$$$. bank’s income portfolio fee based income - also called interest income a a accepting deposits...
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Bank’s income portfolio
Bank’s income portfolio
Fee Based Income
Fee Based Income
- Also called Interest Income- Also called Interest Income
AA
Accepting Deposits and Lending Loans at Different Interest Rates Accepting Deposits and Lending Loans at Different Interest RatesBB
Deposit Account Services ( Safekeeping, checking, etc) Deposit Account Services ( Safekeeping, checking, etc)
AA
Lending (Letters of Credit, Letters of Guarantees, etc)
Lending (Letters of Credit, Letters of Guarantees, etc)
BB
Trust Accounts (Wealth Management) Trust Accounts (Wealth Management)
CC
Fund based Income
Fund based Income
11
22
BANK’S INCOME PORTFOLIO
Fee Generating Income – new production methodsFee Generating Income – new production methods
Fee Generating Activities –Non traditional
Deposit Account Services (on line bill pay, ATMS)11
- Lending (Securitization, Servicing)
22- Cash Management
33
Investment BankingInvestment Banking
Securities BrokerageSecurities Brokerage
Merchant BankingMerchant Banking
11
22
33
AN INSIGHT TO FEE BASED INCOME
Investment banking…Investment banking…
Front Office
11MiddleOffice
22
BackOffice
33
Investment Banking work is
normally categorized into
3 segments
INVESTMENT BANKING
RESEARCHRESEARCH
SALESSALES
TRADINGTRADING
STRUCTURINGSTRUCTURING
-Sales job is to call on institutional and HNI investors to suggest trading ideas and take orders-Sales desk then communicate clients’ orders to trading desks-They price and execute trades-They also facilitate structure new products that fit a specific need
-Most profitable area-Responsible for majority of revenue-In the process of market making, traders buy and sell financial products-Golden rule followed by a trader ‘Buy Low Sell High’-The goal of a trader is to make an incremental amount of money on each trade!
-Reviews companies and writes reports-Generates no revenues- But its resources are used to assist traders and-Sales force in suggesting ideas to customers-In recent years this relationship has become highly regulated
-Relatively recent division-As derivatives have come into play, with highly technical and numerate employees working on creating complex structured products which typically offer much higher margins and returns than underlying cash securities
Front Office requires highest caliber employees in terms of intellectual capital and interpersonal skills.
Front Office requires highest caliber employees in terms of intellectual capital and interpersonal skills.
FRONT OFFICE
Risk ManagementRisk Management
Analyze the risk traders are taking on to the balance sheet in conducting their daily tradesAnalyze the risk traders are taking on to the balance sheet in conducting their daily trades
Setting limits on the amount of capital that they are able to trade in order to prevent bad trades having a detrimental effect to a desk overall
Setting limits on the amount of capital that they are able to trade in order to prevent bad trades having a detrimental effect to a desk overall
MIDDLE OFFICE
-Operations involve data checking trades that have been conducted-Operations involve data checking trades that have been conducted
-Involve most monotonous work at relative low pay-Involve most monotonous work at relative low pay
-Transacting the required transfers-Transacting the required transfers
-Ensuring that they are not erroneous-Ensuring that they are not erroneous
-Provides great job security-Provides great job security
BACK OFFICE
How can we facilitate banks make How can we facilitate banks make more more money…money…
TechnologyTechnology
Risk ManagementRisk Management
Developing marketsDeveloping markets
24x7 desks24x7 desks
Integration with other marketsIntegration with other markets
PLANNING
Research and developmentResearch and development
Product breadthProduct breadth
Currency breadthCurrency breadth
InnovationInnovation
Service at ‘door’ stepsService at ‘door’ steps
MARKETING
SelectionSelection
FlexibilityFlexibility
Any time / Any where facilityAny time / Any where facility
RelationshipRelationship
Strategy advice and guidanceStrategy advice and guidance
CUSTOMER SPECIFIC
Competitive priceCompetitive price
Quote speedQuote speed
SettlementSettlement
Liquidity managementLiquidity management
SKILL SPECIFIC
Simple Simple ‘Mantra’‘Mantra’
Close the Gap with Other Global MarketsAA
More End Points and Trading VenuesBB
Facilitate Right Technology DecisionsCC
Connectivity choices11
Lower latency22
Execution speed33
High bandwidth capabilities44
Flexibility55
Easier ‘last mile’ access66
Faster data feeds77
Automated & Algorithmic trading88
Higher messaging rates99
Throughput optimization 10
Stable global infrastructure11
Simple Simple ‘Mantra’ ‘Mantra’ continues…continues…
global market data11
messaging22
news33
history44
analysis55
Access to continuous stream ofAccess to continuous stream of
to ensure successful execution of trading strategies!to ensure successful execution of trading strategies!
Present Present dilemma…dilemma…
Quick connect with clients, brokers11
Receive orders over financial extranets22
Instant post or match orders33
Respond in milliseconds44
Increasingly nanoseconds55
In a nut shell, In a nut shell, facilitate…facilitate…
Efficiency11
Risk Reduction22
Cost Reduction33
Banks will make more money, Banks will make more money, for for sure!sure!
