Industrial Banks By Nana Soumano

HISTORY Industrial banks are a financial institution with a limited scope of services, which sell certificates that are labeled as investment shares and also accept customer deposits. They then invest the proceeds in installment loans for consumers and small businesses. These banks are also known as Morris banks or industrial loan companies. Industrial banks differ from commercial lenders because they accept deposits.

American Express Centurion Bank American Express posted a net income of $4.1 billion from its total revenues of $7.8 billion. The company’s primary source of revenues is the discount fee charged to merchants who accept its cards. These fees are charged as a percentage of the charge amount processed for the merchant and account for 65% of the company’s revenues.

GE Capital Bank GS Bank is a New York State-chartered bank and is supervised by the New York State Department of Financial Services, the Federal Reserve Bank of New York and the Consumer Financial Protection Bureau. GS Bank is a member of the Federal Reserve System and the Federal Deposit Insurance Corporation (”FDIC”), which insures deposits up to certain limits, (gsbank.com). Most of GE Capital’s commercial loans are to small and mid-sized companies, spread across multiple industries and geographies and secured by tangible assets. More than 70% of GE Capital’s loans are under $100 million. GE Capital's consumer lending activities are also diversified by product and geography, and include operations in 55 countries. GE Capital Finance earnings declined to $2.3 billion and $8.6 billion in 2009 and 2008, respectively, in a challenging economic environment, including disruptions in capital markets, challenging credit markets and rising unemployment. The 2008 Financial Crisis, had a sizable effect on GE, since the company usually generates nearly a third of its revenue from GE Capital Services, the company's financing arm.

UBS Bank USA The U.S. Office of Public Policy at UBS Americas serves as a link between the public and private sectors, and manages the relationships between UBS and the U.S. federal government. U.S. Bancorp, which is NYSE:USB is the nation's 6th largest bank. The bank offers loans, credit, and insurance products to consumers primarily in the Midwestern and Western United States. USB competes against large banks such as Bank of America, as well as regional banks such as Regions Financial Corporation. The 2008 Financial Crisis had benefit USB as it profited during the crisis, as it made $260 Million in Q4 08 and $2.95 Billion for the year. U.S. Bancorp reported earnings of 34 cents per share during the first quarter of 2010. Revenues were $4.3 billion, up 11.3% year over year, reflecting growth in interest income and fee income as a result first quarter 2010.

CONSUMER MARKET DATA Customers are taking more control of their financial relationships, and this trend is unlikely to change. By 2030, banks will deepen their personal connections with customers via data analysis techniques that might seem fantastic by today’s standards. Demographics will drive the future of banking. Forecasts indicate that global inhabitants will surpass 8 billion by 2030, a population that will be ever more elderly. New banking business models will be needed to serve this aging, and increasingly urban, demographic.

CONSUMER MARKET DATA CONT. Technology is changing the payments segment of the banking industry at an extraordinary rate. Competition from non-bank Payment Service Providers (PSPs) offering services such as mobile banking. Customer demand for quicker, cheaper, anytime/anywhere payments. More transactions managed through exchanges affected by regulation of over-the-counter derivatives.