City Bank and Bank of America - Essay Example

ID number: Portfolio Part 3 – Company Research Citi Bank I have selected bank for few major reasons which are as follows. 1) It is one of the reputed banks in the country as well as in the international financial market. 2) This bank is very much concerned about the financial soundness of its employees and 3) City bank offers such kind of professional career which provides a lot of opportunities to its employees for expanding their skills and achieving their goals. The company is providing world class benefits which are enough to meet anyone’s need and exceed the level of expectation. City bank is a famous financial service organization which has spread its business activities throughout the world. It is the consumer banking division of multinational City group. The main location of this bank is at New York in United States. It has almost 983 North American branches which are concentrated in major metropolitan areas in US and these areas are New York, Chicago, San Francisco, Washington D.C., Boston, Philadelphia, Los Angeles etc. Again the bank has spread its business activities in more than 36 countries. City bank has occupied 3, 777 branch locations across the globe. It is the largest bank in United States by total assets and this bank is followed by Bank of America and JPMorgan Chase. More than 2, 00, 000 employees are involved in this organization. The offered products of this company are investment banking, corporate banking, wealth management, credit cards, consumer banking, financial analysis, private equity etc. Again the bank also offers mortgage and loan facilities to its customers. Major competitors of this organization in US are JPMorgan Chase and Bank of America. Generally middle and high income groups are the target customers of City Bank. Again the bank has plenty institutional clients and major percentage of revenue is earned from this segment. The bank has two major segments for conducting its operational work. These segments are global consumer banking and institutional clients group. Global consumer banking segment generally provides retail banking services to more than 100 million people in 40 countries of the world. 50 % of total revenue of this organization is generated from this retail banking segment and deposit of this segment consists 40 % of total deposits (Citigroup, 2013). As per the statistical report, this can be said that the organization is going to achieve 5.6 % growth rate in the upcoming year. Again this can be said that as it is the largest bank in US so it has gained the maximum market share i.e. 35 % of total market through its business activities. This can be observed that there is a significant brand value of this organization in the global market. They maintain exclusive and highly detailed brand profile and use unique brand comparison tool to access the brand equity. Describing about the growth potentiality this can be said that City bank has faced less growth opportunity in the emerging markets as the bank has already captured the maximum shares of those markets such as US. Now this can be observed the there are high growth potentiality of this company in the developing markets such as India. Again the growth of emerging markets is depending on the highly attractive investment opportunities which are quite difficult to provide by this organization to its customers (Nair, 2012). High amount of capitalization is required for getting more sustainable growth in this market. So it would be better to expand the business activities in developing markets to get more percentage of profitability in business. This bank has recently launched a debit card program and also going to launch a different kind of credit card for the Asia Pacific region. This credit card will mainly focus on the middle income segment and priced at a premium to match with the company’s existing products or services. This bank is continuously investing on talent, technology and new products for more customer acquisition and business expansion (PR Newswire, 2014). Bank of America I chose Bank of America as it is one of the pioneer financial service organization in United States as well as in the whole world. The organization is very much concerned to increase the skill and talent among its employees. Job security is one of the major aspects which will attract most of the qualified job seekers towards this organization. The diversified working culture is another reason which comply me to select this organization. Bank of America is the 2nd largest financial service organization in US after the City bank. It is a reputed American banking service organization headquartered in North Carolina. This organization offers a wide range of financial products and services to its customers. These products are private banking, mortgage loans, investment banking, consumer banking, corporate banking, private equity, wealth management, finance and insurance etc. Approximately 2, 50, 000 employees are working in this worldwide organization. In the year 2010, Forbes announced the Bank of America as the 3rd largest organization in the global market. The bank has expanded its operational and business activities in more than 50 states of US and also in more than 40 other countries of the world. Major competitors of this organization in US market are City Bank, Wells Fargo and JPMorgan Chase. This company is holding 12.2 % of total deposits of US market in the current year. All types of customers are getting facilities from this organization. Consumer banking is one of the largest division of this organization which provides financial services to small business enterprises and other customers of the country. Global wealth and investment management division manages assets of institution and individual customers. Again the organization is involved in international operations and provides services to huge number of NRI customers (BANK OF AMERICA, 2014). Average annual revenue growth rate of Bank of America is -2.1 % which is not satisfactory and management of this organization should concentrate more about this fact. Again this can be observed that management of this company has taken initiative to improve the condition of global payment system and for that reason they are concentrating on the fact of global payment trend. They are going to implement such kind of system which may change the landscape of global commerce and the process of disbursement. The company is going to invest more than $ 70 million in their e-commerce activities during next six months. They are going to introduce internet facilities in their branch offices and call centres. Again this can be said that management of this organization has decided to invest more than $ 25 million for developing their brand image. The company is accelerating investment in the card and payment businesses. As per the recent news, Bank of America may take an additional $ 2 billion charge in the 3rd quarter in the current financial year related to mortgage security litigation. The bank is going to deal with the US Department of Justice to pay more than $ 16 billion for the purpose of investigation on such kind of activities which are related with financial crisis (The Economic Times, 2014). The company has acquired Hendrick Automotive Group and as per their recent annual report they can be said that management of this company is going to increase the amount of stock dividend in the current fiscal year. They are paying dividend for common stock to $ 0.05 from $ 0.01 per share. It can be observed that Bank of America has increased its quarterly common stock dividend for the 1st time in seven years (BANK OF AMERICA, 2014). Works Cited BANK OF AMERICA. Bank of America Announces Investment, Productivity Initiatives. July 28, 2014. Web. August 8, 2014. PR Newswire. Citibank Enjoys Largest Market Share Among Major U.S. Banks. Oct 24, 2014. Web. Aug 8, 2014. The Economic Times. Bank of America may record $2 billion charge in third quarter: Analyst. Aug 7, 2014. Web. Aug 8, 2014. BANK OF AMERICA. Bank of America Increases Quarterly Common Stock Dividend to $0.05 per Share. Aug, 6, 2014. Web. Aug 8, 2014. Citigroup. 2013 Annual Report. 2014. Web. Aug 8, 2014. Nair, Priya. The potential for growth in retail banking is huge. Apr 15, 2012. Web. Aug 8, 2014. Read More