Conference call 02/21/2011

Today is our first day to start talking about fundamental aspects of the six companies we follow. Team members like me got excited because of the enthusiasm we have on knowing how exactly a business is like. Today's topic is about the Consumer (Retail) Banking sector and we discussed about the basic activities in it and how we see the trend  is going. Although we need to save part of our detailed discussion for the coming reports, below is the post we have on our intranet site and I'd like to share it here to our readers.


Conclusion after discussion:

For our 6 financial companies, below is the portion of their Consumer (Retail) banking business:

JPM: Retail banking 19.2%, first
Citi: Consumer banking 30.1%, second after Sales & Trading
HBAN: included in Regional banking
UMBF: N/A
CCBG: included in Retail banking in Capital City Bank
EFSC: N/A

Due to the unavailability of statistical number so far, we couldn't observe the past trend of the sector. But Hamza pointed out that there's a transformation from retail banking to other services such as invest banking, possibly because of the high profit margin and relatively low cost.

We don't think the retail banking sector will disappear given the fact that individuals still need to save and borrow. Thus this business might the largely adopted by many regional banks such as UMBF and EFSC, which creates the opportunity for these small banks to either enter a new business or expand their current one to serve customers locally.



Please comment with your suggestion or whatever you think about this. I hope you will find this threat useful and we will keep posting our morning discussions here.

-- Chang