Conservatives propose radical changes to banking regulation in UK

Colin Henderson

There are some dramatic proposals contained in the upcoming white paper from the Conservatrive opposition [UK] this week. They make sense and go to the core of the flexibility that allowed banks to become too speculative. They address leverage, and the investment banking/ retail banking integration challenge. The Conservatives are larely expected to win the next election, sometime in the next 12 months. Tories say break up the big banks | The Times He will be clear, however, that the Bank should have powers to order banks and other financial institutions to hold more capital when times are good, so … Continue reading Conservatives propose radical changes to banking regulation in UK

Business Models

“Even though we were in and looking you still couldn’t see [where the bottom was]” | KKR

Colin Henderson

Listening to this interview is interesting and sobering for banks. The highlighted quote below tells all. Henry Kravis and George Roberts (KKR) | FT Interview FT: How do you see the opportunities that have been thrown up by this incredible dislocation? Is the government a good partner for KKR? HK: We looked at quite a few of the banks over time and we turned them down because we couldn’t see what was in the banks. Even though we were in and looking you still couldn’t see [where the bottom was]. I think there may be some programmes where it will … Continue reading “Even though we were in and looking you still couldn’t see [where the bottom was]” | KKR

Business Models

We will not hear about bricks and clicks after this recession

Colin Henderson

Deloitte pick up on an interesting characteristic of banks here. Cost cutting occurs during downturns, but its spend spend spend when things are looking good. Banks rarely get to the point of incremental efficiencies that they note here. Citi are a classic example as noted in the FT this morning. This fits with the view that this change we are undergoing is not just another blip before we return to business as usual. There is no business as usual coming. The future is smaller, framed in different business models, contains a greater mix of small business, and smaller companies and … Continue reading We will not hear about bricks and clicks after this recession

Canada

Speculation mounts about Virgin next move for banking in Canada

Colin Henderson

There appears to be little more than speculation, and floating of ideas here, but nonetheless Virgin have just announced intention to launch a direct bank in UK, and Branson has noted his broad intention to get more involved in financials services. Something to keep our eyes on.  A move such as this is good for financial services, and good for the broader industry including system vendors, such as my friends at SIT, because any new set up will need the flexibility of a web based approach coupled with solid banking and investment systems. Virgin’s next chapter: Is now the time … Continue reading Speculation mounts about Virgin next move for banking in Canada

Business Models

What does recovery mean for Banks?

Colin Henderson

Banks are at the centre of the economy.  Business and consumers conduct their day to day business using money and they do this through banks.  Stating the obvious you may say?  This is why I study the economy so closely and try to understand how it will look in the future, because that has a direct relation to how banks will look in that future. We are in a crisis of debt.  It is a debt crisis because consumers and businesses are over-leveraged.  Their debt is too high relative to todays asset values.  Asset values have decreased by 25 – … Continue reading What does recovery mean for Banks?

Uncategorized1 Comment

The flaw in the House Financial Services hearings \ misalignment on the paradigm

Colin Henderson

The hearings are going on this morning in Washington. After my rant about Wells Fargo yesterday, it is clear to me that apparently ill timed newspaper ad on the weekend was in fact timed to coincide with these hearings. I still think it was ill timed though. Listening to the introduction today from Barney Frank, Chairman and the commentary on CNN, the general view is that Banks are receiving money, using it for perks and not working on “getting the economy back to working again”. On the other hand the banks are listing off how they are increasing lending, keeping … Continue reading The flaw in the House Financial Services hearings \ misalignment on the paradigm