Bank One Case

3. What are the consequences of Capital One’s IT strategy for expansion into different segments of the credit card industry, and into other industry’s?

Capital One was a monoline credit card organization in the mid 1990s. Capital One constructed a solid credit card business. This procedure paid off but if the credit card buisness were to decline it would mean disaster for them. Capital One expanded into retail banking in the late 1990s and mid 2000s. It was to decrease the hazard from a monoline business. Capital One was one of the pioneers in utilizing information examination to assemble a client profile for its credit card business. The bank additionally

The banking industry has undergone major upheaval in recent years, largely due to the lingering recessionary environment and increased regulatory environment. Many banks have failed in the face of such tough environmental conditions. These conditions

Delivering on the bank's new competitive positioning also required changes to the intangible aspects which are not visible to customer.

Evaluate RBC strategy and organizational structure. Is RBC well equipped to compete with niche operators such as internet-only banks with focused product offerings?

This research paper will describe Capital One’s general environment, technology and political and legal segments, forces of competition, Predicting and addressing forces, strengths, weakness, opportunities and threats (SWOT) as well as resource capabilities.

The company has recently made moves to build its retail banking business and its credit card business. In 2012, Capital One completed the purchase of ING Direct USA, a deal that added $80 billion in deposits to the company's balance sheet. It then added HSBC's US credit card business. This move added $28 billion worth of credit card assets to the company's portfolio. These acquisitions were substantial in nature - $9 billion for ING and $31.3 billion for HSBC (No author, 2012). They indicate that the primary focus for growth at Capital One is to build on its core businesses. Such expansion of its two largest businesses indicates that Capital One is more interested in focus there than in expanding

Multiplying Sun Coast’s book value of equity with 0.8 gives a value of $47,095,840 (Figure 5.1) for the company’s market value under this assumption. This results in a share price of about $5,233 with a total number of shares outstanding amounting to 9000.

     Its most competitive environment right now is its Retail and Credit card services. This unit of its business has proved to be volatile and problematic for the bank. The unit has recently won some important new alliances, including Amazon.com and Walt Disney Co. But analysts question whether growth will ever return to the levels that were considered normal in the 1990’s. According to Bear Stearns’, credit card loans is at the lowest level seen in 20 years, so there is intense competition in that industry, one reason is because home equity loans are so low that card borrowing makes less sense for consumers. While the bank has made a lot of progress fixing inherited problems, competitors who are less burdened have continued moving ahead. Many of these competitors are attacking Bank One in its core markets, including Chicago. Major players such as Bank of America and Washington Mutual are entering this market, while established competitors such as Fifth

In 2006, Net Bank recognized that there were some significant operating deficiencies and started to restructure the company in an effort to resume profitability. The company shut down or sold several businesses. Some of the shuttered companies included FTI, payroll and finance services, non-auto (RV, boat and aircraft) loans and the subprime/non-conforming mortgage companies. The independent auditor, Ernst and Young, resigned in 2006. Net Bank’s mortgage operations suffered greatly. Net Bank normally originated loans and resold the loans to other financial institutions on the open markets. Some of the loans that Net Bank sold did not meet the underwriting guidelines and Net Bank was forced to repurchase these loans from the other banks. Since

There are no capital reserve requirements specific to swaps. Swaps do not appear as assets on the balance sheet and thus they are not accounted for in the capital requirement calculations for the bank. This frees capital for the bank and at the same time brings insurance against its interest rate exposure.

The primary measure used by regulators and analysts to measure a bank’s capital strength is the Tier 1 capital ratio. Analyzing this ratio indicates the strength and the bank’s ability to

High interest rates after the 1973 oil crisis and the 1979 energy crisis, the US economy was affected by stagflation. In an effort to fight excessive inflation, the Fed adopted a tight monetary policy, raising interest rates (as an illustration, the federal funds rate increased from 11% in 1979 to 20% by June 1981).This affected all players as it led to a plunge of stock market prices, on the one hand, and an economic recession, on the other. Furthermore, Massey was particularly hit hard: since it mainly financed its operations with short-term debt, its financing cost went up

In 1996, Citibank was an emergent banking institution attempting to increase its market share in the competitive Los Angeles area. In order to do so, the bank’s strategy was to focus slightly less on their financial growth, and much more on providing “a high level of service to its customers”. Management viewed this paradigm shift as “critical to the long term success of the franchise”.

Enclosed is a copy of “Group Assignment” about the understanding of CDOs. This report is aim to critically examined how CDOs may help banks to avoid liquidity risk and create more assets, and also problems in term of the purpose of CDOs, the role of three mechanisms in CDOs and problems faced in CDOs. After that, it discusses how CDOs created problem for Lehman Brothers by analysis subprime mortgage crisis. Finally, this report provides some recommendations for making the CDOs as effective liquidity risk