Bank of America

Banking Industry Analysis

Thomas L. Lowther III


May 23, 2011
Chuck Andre
Banking Industry Analysis

      Banking is an important industry that not only serves people on a personal level, but also the United States in a global economy.   The highly regulated and volatile banking industry is due to the success of different companies across America.   Banks recently have been the backbone of a recession and have held their ground during a time of low earnings nationally.   By looking at some of the larger banks in America, these are what we see as trends in today’s society.   These trends seem to be prevalent in each bank and these trends even delve into the mid-cap banks.   The five giants in the industry are The Bank of America, J.P. Morgan Chase, Citigroup, Wells Fargo bank, and Sun Trust Bank (The Bank Stress Test, 2011).   Compared to the market, banks have earned better returns and have provided their shareholders more during this last recession.   This is an indicator that this industry is doing well and will continue to be profitable.

      The banking industry is becoming more competitive as it moves further into the 21st century.   A bank’s main objective is to control the territory it occupies.   The only problem with this is that there is no limit to real estate that these banks can work with.   The geographical trend with banks is that they are starting to look for more territory in which to do business.   A bank such as Compass, which is a mid-cap bank, was originally doing business in southern states such as Alabama, Tennessee, and Georgia.   Since there is very much competition around this area, and with large banks such as SunTrust gobbling up customers, banks such as Compass are looking elsewhere such as Texas and Colorado to find areas in which it can operate and control.   The big banks in the system are acquiring small banks in a process known as consolidation to allow each more area to work in.   This has been a huge...