Premium Essay

Bad Bank Podcast Analysis

In: Business and Management

Submitted By Samirc71
Words 848
Pages 4
BFIN 2123 Assignment

The banking industry crisis addressed in the “Bad Bank” podcast was primarily a “balance sheet” problem. In its most basic form, the dilemma that was faced and that served as a catalyst of the crisis was the inability of banks to cover their liabilities with their troubled assets. This led to an imbalance in the balance sheet where liabilities (initial capital and deposits) significantly exceeded assets (loans or foreclosed assets at a diminished market value) resulting, in many cases, in insolvency. The problem arose from unjustified lending practices which led to unqualified consumer mortgages that were defaulted upon, leading to the inability of deposits and capital to match the foreclosed assets which had a diminished value compared with that of when the loan was commissioned. Furthermore, the perception of the banks and federal government that the market was nearing a turnaround led to a cyclical worsening of the crisis since balance sheets sustained an inflated market value of the toxic assets as the government was slow to intervene while allowing the banks to continue this inaccurate accounting practice. Federal initiatives such as TARP would only serve to defer the burden from the banks to the taxpayers, thus contributing to the severe financial crisis faced in 2008. The Citibank and hypothetical “dollhouse” examples both demonstrate the aforementioned erroneous balance sheet issues. The former displays how a major player in the banking industry reported its capital at fifteen times the value set forth by the market according to the value of its outstanding shares, while the latter conveys the issue on a far more simplistic single transaction scale. In both cases, the unwillingness of both the banks and government to recognize current market values, while expecting values to rise towards previous levels, exacerbated the problem…...

Similar Documents

Premium Essay

Industry Analysis on Axis Bank

...Michael Porter’s Five Forces Model Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit. In case of Axis Bank, according to us, the Porter’s Five Forces Stands as shown below: | Weak | Neutral | Strong | Fierce | Industry Rivalry | | | | | Supplier Bargaining Power | | | | | Buyer Bargaining Power | | | | | Threat Of New Entrant | | | | | Threats of Substitute | | | | | Industry Rivalry Industry rivalry means the intensity of competition among the existing competitors in the market. Intensity of rivalry depends on the number of competitors and their capabilities. In case of Axis bank, we have found that this particular parameter is fierce. Since March 2002, Bankex (Index tracking the performance of leading banking sector stocks) has grown at a compounded annual rate of about 31% as shown below. After a very successful decade, a new era seems to have......

Words: 1175 - Pages: 5

Premium Essay

Comparative Analysis of Pnb Bank

...CHAPTER-I 1 INTRODUCTION 1.1 Introduction of bank Bank is a financial institution which deals with other’s people money i.e. money given by the depositors.The establishment authorized by a government to accept deopsits,pay interests,clear checks,make loans,act as an intermediary in financial transactions,and provide other financial services to the customers.The roots of banking can be treated to the earliest civilizations.The Egyptians and early societies of the Middle East developed the prototype upon which modern banking is based.Agriculture commodities were stored in granaries operated by the government, and the records of deopsits and withdrawls were manitained. The name “bank” comes from the italian word ‘banco’.A banco was a table covered in green cloth where moneylenders completed their transactions in the marketplace.Those are preety humble beginnings for a major industry.Banking is a key component of the global financial system. Most large banks are now global in nature, with offices in all key financial centres, from New York to London to Hong Kong and have the power to influence the economies of countries around the world no matter how large, as seen during the recent financial crisis. According to Robert Frost, ‘‘bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins . Introduction to the Indian Banking industry in historical prespective. 1.2 Indian Banking in......

Words: 5074 - Pages: 21

Free Essay

Bad Dreams-Poetry Analysis

...http://www.warpoetry.co.uk/Afghanistan_War_Poetry.html Bad Dreams When you send a lad away To a foreign hot land To fight in a war he doesn’t understand When he comes back He brings more than just a tan He’s probably not ok He’s probably not all right He’s probably in a dark place Whether it’s day or night Governments and Media With their pack of lies Will never tell the truth But try to convince you otherwise It feels like my eyes Have been stretched wide open Now and then I have trouble coping Images of memories Imprinted on my mind The boy they knew before Is what they’ll never find Alex Cockerill, 2010 The central meaning behind this poem is that a soldier is trying to describe that what he’s seen and experienced in war has changed him, battered him. It explains in the poem with the third and forth stanza; “Governments and Media, With their pack of lies. Will never tell the truth, But try to convince you otherwise. It feels like my eyes, Have been stretched wide open. Now and then, I have trouble coping.” about how he’s having trouble dealing with what he’s had to do. He feels that what his beliefs were when he first began, were misguided and not wholly truthful. Mr. Cockerill used forms of irony and metaphors to explain his thoughts. He described being in the dark, whether it was day or night, an ironic statement showing how alone he feels. He explains that he feels that his eyes have been stretched open wide open; an example of......

Words: 487 - Pages: 2

Free Essay

Analysis: Delivering Bad News

...Delivering Bad News Analysis I chose to analyze a news conference that was given by Mayor Bing of Detroit on December 1, 2011. The purpose of the conference was to address the current state of the city’s financial crisis and reports that the State of Michigan is coming in to do a financial review. I will evaluate the physical aspects of the speech, including appearance, chosen location, and body language. I will also evaluate the content of Mayor Bing’s speech and give my opinion on whether or not he appropriately addressed the crisis at hand. Mayor Bing wore a professional, navy pin-striped suit with a crisp white collar and a lighter blue tie. What we wear can project or evoke different emotions. According to Carole Kanchier of the Huffington Post, some of the things blue represent are authority, structure, communication, dependability, trust and loyalty (Kanchier, 2012). These are all emotions that Mayor Bing needs his audience to feel for his message to be succesful. To further his authority Mayor Bing stood behind a podium that had the Seal of the Mayor clearly displayed on its front side. He also chose not to stand alone. Standing with him were members of the Detroit City Counsel, Labor Board, people he refered to as the faith-based community, and members of the Detroit business community. I believe the purpose of this was to show that he was not in this crisis alone and that he had the communities support. I’m sure by including these people with him......

Words: 934 - Pages: 4

Premium Essay

Bank Statement Analysis

...Orrstown Bank vs. DNB Financial Corporation Orrstown Bank Financial Statement Analysis In this assignment, we focus on Orrstown Financial Services vs. DNB Financial Corporations. Both institutions have similar financials and sizes of entities. The first part of the assignment is about, studying both institutions and compare them to each other. After that there will be an analysis and general study about the health of ORRF as an overall entity. All data are taken from UBPR reports, 10 k reports, Bloomberg, Yahoo, and Banks main website Common Size Net Income Statement This section of the analysis is about computing common size income statement for both ORRF and DNBFC. It seems that ORRF net income have decreased in value and resulted in huge loss in 2012 as (-63%) of net revenue. This dramatic change of the net income value started in 2011 due to the real estate low prices that have been an issue since the financial crisis started. This conclusion is supported by looking at the provision of loan losses that increased in 2011, showing the cause of the huge net loss.  On the other side, DNBFC provision for loan losses have increased reasonably in 2008 to become (10%). In addition, the net income increased steadily after 2008 too. It appears, so far, from the Net Income Statement that DNBFC is doing much better than ORRF. Common Size Balance Sheet Statement Based on the common size balance sheet statement of ORRF, we can see that the total loans used to be very high......

Words: 3071 - Pages: 13

Premium Essay

Bank Analysis

...Introduction Commercial Bank of Ceylon Limited commenced its operation in Bangladesh by acquiring the Bangladesh operations of Credit Agricole Indosuez (CAI) in 2003. The high performance of Commercial Bank of Ceylon Limited is a reflection of the qualities and attributes that has been accepted by people advocating good management practices in the corporate sector. The event marked the first ever acquisition of multinational bank by a Sri Lankan bank and is a direct consequence of Commercial Bank of Ceylon Ltd’s continued commitment towards business expansion. The bank possesses a strong corporate clientele and it has set its vision to be a strong regional bank providing superior personal banking services. CBC was adjudged the Best Bank in Sri Lanka for 8 consecutive years up to 2006 by the ‘Global Finance’ Magazine based in US and for 5 consecutive years up to 2005 by ‘The Banker’ magazine based in UK. In Sri Lanka, Commercial Bank of Ceylon Ltd. is known as the largest and fully networked banking environment provider. The bank enjoys the reputation of having an unrivalled employment of information technology and a very reliable ATM network around the country. In his report Managing Director of the bank remarked that the Bank's new Vision places a premium on having a strong international presence by 2011. After outperforming its peers in the home country, the bank is now in Bangladesh to continue with its legacy of success. While emphasizing social responsibility and......

Words: 7585 - Pages: 31

Premium Essay

Hdfc Bank Analysis

...COMPANY ANALYSIS INTRODUCTION The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC Bank is one of the Big Four banks of India, along with: State Bank of India, ICICI Bank and Punjab National Bank. Mission statement: HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values - Operational Excellence, Customer Focus, Product Leadership and People. PRODUCT VERTICALS HDFC Bank offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers. The bank has three key business segments: 1. Wholesale Banking Services ...

Words: 3201 - Pages: 13

Premium Essay

Bad Customer Service Analysis

...CONTENTS I. Introduction about customer service 3 II. Summary of John Lewis case study 4 (A good customer service) III. A bad customer service: VNPT's Internet Operator 7 A. Company's overview 7 B. Analysis of the case and causes 8 1. The registration procedure 8 2. The level of staff and technicians 9 3. The attitude of the staff operator 10 C. Recommendations 12 IV. Conclusion 14 V. References 15 Introduction about customer service Customer service is the way a business looks after its customers. According to Turban et al. (2002), "Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer expectation". Customer service has to be a team effort and not just the responsibility of employees who deal with the public directly. Providing good customer service is a vital part of managing a business. Most customers have the option to go elsewhere if the quality of customer service is lacking. On the other hand, good customer service is a source of competitive advantage. Good customer service leads to customer satisfaction. Satisfied customers are more loyal and profitable. Dissatisfied customers take their money elsewhere – and tell their friends about the poor service they have received. A good customer service bring a lot of benefit to the company if they have one: increasing sales, customer loyalty, enhanced public image, more effective workforce...

Words: 1890 - Pages: 8

Premium Essay

Td Bank Analysis Project

...Bank Analysis Course Project: TD Bank and Royal Bank of Canada Management of Financial Institutions MAY11 Sec A Professor: Paul Tovbin June 19, 2011 Dalila Springer 973-223-1204 Introduction to Banks: TD Bank, (“TD”), is known as America's Most Convenient Bank. It is one of the 15 largest banks in the U.S., with approximately 23,000 employees and deep roots in the community dating back more than 150 years. The Bank offers a broad array of retail, small business and commercial banking products and services to more than 6.5 million customers through its extensive network of more than 1,000 retail locations throughout the Northeast, Mid-Atlantic, Florida and Metro D.C. TD Bank Financial Group (TDBFG) is a Canada based bank. The bank through its subsidiaries provides retail and commercial banking, wealth management, and wholesale banking products and services in North America and internationally. The bank is a retailer of financial services in metropolitan New York, Metropolitan Philadelphia, metropolitan D.C., Southeastern Florida, New Jersey and Connecticut. TDBFG offers its financial products and services to around 18 million customers through its four businesses namely, Canadian Personal and Business Banking, Wealth Management, Wholesale Banking and the US Personal and Commercial Banking. TDBFG is headquartered in Ontario, Canada. Royal Bank of Canada, (“RBC”), and its subsidiaries operate under the master brand name RBC. It is Canada’s largest bank as measured...

Words: 2358 - Pages: 10

Premium Essay

Analysis on Bank

...Sumons INTERNSHIP REPORT ON “Foreign Exchange Activities” of Jamuna Bank Limited at Malibagh Branch,Dhaka Date of Submission April, 2011 STAMFORD UNIVERSITY BANGLADESH INTERNSHIP REPORT ON “Foreign Exchange Activities” of Jamuna Bank Limited PREPARED FOR .................................. .................................. ................................. ................................. PREPARED BY Lutfur Nahar ...................................... Batch: ............................... Program: BBA (Major in Finance) Date of Submission April, 2011 STAMFORD UNIVERSITY BANGLADESH Letter of Transmittal April, 2011 Md. Nur Alam Siddik Senior Lecturer Department Of Business Administration Stamford University Bangladesh Subject: Submission of Internship report on “Foreign Exchange Activities of Jamuna Bank Limited”. Sir, I am honored and pleased to have such a creative report paper which has given me immense pleasure and enhanced my educational knowledge beyond my limit. While preparing this report paper, I had the unique opportunity to deliver my ideas, thoughts, plans as well as myself. I have tried to give my best to follow your instruction, Schedule, Format and Suggestion in every step of our writing. Thanking you and expecting to get cordial acceptance from you. Sincerely yours _____________ Lutfur Nahar Id:03411502 Batch:34-D Major In Finance Stamford University Bangladesh Declaration......

Words: 11459 - Pages: 46

Premium Essay

Ratio Analysis of Brac Bank

...Internship Report on “An Analysis of Financial Performance of BRAC Bank Ltd” Supervised By: Sk. Habibur Rahaman Senior Lecturer Manarat International University Prepared by: Al Sukran ID-1413MBA50346 Manarat International University Department of Business Administration Manarat International University Date of Submission: January 30, 2015 Internship Report on “An Analysis of Financial Performance of BRAC Bank Ltd” Supervised By: Sk. Habibur Rahaman Senior Lecturer Manarat International University Signature of Supervisor Prepared by: Al Sukran ID-1413MBA50346 Manarat International University Department of Business Administration Manarat International University Date of Submission: January 30, 2015 LETTER OF TRANSMITTAL January 30, 2015 To Sk. Habibur Rahaman Senior Lecturer Department of Business Administration Manarat International University Subject: Submission of Internship Report on “An Analysis of Financial Performance of BRAC Bank Ltd” Dear Sir, With due respect to state that I am AL SUKRAN, ID-1413MBA50346 is a student of Masters of Business Administration of Manarat International University. I am delighting to submit here with a copy of internship report for your kind evaluation and appreciation. I have given my best effort to prepare the report with relevant information that I have collected from BRAC BANK LTD and from other sources during my internship......

Words: 7954 - Pages: 32

Premium Essay

Orrstown Bank Analysis

...Abstract 3 Return on Assets Analysis 3 Return on Common Equity Analysis ….11 Ratio Analysis 16 ORRF’s management issue 26 Conclusion 30 Annex 31 Reference 34 Abstract In this paper, we are engaged in deepening our analysis on the Orrstown financial services Inc. (ORRF). First, we analyze the ORRF’s profitability by using two major indicators; the rate of return on assets (ROA) and the rate of return on common share holder’s equity (ROCE). ORRF’s ROA is compared with its industry ROA. Also, to deepen our understanding about the difference and the changes over time, we disaggregate ROA into the profit margin and the total asset turnover. Then, we evaluate ORRF’s ROA from three elements; economic and strategic analysis, profit margin analysis and asset turnover analysis. Finally, we calculate ORRF’s ROCE and evaluate its performance. Also, we examine ORRF’s capital strength by using several indicators, including Tier 1 capital ratio, Tier 2 capital ratio and Total capital ratio. Second, to perform ratio analysis on ORRF, we scrutinize our CAMELS (Capital adequacy, Asset quality, Management, Efficiency, Liquidity and Sensitivity) analysis which we reported on our first paper. We compare a lot of ratios representing ORRF’s CAMELS with those of ORRF’s peer group. Due to data availability, we continue to use UBPR report prepared by the Federal Financial Institutions Examination Council. Therefore, strictly speaking, we actually compare Orrstown bank, ORRF’s fully owned......

Words: 7410 - Pages: 30

Premium Essay

Brac Bank Ratio Analysis

...Performance Evaluation of BRAe Bank Limited Internship Report On Performance Evaluation of BRAe Bank Limited Prepared for: Dr. Tanbir Ahmed Chowdhury Professor Department of Business Administration East West University Prepared by: Rezwana Sharmin Id # 2007-1-10-114 Department of Business Administration Date of Submission: 25 April, 2011 25 April, 2011 Mr. Dr. Tanbir Ahmed Chowdhury Professor Department of Business Administration, East West University. Subject: Submission of Internship Report Dear Sir, With due respect I would like to inform you that I have completed my internship program in BRAC Bank Limited, Head Office, Gulshan-l, Dhaka - 1212, and prepared my internship report titled "Performance Evaluation of BRAe Bank Limited". I am placing my internship report to you as a requirement of the BBA Program The internship program and writing this report has been a great pleasure and an extremely interesting and rewarding experience. It has enabled me to get an insight into the practical arena of Banking. Sincerely yours, Rezwana Sharmin Id # 2007-1-10-114 Acknowledgement The successful accomplishment of this Internship Report is the outcome of the contribution and involvement of a number of people, especially those who took the time to share their thoughtful guidance and suggestions to improve the report. First of all I am grateful to Almighty Allah. Then I would like to express my gratitude to my Internal Internship Supervisor Mr. Dr. Tanbir Ahmed Chowdhury,......

Words: 14933 - Pages: 60

Premium Essay

Bank of America Case Analysis

... | |Bank of America | | | | | |Name | |University | | | | | Bank of America Identification of Strategic Issues and Problems The Bank of America operates in an industry marked with rapid changes, the financial crisis and evolving technology. There are two challenges faced by Bank of America at this point. For the long term, the Bank faces a challenge in positioning itself. This is because mobile banking is evolving rapidly and could have a significant influence not only on Bank of America but also the whole......

Words: 1122 - Pages: 5

Free Essay

Bb&T Bank Analysis

...BB&T BANK ANALYSIS REPORT FINA 280 FINANCIAL INSTITUTION MANAGEMENT & MODELING William C. Handorf, Ph.D. June 28, 2008 Washington, DC Content 1. INTRODUCTION ………………………………………………..…………………3 2. BB&T ……………………….……………………………………………………….4 3. US ECONOMIC OVERVIEW ……………………………………………………12 4. BB&T Bank …………...……………………………………………………………14 5. Conclusion…………………………………………………………………………..41 6. Questions to Management………………………………………………………….42 1. INTRODUCTION The purpose of this report is to analyze the financial operations and financial conditions of BB&T Bank by evaluating financial, economic and market information available for the period from 2000 to 2008. This paper attempts to address key strengths and weaknesses of the bank from a regulatory, financial, and credit market perspective. In order to make assessments and calculate required ratios, statistics and correlations, we mainly review the Uniform Bank Performance Report (UBPR) of the bank and publicly available financial data. Besides BB&T Bank the paper also attempts to analyze the performance of the holding company, BB&T Corporation (NYSE: BBT).  Section 2 briefly overviews the holding company - BBT - and its financial analysis. Section 3 provides an overview of the US economy as a backdrop to the financial performance of the bank. Section 4 uses the CAMELS methodology (Capital, Asset Quality, Management, Earnings, Liquidity and Sensitivity) to identify the key strengths and weaknesses of the bank.......

Words: 7064 - Pages: 29