Investment Banking
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Transcript of Investment Banking
US Banking Performance and
Bonus Controversy
Presented by: Praful Anchaliya
Primary roles of Bank Goods and services
o Central Banko Depository credit intermediation
Industry organizationo Commercial bankso Savings banks and savings and loan associationso Credit unionso Federal Reserve banks
Working Conditions Hours
o 2008- A non supervisory works for 36.2 hours week.2008- 8% of employees, mostly tellers, worked part time.Support staff work a standard 40-hour week.
Work environmento Commercial and mortgage loan officers often work out
of the office.o Safe Place to work o Some of employees are located primarily at the
headquarters or other administrative offices.
Employment Employment
o 2008- Industry employed about 1.8 million wage & salary workers
o 74 percent of jobs were in commercial banks
o Mostly bank branch offices employed 38 percent of all employees.
Quarterly Net Income
Net Interest Margin
Factors of Change
Industry Consolidation Continues
Number of Banks Failure
Housing Inventories
Salaries and BonusJob Title Average
($)Salary Range
(‘000s)BonusRange
Teller 20660 16-24 37-2000
Branch Manager 51088 42-70 6k-12k
Personal Banker 30269 27-35 280-6k
Credit Analyst 52344 40-66 1500-5500
Portfolio Manager 74286 50-110 9k-40k
Assistant Vice President
78750 57-110 2500-30k
Vice President 97850 72-125 12-24
Relationship Manager 82833 40-105 12-36
Bonus facts Citigroup, Merrill Lynch and seven other US banks paid $US32.6
billion in bonuses in 2008 while receiving $US175 billion in taxpayer funds under the Troubled Asset Relief Program
Citigroup and Merrill Lynch suffered losses of more than $US27 billion at each firm ,Yet Citigroup paid out $US5.33 billion and Merrill $US3.6 billion in bonuses.
Bonuses averaged $US160,420 for Goldman Sachs's 30,067 employees, compared with $US13,580 at Bank of America, employer of 243,000 people.
Bonuses averaged $US95,286 per employee at Morgan Stanley, $US61,017 at Merrill Lynch and $US38,642 at JPMorgan Chase & Co., which operates large retail and investment banking units.
Conclusion Example: In the case of Washington Mutual fund , the FDIC
stepped in to secure the good assets and deposits, puts these assets into a new company and then sells off those assets to a stronger financial institution.
Washington mutals fund’s good assets and deposits were sold to Jamie Dimon of J.P. Morgan.
EXAMPLE: - Last quarter, Citigroup announced that they will
be splitting up their business to Citigroup Holdings Corp. and Citicorp.
- Both of these companies still operate under the Citi name for the time being, but it allows them to be spun off or sold off easier in the future.
- Citigroup Holdings Corp. would be the entity that would be spun off into the “bad bank” structure if the government chose that route.
Thank You